4Info, the Palo Alto mobile search company we feared might become roadkill by Google and Yahoo, has surprised with solid progress in serving ads in text messages.
It’s on track to serve 50 million ad units for the next quarter, at a whopping $50 dollars per thousand messages (equivalent to $50 CPM in advertising parlance). This is remarkable since the service was only launched last month. Indeed, 4Info has sold out its entire inventory of messages. Do the math: This gives 4Info $2.5 million in revenue next quarter.
That’s good enough for its backers to provide more money for expansion. Gannett, the nation’s largest newspaper chain, led the $10 million fourth round of financing. Sand Hill Capital also participated, as did existing backers USVP and Draper Fisher Jurvetson.
We’re hearing the company was valued at just under $100 million after the round, giving it a higher valuation than its third round last year. It has now raised nearly $28 million. We’re also hearing 4Info may raise more money from a large strategic investor within the next month or two. Chief executive Zaw Thet declined comment.
4Info is different from Google and Yahoo because it relies on texting. It lets you text its code 44636, to inquire about things like sports, news, stock prices and weather, and lets you set up alerts for such information.
Last month, we reported 4Info’s move to create what it claimed is the first SMS ad marketplace. Ads in SMS, we asked? The format doesn’t exactly offer much artistic freedom for advertisers.
From Thet’s comments, advertisers are not only putting up with the plain ad format, they can’t get enough of it. Its partners include USA Today (Gannett), TV Guide, Tribune Company. It has 700 publishers using the platform to send out SMS messages.
Companies like Chevrolet, Citibank, 1800-flowers! exploit information 4Info collects on users — such as their location and interests — for better targeting. 4Info also gathers user information from publishers, such as age and gender. The publishers get this information from users through registration forms, and these are pegged to the phone number identities that 4Info tracks.
Because of 4Info’s bulk SMS usage, it doesn’t have to pay carriers for the service, meaning it is free for big companies like Evite to send out SMS alerts to users, containing ads. 4Info splits the revenue 50-50 with the publisher.
Thet says 4Info’s ads have a 15 to 20 percent reply rate, which is very high.
4Info will announce next week that it has signed a deal with a big payments vendor — PayPal, Obopay or Google Checkout.
4Info will also introduce video ads into text messages.
People can also use 4Info by visiting http://mobile.4info.net on their phone’s browser.
Tags: co:4info, deal, inv:Draper-Fisher-Jurvetson, inv:US-Venture-Partners6 Comments
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jonathan said:
Hold the phone…”4Info uses bulk SMS to deliver the text alerts (which now contain advertising), so it doesn’t have to pay operators for the service.” As standard rate, they don’t split revenue with carriers, but what about paying the connection aggregator for per message charges? Why do you think a $50 CPM is justified, because of the value of mobile advertising?
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Matt Marshall said:
I do think $50 is high, but if advertisers are paying it, they must be seeing the value. I tried to explain the targeting capabilities above. When you think about it, an SMS ad will take over the entire phone (thus assuring attention to the advertiser), and it can do so at specific times. Denny’s can run an ad about breakfast specials in the morning, and only in the morning, to people who are the go….
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Ajay said:
Real question is if you are paying connection aggregator around 3 to 5 cents per message then where your cost is also 5 cents per message (text alert or not…unless you are using email id, which would be blocked) so there is no profit. Key is finding out what they are paying to these connection aggregators. If they manage to get the deal around 2 cents per message (i think this cost differs per carrier) then it does makes a huge profit.
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Monika said:
4Info is doing a great job in leading the way of SMS. Zaw Thet and his team are working hard and it shows. I am so proud of the 4Info team with all they have accomplished. With every great team there is a great leader; Mr. Thet does an amazing job in leading this company to and beyond any expectations and I’m not the only one who has taken notice. Gannett, Tribune Company and Sand Hill Capital are among the companies that have thrived on all the hard work and late hours that the team of 4Info. Keep up the great work!
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Robert May said:
Ajay’s math is right, though SMS aggregators will become disaggregated and these prices will drop. However, $50/CPM for a text ad is likely to be from an advertiser’s test budget. Once they move to their media buy budget (and avails of SMS ads balloon), expect these CPMs to drop.
“deliver video via SMS???” Does this mean WAP push (which uses SMS transport for notification), EMS, or??
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Phil said:
4Info has a lot of good free content alerts, but they also offer a lot of premium message content ($3.99 per month). A lot of this paid content can be found elsewhere for free.
Phil
3 Trackbacks
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Always On Real-Time Access » 4Info $50 CPM said:
[...] Via VentureBeat [...]
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Web 2.0: la totale convergenza tra l’Internet fissa e quella mobile | Stalkk.ed said:
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[...] SMS CPMs are about $50. [...]