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4 startups you can't ignore

Sean P. Egen
4 startups you can't ignore Sean P. Egen
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Web analytics, the science -- or, perhaps more accurately, the art -- of studying online behavior is big business. Googling the term yields more than 75 million results, and the search engine giant itself offers its own ubiquitous analytics product, indicating just how lucrative the field has become.


But with so many new players in this growing field, how does one separate the wheat from the chaff? That's where Dealmaker Media, a San Francisco-based firm specializing in "inter-connecting CEOs, technology execs, investors, analysts and press," comes into play. Best known for its thrice-a-year Under the Radar Conference that showcases promising startups, Dealmaker prides itself on being adept at sifting through the noise to connect the best startups with the right investors to make deals happen. And in the competitive field of web analytics, specifically social analytics, Dealmaker has identified four startups the industry should keep tabs on. 


Here's why they caught Dealmaker's eye, and why you may want to keep a watchful eye yourself.

If you're a gamer, you know just how viral online Flash can get. Because Flash files are as easy to copy as JPEGs or gifs, a popular game originating on one website can quickly end up on thousands -- and even more -- computers. But until Jameson Hsu and his Mochi Media team came along, there was really no way to track this movement.    


"The biggest problem we've been able to solve is to tell content developers -- primarily game developers -- where their game is being stolen from and posted to, who's playing it, where they're playing it, and whether they're playing it on their own computer or other websites," according to Hsu, Mochi's CEO and co-founder.


Mochi's free analytics tool, MochiBot, measures how viral a game gets but doesn't currently mine demographic data about the people playing the game. "But that's definitely an area of interest to us," Hsu said. "And definitely something that's often requested."


Still, tracking movement alone is extremely helpful to game developers. Through movement, they not only see which games are popular but also how the game is being played, which helps determine game trends and improve game quality -- quality Hsu has seen improve tremendously since Mochi started doing its thing.    


"People use it to track how far in a game they got," Hsu explained. "Did they get to level one or level 10? If they didn't get very far, then the game was probably too hard; if they made it all the way to the end, then it was probably too easy."


Named after the Japanese rice dessert Hsu was eating every day when the company formed, Mochi Media also offers MochiAds, "the world's largest online games advertising network for game developers, advertisers and publishers." This product, which is also free, uses similar technology as MochiBot, but the platform is able to serve ads into games. This is how the company generates revenue.


"We make money from advertisers in that they pay us to run their promotions in the games that are in our network -- the games from the developers we work with -- and they [developers] are providing us the space by utilizing our technology," Hsu said. "So whenever they use our MochiAds technology in their games, they're basically providing us with some billboard space to post an ad."


Mochi Media also works with developers to help them distribute their games because, in Hsu's words: "It's in the best interest of everyone. The more people who play the games, the better."


So, does Mochi ultimately plan on cutting out the middleman and developing its own games?


"That's one thing we'll never do," Hsu, who came from the game development side, said. "It's a very, very tough business -- a hits-based business. And you can't reliably make a hit every time. We try to mitigate that risk by spreading across thousands of games."


Sean Egen is a freelance writer.

The company is so named because it targets the influential one-third (33 percent) across the web. 33Across is focusing not simply on where people are and what they're doing on the web, but also where they sit in their "social graph." This social-relationship data, according to CEO/co-founder Eric Wheeler, is critical in understanding the spread of viral.


"What we're doing -- that no one else is doing -- is really understanding advertising along a social dimension, not just the contextual and demographic targeting, which everybody's really been focused on to date," Wheeler said. "We're bringing together where someone sits in their social graph -- measures of influence and virality and that connection data -- to really round out a full picture of a person."


This fuller picture helps advertisers better target more relevant ads and provides monetization opportunities for social media companies. 


"The social web is fueled by the connections between people and the engagement around shared areas of interest," Wheeler explained. "The problem is that most of the targeting systems today are really page based; they're not taking into account the inherent data that exists in the social web, and they ignore where a person sits in their network, what their active engagement level is, and what sorts of things they like and surround themselves with."


So, how does one quantify engagement level? Say the analytics indicate that 10 percent of the members of a weight-loss social network left five or more comments on a blog. These members would be considered engaged and, most likely, influential individuals. Targeting relevant ads at these people provides advertisers with more focus and, theoretically, more bang for their buck.


