Paramark Lands $9 Million for Ad Optimization

In a development that will help the Sunnyvale, Calif.-based start-up develop and market its ad optimization technology, Paramark Inc. this week rounded up $9 million in new investment, most of it from marketing-oriented venture capital firm eVerger.

The dough will be used to help the fledgling company in its efforts to line up advertisers, agencies and publishers as clients for its Web-based service, and it will also go toward launching two products in development. Paramark’s initial automatic ad optimization product, known as AdPilot, is being used by NextCard, ExileonSeventh, FCB Worldwide, Mediasmith, Beyond Interactive, OmniSky, and Gatorade.

Paramark’s ASP technology allows users to automatically optimize their ad campaigns, working in concert with ad serving systems. Clients input information about the goals of the particular campaign, and the Paramark system is designed to switch out ads and placements to provoke a better response.

In announcing the funding, the company hinted that it was looking toward moving into overseas markets, and Andrew Burke, chief executive officer of UK-based eVerger, said a European headquarters would likely be the first beachhead.

Besides the possibility of eVerger helping Paramark establish itself in international markets, landing eVerger as an investor has additional strategic value. The VC firm has a significant partner in Aegis Group plc, the holding company for marketing-related companies like Carat, Media Marketing Assessment, Market Facts and Asia Intelligence.

Noting the reasoning behind the investment, Burke said eVerger would look for opportunities to leverage the investment through Carat, Aegis’ media buying company, in addition to rolling it out to other potential customers. “It’s exactly in our sweet spot,” said Burke.

The Paramark system is designed to allow media planners to take advantage of advanced targeting capabilities without being forced to dig through the data necessary to analyze results, bringing a technology solution to a process that has so far been performed by human analysts. In an age of cutbacks and hyper-accountability, such technologies are growing more attractive.

That’s likely why, at a time when venture capital money isn’t exactly flowing freely, Paramark has managed to round up funds.

“The Internet has unleashed a flood of valuable, but untapped, data metrics for marketers,” said Burke. “Their tools make the Internet work for marketers, and answer the essential question of online marketing, namely, how do you get the greatest ROI for your online dollar.”

The next tool out of the Paramark workshop is expected to be something that’s currently being called CoPilot. As AdPilot works to optimize advertising to get the best click-through, CoPilot would optimize based on beyond-the-click occurrences, like conversions. A company spokesperson said CoPilot would also optimize the pages on which a Web surfer would land after clicking on an ad, in a manner similar to that of direct-marketer HotSocket.

EVerger contributed $7 million to the funding round, with the balance coming from early stage venture capital firms and private investors, some of which participated in the company’s first angel round.

The company’s investors include: Staenberg Venture Partners; Dhunn-Carr Venture Capital; the Oki Group; Rajat Kumar Gupta, managing director of McKinsey & Company Worldwide; Rick Magnuson, a private venture capital investor formerly with Menlo Ventures; Kanwal Rekhi, co-founder and president of TiE (The Indus Entrpreneurs), former chief technology officer of Novell and founder of Excellan; and S. Somasegar, vice president of the Windows Engineering Services Group in the Windows Division at Microsoft.

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