Pando

Math marketing: Why Boston has a burgeoning ad-tech cluster

By Hamish McKenzie , written on September 23, 2013

From The News Desk

In several conversations I had with stakeholders in Boston’s startup ecosystem last week, people brought up just how bad the city is at marketing itself. The city’s startup community has plenty to talk about, people said, pointing to its strengths in digital infrastructure, security, Big Data, and travel, among others, but it’s not very adept at selling its story. Atlas Ventures’ Fred Destin put it bluntly: “Boston just sucks at PR.”

It’s ironic, then, that Boston is home to a slew of startups and tech companies that are helping others market themselves.

While it might be short on creative talent compared to nearby New York City, Boston enjoys a fortuitous mix of factors that lends itself well to a new generation of marketing services and tools. For a start, it has a long history of business-to-business expertise, thanks to its strength in enterprise tech, which dates back decades and serves as the foundation for its startup ecosystem. So Bostonian tech companies know how to sell.

But more important is that Boston has exceptional strength in machine learning, automation, Big Data, and complex math, thanks to the talent coming out of top engineer and computer science schools such as MIT, Harvard, and Olin College.

As it happens, when you mix those math skills with those sales skills, you get some pretty compelling ad companies. So in the last few years, Boston’s tech community has developed a formidable “modern marketing” cluster.

All the evidence you need to support the claim that Boston is fashioning itself as a modern marketing town can be found in a list of its recent ad-tech successes and promising prospects. So, here you go, in no particular order...

Demandware (ecommerce marketing). Raised $88 million in an initial public offering in March last year. Share price has since increased from $16 to $47.

Hubspot (inbound marketing). Last November raised a $35 million “mezzanine” round in preparation for an IPO.

Visible Measures (video advertising analytics). Has raised more than $65 million and last month the CEO claimed the company is “close to Hubspot” in revenue, which would put it somewhere in the region of $50 million a year.

Brand Networks (social marketing). After seven years of bootstrapping, in June Brand Networks finally took its first round of funding: a $68 million cash injection from private equity firm AEA Investors. CEO Jamie Tedford says the money will be used for global expansion and acquisitions.

Nanigans (return-on-investment-based ad platform). Earlier this year raised a $5.8 million Series A round and scooped up Facebook exec Antonio Garcia-Martinez.

Quattro Wireless (mobile advertising). Acquired by Apple in 2010 for a reported $275 million. Its technology become iAds.

Adelphic (mobile ad targeting). Founded by a Quattro alum, in December the startup announced it had raised $10 million in a Series A round from Google Ventures and Matrix Partners.

SessionM (mobile ad platform). Another Quattro spinoff, the startup last year raised $20 million in a Series B round led by Charles River Ventures.

BzzAgent (word-of-mouth marketing). A social marketing pioneer in Boston, in 2011 BzzAgent was acquired by Dunhumby, a retail giant owned by UK supermarket chain Tesco, for $60 million.

Bluefin Labs (social TV analytics). Acquired by Twitter for close to $100 million.

Localytics (app analytics). The Techstars grad last year raised $5.5 million Series B in a round led by Polaris Venture Partners.

Acquia (content management). Not strictly for marketing, but the software enables it. Last year, the company closed a $30 million funding round as it ramps up to an IPO.

DataXu (real-time media buying). Named fastest-growing advertising and marketing company, and the fastest-growing company overall, in the Inc 500. DataXu has raised a total of $45.8 million to date, including a $27 million Series C round in February.

Constant Contact (email marketing). A mainstay of Boston’s ad:tech landscape, it went public in 2007.

Promoboxxx (retail marketing for independent retailers). A young startup that has raised $2.5 million and has recently signed up customers ranging from Citizen to Chevrolet.

EverTrue (marketing to university alumni). A Techstars grad that in March raised $5.25 million from Bain Capital.

Crimson Hexagon (social media analytics). Picked up $5 million in a Series B round back in 2011.

Communispace (community engagement). Acquired by Omnicom’s Diversified Agency Services for an undisclosed sum in 2011.

Nexage (mobile ad exchange). Since its founding in 2005, mobile programmatic advertising company Nexage has raised $24 million. Earlier this month, Twitter bought competitor MoPub for $350 million.

Image by Hallie Bateman.