With $1.7M in New Funding, Sightly Takes Aim at Video Ad Marketing

After securing $1.7 million in new funding last month, a San Diego Internet startup is making its debut this week with technology that is intended to provide the same kind of automated personalization in online video advertising that certain software tools do with e-mail and online documents.

Sightly founder and CEO John McIntyre says the company works with ad agencies that represent consumer brands and small-to-medium businesses, helping them get videos of their products or services into targeted “micro markets,” using social media and other distribution channels. Sightly unveiled its Web-based video advertising platform at the International Franchise Association’s annual convention in New Orleans, which began Saturday and runs through Tuesday.

“Our technology enables us to identify and target different micro markets,” says John McIntyre, Sightly founder and CEO. He compares Sightly’s video technology platform to “mail merge” software that enables users to generate a series of form letters in which personalized information can be substituted and sent directly to each recipient.

In founding Sightly, McIntyre and co-founder John Zdanowski are seizing an opportunity they see for video advertising in mobile devices, based on a massive shift to mobile search. By one estimate, over 50 percent of mobile search queries are now seeking local information about local businesses, such as theaters, restaurants, and hotels. It is also a diverse market, with survey data showing that Google’s search app is used much less frequently by customers than a number of other apps, such as Yelp, Facebook, and Twitter.

Local businesses, however, have been slower to adopt to the mobile advertising market—and they are wary of claims from technology startups offering search and social media “solutions” for reaching customers. In this respect, the key challenge for Sightly is rising above the marketing noise from competitors and persuading businesses to sign up.

McIntyre says Sightly holds an edge as an official Google Partner and is currently Google’s only video platform partner. “We have a unique relationship with them where we are able to manage YouTube video ads for partners and customers,” he says. Integrating Sightly’s technology with Google and YouTube provides a competitive advantage that does not exist elsewhere, McIntyre says. Sightly’s technology also enables the company to automatically generate thousands of variations of each video ad, using analytics to tailor the message and creative aspects of the ad.

“Most importantly, in terms of delivering value to our customer, is our management of local ‘big data’—our ability to manage your project with programmed media buying,” McIntyre says.

McIntyre tells me Sightly’s technology enables corporate brands, ad agencies, value-added resellers, and others serving local businesses to create “hundreds if not thousands of different versions” of a video ad—and distribute them through a variety of different channels to reach prospective customers with optimized and locally relevant messages. (Because of non-disclosure agreements, McIntyre says he’s unable to disclose any of Sightly’s partners or end clients at this time.)

Sightly is actually the re-start of PixelFish, a Torrance, CA, company McIntyre and Zdanowski co-founded in 2006 to provide online video advertising primarily for small and medium-sized businesses and their advertising partners.

After deciding to focus more specifically on mobile devices and the market for local video advertising, McIntyre says they sold the corporate video production business and the PixelFish name to Lilly Swardstrom, their vice president of production, who was backed by a small investor group.

“Only the brand and some customers were sold to PixelFish,” McIntyre explained in an e-mail over the weekend. “All core technology, partnerships, etc. remained with the company which I renamed as Sightly.”

Before PixelFish, McIntyre gained experience in Internet marketing as the CEO of Vmatrix (based near Los Angeles) and co-founder and CEO of Chicago-based Affinity Internet. McIntyre says he decided to establish Sightly in San Diego after moving here with his wife Shauna, who had a senior role at Achates Power. Now Sightly is moving into a new office in suburban Rancho Bernardo.

PixelFish continues to operate as a video production company focused primarily on corporate marketing, although it also produces some video ads, McIntyre writes. “I have no ownership or involvement with the company, although we remain on friendly terms.”

Still, it’s been an expensive pivot. PixelFish had raised about $9 million in venture funding before McIntyre and Zdanowski restarted as Sightly.

Their new strategy for Sightly required another $5.6 million in what the new company described as initial seed funding, led by Moscow-based Bright Capital Digital, according to a December 2012 report in TechCrunch. Other investors in that round included Foresight Ventures as well as Floodgate, TomorrowVentures, Bullpen Capital, Mack Capital, and 500 Startups.

Near the end of January, Sightly said it had raised an additional $1.7 million in seed funding in a round led by New York-based Mack Capital, which was joined by Eric Schmidt’s TomorrowVentures, Dave McClure’s 500 Startups, and individual angel investors. In a statement from Sightly, TomorrowVentures principal Brad Holden says, “With the shift in media viewing habits from TV to digital media, the market is primed for Sightly’s solution. As the demand for personalized, scalable video ads and campaigns increases, it’s evident that Sightly’s growth opportunities are exponential.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

Trending on Xconomy