New Venture Funding for Revenue Science

After many people had left for the holiday break, Adweek and the local Seattle press ran stories reporting that Revenue Science had attracted some $24 million in a round of venture capital financing.

Perhaps this news hasn’t drawn much attention because of the timing. Perhaps it was overshadowed by the announcement of Google’s billion-dollar investment in AOL. But this is a significant event and deserves more attention than it’s been given.

The investment shouldn’t only be viewed as some venture capitalists (VCs) backing Revenue Science. It should also be viewed as VCs looking to invest in the huge opportunity that behavioral marketing offers.

What’s This All About?

Behavioral targeting is really only starting to be adopted by publishers and advertisers. As such, it’s a nascent area within the overall online ad market. I think of it as a faster-growing part of a fast-growing whole.

Fellow columnist and former JupiterResearch analyst Gary Stein says about 12 percent of advertisers have used some form of behavioral targeting in their campaigns but 40-50 percent of them think it can provide best returns. This perception is underpinned by case studies and examples that show how matching ads to interests indicated by browsing patterns increases relevance for consumers and response rates for marketers.

Behavioral targeting services powered by Revenue Science and TACODA through such publishers as The Wall Street Journal Online and New York Times Digital aren’t spyware and are used regularly by many mainstream online advertisers. Because ads are targeted based on interest categories or segments and no personally identifiable information is collected, consumer advocates and the online marketing industry have given it their OK.

Behavioral targeting is great for publishers because it allows them to maximize yield on unsold inventory on their own sites or to tap into network scale when they’re sold out.

An Investment in Behavioral Targeting

Revenue Science will likely use the new funding to improve its core technology and continue building out its behavioral targeting network. In addition, it may also invest in international expansion. Whatever the case, the dollars will have an effect on not only Revenue Science but also its publisher partners, their advertising clients, and behavioral targeting in general.

This is an investment in not only a company but also an important growth area of the online advertising marketplace.

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