Verve Raises $7M, Studies Mobile ‘Paradox’ for Old Media Customers
Verve Wireless has raised at least $7 million from investors in a new round of financing, according to a recent regulatory filing. Verve, which has headquarters both in Encinitas, CA, and Washington, D.C., also is addressing a fundamental challenge as it builds out its Web-based technology, which enables regional newspapers, broadcast stations, and other media companies to offer their local news and advertising to a variety of smartphones, tablets, and other mobile devices.
“We are in the middle of a raise,” confirms Greg Hallinan, Verve’s chief marketing officer. But Hallinan would not discuss details of Verve’s latest funding round, at least not at this time. Based on $3.5 million in funding disclosed last year and $12 million that Verve raised during the first five years, the company has gone to the well for at least $22.5 million in startup capital since it was founded in 2005.
Verve is still expanding, which is a topic that Hallinan was happy to discuss. He says Verve’s combined network of media customers is registering 91 million unique U.S. visitors per month. Verve also has expanded its headcount to 50 employees in three cities—Encinitas (where co-founder and president Tom Kenney is based), Washington, D.C., (where CEO Tom MacIsaac is based), and New York (where much of the U.S. advertising industry is based).
As robust as that sounds, Hallinan says the market for mobile media content remains particularly challenging, and Verve has been conducting a series of studies in an effort to understand the market—and to help educate its traditional media customers. “We are focused on the intersection of local and mobile as it relates to consumer habits, and helping national and local advertisers reach these consumers in direct and meaningful ways.”
The market is a paradox, according to data that Hallinan cites from a mobile analytics firm called Flurry: “People spend 23 percent of their time on mobile devices—second only to TV at 40 percent. And yet mobile is only getting about 1 percent of ad budget spend, compared to TV getting 43 percent. The only medium that exceeded mobile was print—but in the other direction: print gets 29 percent of ad spend, but accounts for only 6 percent of people’s leisure time.”
The paradox represents a significant challenge for Verve, and Hallinan says, “The question becomes how does traditional media monetize that content?”
As a result, Verve has been conducting quarterly studies to help its national advertising clients and media partners understand consumer interests and their mobile usage patterns. In particular, the studies are focused on how consumers use their mobile devices to make purchasing decisions.
For example, a recent study Verve conducted for car dealers (who are major advertisers in local media) found that 71 percent of the people using the Verve network are open to using their mobile devices to guide them through the research phase of buying a car. (The three top categories for auto-related mobile search are: model, 40 percent; vehicle features and photos, 38 percent; and dealership locations, 25 percent.)
In another case study, Verve says mobile advertising campaigns done for RadioShack over the 2011 holiday season targeted consumers who were nearing the end of their mobile phone contract cycle with location-centric offers to drive sales of new mobile phones and accessories at local RadioShack stores.
“Advertisers follow the audience,” Hallinan says. “And nearly half of the U.S. population is using some kind of smart phone.”