Trying to cut a slice of Google's search-ad billions

New York-based Clickable raises $14.5 million from the Founder's Fund, and Marchex retools its local-search advertising platform.

Stefanie Olsen Staff writer, CNET News
Stefanie Olsen covers technology and science.
Stefanie Olsen
2 min read

Google wouldn't be Google without its ownership of the estimated $10.4 billion annual search advertising market. But other ad-technology hopefuls are still angling for ways to take a few million or billion dollars off the top for themselves--just like Microsoft and Yahoo.

One such start-up, New York-based Clickable, is trying to build a lucrative business by selling advertisers a simple software tool to manage and improve their search-marketing campaigns with Google, Yahoo, and Microsoft. Because it can be tricky and time-consuming for advertisers to keep track of multiple search campaigns, Clickable lures them with a self-described iTunes-like application that shows which ads are working and which aren't.

Since the company's limited launch in February 2006 and bigger push this spring, it has attracted about 400 customers, which spend an average of $10,000 to $50,000 a month on search ad campaigns. (On the high end, Clickable makes a 5 percent cut of that spending and 3 percent with ad agencies.)

But it plans to step up growth this fall, thanks to a new round of financing. On Wednesday, Clickable will announce that it has raised $14.5 million in a Series B round of financing from the Founder's Fund, as well as its previous investors Union Square Ventures and FirstMark Capital. With this financing, the company has raised a total of $22.5 million in the last year, including money from private investors former AOL CEO Jonathan Miller and Peter Thiel, co-founder of PayPal and managing partner of the Founders Fund.

Clickable CEO David S. Kidder said that part of the growth plan in the next year will be to create a single "Clickable" interface for other types of Web advertising, including social media and display ads. Because the Founder's Fund is an investor, Kidder said that Clickable will be looking to create tools for many of the venture firm's other portfolio companies, such as Facebook or Twitter.

Advertisers on social networks, he said, could eventually benefit from a single tool that could trace how ads are performing with other types of media. "Once social media can get connected to search, even to Google, advertisers can create a display ad campaign in Facebook and MySpace and connect that to a search campaign that converts (into a sale or action)," Kidder said.

In other news, publicly traded Internet advertising company Marchex will announce Wednesday that it launched a new platform called Marchex Connect 2.0. The technology, which updates its previous ad platform, lets local advertisers buy online search ads, 1-800 voice call search ads, and a business profile Web page from one place. The company hopes that it will help the estimated remaining 14 million small to medium-size businesses in the United States establish a presence on the Internet.

Maybe that will be key to capturing some of the expected $16 billion in search ad revenues by 2011.