Percolate Is Solving the One Problem its Social SaaS Competitors Won't Touch

By Erin Griffith , written on July 19, 2012

From The News Desk

We know social SaaS companies -- the ones that help brands navigate Facebook and Twitter -- are a hot commodity. Between Buddy Media, Vitrue, Involver, and Efficient Frontier, enterprise companies just keep snapping them up. From what I hear, Oracle and Salesforce aren't the only hungry (and possibly desperate) acquirers in this category -- everyone from ad networks inside big tech conglomerates to the big four agency holding companies are sniffing around.

Those SaaS companies -- Buddy Media, Wildfire, Vitrue, Involver, Syncapse, Thismoment, etc -- all have differentiators in how they help advertisers execute social media marketing, but there is one common thread. They all make it very, very clear that they are not competing with the ad agencies. They are platforms -- they're not doing creative work. Brands and agencies can both use their services, they stress. "We're just selling enterprise tools!"

But here's the thing: Increasingly, brands are bringing social marketing in-house. The era of the social media Agency of Record is ending. So brands don't really care if their social media management tools cut out the agency. They just want to be told what to say. It's become a bit of a conundrum for brands that have spent the last few years amassing an audience in the form of followers and "Likes." Now what do they say?

That's been the premise of Percolate, a New York startup created by two ex-agency guys. Noah Brier and James Gross, one a former employee of creative agency The Barbarian Group and the other of ad network Federated Media, started the company a year ago to add that piece to the social media puzzle. Brands are now expected to be savvy content creators. No one is going to argue that premise. But they're still learning how, exactly, to do that.

Witness the hand-holding from Facebook after it introduced Reach Generator for its Sponsored Stories ad format. That's essentially a way for brands to amplify their status updates in their followers' news feeds -- and Facebook is terrified they'll abuse it.

Here's what I wrote when they rolled the tools out:

Presentation after presentation emphasized the importance of brands sharing "quality" content, comparable to the types of photos and status updates regular users share with friends and family. Think of brands as people, VP of global marketing solutions Carolyn Everson urged. The fear of filling Facebook with pushy sales pitches was palpable as volunteers handed out posters reading "think / ̶m̶a̶r̶k̶e̶t̶ / share." They may as well have said "please / don't / spam."
The Buddy Medias and Wildfires can help their clients figure out what works and what doesn't. They have analytics that tell you which kinds of status updates, posted at which times, will earn you the most Likes, shares, comments, follows, and clicks. "Lots of tool help brands push content around the Web," said co-founder Noah Brier. But they can't tell you what to share.

If brands plan to invest big chunks of money into Reach Generator and Sponsored Stories -- tools that amplify their social media content -- that content better be pretty damn good.

That's what Percolate, unafraid to compete with the agencies, is helping with. The year-old, 18-person startup isn't necessarily going to steal away business from its social SaaS predecessors, but it's offering something interesting enough that brands are taking note. Twenty-five Fortune 500 clients, including Nokia, American Express, Mastercard, GE, Diageo, and AB-Inbev have subscribed to use Percolate's social media dashboard. Percolate also powers Felix Salmon's Counterparties on The company is close to profitability, according to Brier.

The idea is that each day Percolate's dashboard offers prompts. Rather than signing in to see a blank box, be it on Twitter, Facebook, Tumblr, or Wordpress, the Percolate dashboard has ideas for posts. Brands have to produce both "stock" content -- the big, perfect, commercial content -- and "flow" content -- the lightweight, day-to-day stuff that everyone shares and Tweets. (You could argue that PandoDaily's PandoTicker is an example of curated "flow" content, while our meatier stories in the center of the page are the "stock" content.)

So basically, Percolate curates and suggests "flow" content for brands, with a few bells and whistles. For example, when sharing links to other content, the dashboard finds creative commons images to publish alongside them. Beyond that, the dashboard provides a searchable database of all brand content ever published to help systematize a brand's social media strategy.

And the rest is pretty similar to the offerings of the social SaaS companies. You can schedule posts, decide which platforms to post on, and get analytics back on the performance of your content.

"We're trying to build enterprise software that feels like it was built for the CMO, not the CIO," Brier says. To that, I say, get in line. Ever since that Gartner study predicting that, by 2017, chief marketing officers will spend more than chief information officers, enterprise companies and ad networks alike have been scrambling to bolt on CMO-targeted products. Buddy Media and Vitrue can thank Gartner for their healthy sale valuations.

But Percolate has the agency mentality and an understanding of content. In a brand new industry that's already experiencing a roll-up, that differentiator could make all the difference.

Percolate has raised $1.5 million in VC backing from Lerer Ventures, First Round Capital, SV Angel, Transmedia Capital, Rick Webb, Advancit Capital, Dave Morin, Josh Spear and Neu Venture Capital.

[Image via Adweek]