DigitalArbor, Backed by Flybridge, Offshores Digital Marketing

11/17/08Follow @wroush

When you’re listing countries rich in Web development and software engineering talent, you might think of places like Estonia, Russia, Poland, and Romania. Now you can add Costa Rica to the list. That’s the location of the “offshoring” facility where a new Massachusetts-based digital advertising, marketing, and communications firm called digitalArbor will turn for low-cost labor.

DigitalArbor launched today with news of a $5 million Series A venture round from Boston’s Flybridge Capital Partners. Led by Robert Willms, a former executive at the international Web marketing firm Digitas, Cohasset, MA-based digitalArbor will specialize in “digital production management”—building and maintaining company websites and other Internet- and mobile-based corporate communications. It promises to keep costs low for clients by drawing on “global labor pools within the time zone,” according to its website.

Costa Rica is on the same time as the U.S. Central time zone. DigitalArbor’s offices there are located in La Aurora de Heredia, an industrial park zone outside the capital city of San Jose.

The growing variety of channels available for reaching consumers—such as Internet video, mobile advertising, video games, interactive ads, and traditional website display advertising—means that companies have to tap more tools and technologies, which means higher costs. In a statement, Willms said the key to decreasing those costs is combining “onshore producers and offshore technical talent.”

“The company is coming to the market at a critical point in the evolution of digital marketing services with a business model that is even more compelling in our current economic times,” said Flybridge general partner Jeff Bussgang in the company’s announcement, which noted that Bussgang will join digitalArbor’s board. “With digital advertising outperforming many other forms of media, there is a huge unmet need for technical resources to fulfill production needs,” he said.

A digital marketing firm might seem an unlikely bet for venture investors, who typically seek investment returns of 10x within a three- to seven-year period. However, venture firms have had good luck with Boston-area digital communications companies before; Softbank and other investors profited nicely when Cambridge, MA-based Art Technology Group (NASDAQ: ARTG) went public in 1999, and last year AOL bought Boston’s Third Screen Media, a mobile advertising firm backed by TD Venture Capital (now Fairhaven Capital) and Blue Chip Venture Co.

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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