"We're enabling a media buyer to effectively buy word of mouth or buy influence with media," Wheeler said. "Never before have they had these tools."


Like KISSMetrics, a large part of 33Across' mission is educating its clients. While publishers are currently its main client, Wheeler has plans to ultimately expand the operation. "As we grow, we will absolutely become our own ad network and sell directly to clients," he said.

The K-I-S-S in KISSMetrics stands for "Keep It Simple, Stupid," something CEO and founder Hiten Shah firmly believes in. Shah and his team, the brains behind CrazyEgg, are going for the same type of simplicity in their analytics tool: user-interface simplicity, not in what it does.


"Analytics, in general, is focused on marketing and how to get the most out of your marketing dollar," Shah said about the state of the industry. "There's a lot they don't do when it comes to actually revealing what the users are doing on your website or your application."


Shah isn't overly impressed with the service most social analytics companies provide, either. "There's extra meta data associated with people that's really easy to grab, such as age, sex, vocation, more advertiser-focused information," he said. "A lot of these social analytics companies are just focused on that sort of information, to use it as a way of brokering data for advertisers."


KISSMetrics' analytics tool mines more than just age, sex and location data. Designed to be broad enough to work with nearly any application on the web, it specializes in social applications.


"Our system and tool provide the ability to get really deep insights into your user base, based on what your application is doing," Shah explained. "We focus on creating a highly customizable system so that, no matter what type of web application, you're able to get a lot of deep insights that normally you'd only be able to get by doing analysis from your database."


How the company does it is proprietary, but KISSMetrics is relying on the experience of its team and a proven track record with CrazyEgg to succeed.


"We wanted to take all of our knowledge in terms of analytics, scaling it, building really simple things that are valuable, and apply that to a broader kind of spectrum," Shah said. "And the social space is very interesting. I think a lot of companies are going to have a lot of challenges when it comes to tracking analytics related to that. But we felt like tackling the problem -- taking the team we've built and doing that."


Part of its recipe for success is educating publisher clients. "That's where our strong focus is," Shah said, "helping them understand what they should be doing, more than how to make it happen." This education is particularly germane, given that KISSMetrics charges for this service. But Shah believes that once publishers understand how useful it is, they'll pay for it.


"Based on our experience with CrazyEgg, if you create the right product, people are going to be attracted to it. It'll be like a magnet," he said.

Recognizing that many analytics tools focus on being a one-size-fits-all solution for virtually every application across the web, Sometrics decided to concentrate on the social-networking niche -- and dig deeper.


"We added a new layer that Google Analytics was not offering, and that was demographic details," CEO/Co-Founder Ian Swanson said. "We were able to test traffic performance across user demographics, user interests, psychographics, as well as define who the influencers are in the crowd, are these influencers inviting people to use the site and the application, and what the conversion rate was from those invites."


Today, Sometrics has close to 1,500 publishers using its tool. Along with Social Analytics, it also offers Social Ad Manager, its ad-serving tool. 


"Our [ad manager] product works off the back of our analytics engine and allows people to manage their third-party ad relationships and optimize performance across user demographics," Swanson explained. He believes this one-two punch is key in differentiating Sometrics from the competition. "Where some other companies use data to power other ad networks or to feed other people, our analytics data works 100 percent with another product, our own ad manager. So there's a lot of value there. They don't have to go out and buy another product."
 
Both products are free, but Sometrics doesn't operate under the typical "freemium" model. "At this time, we're saying we have a 'freemium' model, so we may eventually charge for some premium services," Swanson said. "But any services, any features, that are coming down the pipeline right now, we don't plan on charging for."


So how does Sometrics make money? Two words: revenue sharing.


"Advertisers, such as AT&T, want to be able to reach across multiple sites," Swanson said. "We supply that reach. We then close a deal with AT&T, and, through our ad manager product, we ask our publishers if they want to accept or reject a banner ad from AT&T at, say, a dollar per CPM."


Sometrics plans to roll out additional utility products that serve the social networking world. Its newest product, tentatively slated for an October release, will focus on social gaming and will also work off of Social Analytics.

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