GraphScience Raises $2 Million Series A for Social Ad Optimization, Data Services

By Erin Griffith , written on March 28, 2012

From The News Desk

Advertisers treat social media as a branding category like TV, not a direct marketing category like email. And for brand spending, there's no such thing as ROI.

Not many object to that because brand dollars are considered to be the Holy Grail of digital advertising.

GraphScience, a Palo Alto data startup, objects. The company is making a big bet on direct marketing on Facebook, and today it has a $2 million Series A round from EchoVC Partners and Raptor Ventures to back it up.

Founded in 2010 by Raymond Rouf, the company previously received an $180,000 seed round led by Zig Capital and Ted Serbinski with participation from Eghosa Omoigui.

GraphScience's platform is approaching social in the way that Google approached search: It's a new category that needs to justify and attribute the dollars spent on it. The SEO market quickly became very important as the category of search ballooned to $15 billion a year industry. Part of the runaway success in search came from its ability to easily drive measurable results. If someone clicks on a paid search result and ends up buying something, the seller of that last click gets paid. (I'm oversimplifying but you get the point.) The ROI is very clear.

So search delivers measurable results; GraphScience wants to do that for social, now a $3 billion industry. The goal is to make social ad spend less of a branding sinkhole and more of a profitable revenue stream, Holy Grail be damned.

Not that social isn't great for branding. It's just difficult for many large companies to justify the spend with no direct result, Rouf said. Many of GraphScience's 50 retail and consumer products customers went big into social a few years ago, buying up likes and fans and followers at insanely high acquisition rates.

Many of those same companies pulled back their budgets last year because they weren't sure what they got out of their social spending. End of day, engagement doesn't translate to profit.

"All these guys were essentially ready to quit on Facebook," he said. "If you're just focusing on likes, you're not going to get customers that stick around." GraphScience's tools have convinced many of his customers to increase their social budgets again.

It's easy to loosen a CFO's purse strings with measurable results. Graphscience's approach to do that is, unsurprisingly, through data.

Despite my headline, Rouf insists GraphScience, with its Facebook dashboard for brands, is not just about Facebook ad optimization. Its goal is to help customers understand the customer's social data and social interest graph and what it should do with it. More importantly, GraphScience is designed for Facebook; it's not an SEO or ad optimization tool imported into a social network.

The company has 14 employees; it'll use the funding to double its head count this year.