JumpTap Raises $26 Million in Series D Funding, Speaks Out On Verizon-Google Plans & Shares Exclusive Stats/Insights On Mobile Search Usage & Behavior » mobilegroove

More news and analysis around today’s funding announcement from white-label mobile search and advertising company JumpTap. The company has closed a new round of funding in excess of $26 million, a shot in the arm that Dan Olschwang, JumpTap CEO, tells me allows JumpTap to fine-tune how it applies search technology and algorithms to improve mobile search and advertising targeting. (Thanks again to Julie Ginches for arranging the pre-briefing yesterday with Dan and Paran Johar, JumpTap CMO.)

At a different level, the investment is a confirmation of the increasing importance of mobile search in the scheme of things (interface to all things digital on mobile) and the central role of white-label providers in the competitive landscape. As Paran pointed out in this post, and again during our discussion: One of JumpTap’s key differentiators is its close relationship with carriers. “Whether it is demographic or location, whatever data sets they [carriers] want to pass to us enriches our targeting capabilities.”

Moving forward, Paran tells me JumpTap is putting more emphasis on the “flip-side” of this value proposition, allowing publishers and developers to monetize their inventory to a higher CPM. Expect more reach out, more education and more efforts to get the publishers in front of JumpTap’s advertisers. Smart move if we consider the interest of minority shareholder and major advertising/marketing company WPP. Leveraging JumpTap’s advertisers is a natural next step and the recent Pinch deal (covered here) is just the start.

How is this going to come together to help publishers monetize their inventory to a higher level? Dan walked me through an example of contextual targeting on ESPN. A sports content channel, so sports-related advertising is a perfect fit, right? Wrong.

“We’ve based our solution on search technology. We don’t rely only on the tags on the publisher side. When we place an ad on ESPN, we know it’s ESPN, but we also know it’s in the NHL section. We know this is the Bruin’s page, and we know which specific player the users [viewing the content] is interested in. We know if he’s interested in the scores or in last season’s stories. Now, how we do it? We can do this because our search technology includes crawlers and spiders, and we actually read the page that this individual is looking at and distill keywords out of that, as opposed to other ad networks that just rely on the fact that this is a sports site.”

Below are some excerpts of my conversation with Dan and Paran. You might also want to check out this post at MoCoNews, where Tricia Duryee reports on her catch-up call with Paran.

INVENTORY: JumpTap’s mobile ad network is focused on premium content. By not swamping the networks with general inventory, JumpTap aims to maintain quality and high CPMs. “Our strategic direction is to focus on premium providers of content, and to target users against that content to build relevancy….The second component of what we do is to address the Long Tail, and we will be developing a series of tools to work with the smaller publishers so they can take advantage of our targeting abilities.”

TARGETING: Dan tells me the funding announcement will allow JumpTap to “continue to innovate and build more sophisticated targeting than [what] we do today and what we do today is way ahead of the rest of the market.” At the same time, JumpTap will aim to introduce “not only the sophisticated targeting, but actually offer a more simplistic targeting because that’s what the market is ready for.” JumpTap will therefore seek a balance between precision and reach. “You need to tone down your ability to target for the sake of scale. Otherwise, you’re doing a great job of slicing your traffic and end up with a group of ten people.”

MOBILE OPERATOR OPTIONS: In Dan’s view, operators can choose one of three paths. They can cut a deal with a branded search provider (Google, Yahoo, Microsoft). “It doesn’t mean they [carriers] will necessarily end up a dumb pipe, but it does mean they need to become much more proactive on other fronts to create the shareholder value upside they need [in the long term].” Put another way, giving in to Google & Co. is a short-term strategy with short-term rewards. “Carriers are realizing that, no matter how big the check can be, it’s [a deal with a branded search provider] actually a Trojan horse.” (A great time to listen in to the sponsored podcast featured in the box on the right-hand side of the site. Vendor spin aside (it is sponsored), it does a great job of outlining JumpTap’s Trojan horse argument and what is likely at stake if operators choose that option.)

The second path is somewhere in the middle, where operators use branded search but “use JumpTap as a buffer in between” to manage, develop and leverage their customer data, rather than share it with Google, Yahoo, Microsoft. The third path, one less followed, is about operators “re-inventing [their] business to become much more of a media company, utilizing us not only to manage their customer data and the targeting parameters, but [implementing] our white-label search technology, made for mobile, to monetize it.”

VERIZON-GOOGLE: No word on the likely impact or outcome. (JumpTap’s operator customer Alltel has been acquired by Verizon, and there’s a question mark over JumpTap’s role if Verizon ties up with Google for mobile search.) Dan and Paran honed in on the role of customer data in the deal (negotiations over how much information Google can retain about Verizon’s customers and their searches appear to be a thorny issue in the Verizon-Google talks), using it as a springboard to discuss analytics. As Paran observed: “Operators are beginning to understand that their customer data is one of their most precious commodities.” Indeed, carriers are just starting to level their data to enrich the search experience. “And when that happens on a wide scale, you’re going to see the game change drastically.”

My take: A funding deal that underlines the pivotal role of white-label (an attractive option for search and search monetization through advertising). More importantly, it confirms JumpTap’s ambitions to lead the pack by leveraging its search technology and advertisers to monetize inventory at a higher level. Mobile search may not be broken after all; it has simply stalled while operators get their head around their options and how best to leverage the real power of the customer data they wield. JumpTap provides a valuable blueprint to follow.

(The next post, co-written with Peggy Albright, will share some insights from a series of briefings with JumpTap on key mobile search trends .)

Disclaimer: JumpTap is an MSG supporter.

Tags: JumpTap, Mobile Search, targeting

This entry was posted on Tuesday, August 26th, 2008 at 1:05 pm and is filed under Mobile Marketing, Mobile Research, Mobile Search. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.