People Pattern, a company that evaluates social media to deliver insight about sales leads and other potential revenue drivers, has closed a $4.5 million round of new funding.
It’s the latest evidence that investors are betting on software for marketers. Gartner predicted that the chief marketing officer will spend more money on information technology than the chief information officer by 2017, and so investors are making moves to benefit when that time comes.
Mohr Davidow Ventures led the round for the Austin, Texas based company. The round also contained contributions from private investors. The deal comes on top of a $250,000 round of seed funding earlier this year, People Pattern cofounder and chief executive Ken Cho told VentureBeat in an interview.
“Really, what we’re trying to do is define the audience and the attributes around the audience that talk about the product, brand, or company, and not just around the conversation,” Cho said.
The company does that by applying data science to available social information associated with a particular sales lead. The new layer of information about the lead — that she likes classical music, for example — can be laced into the company’s existing databases, such as a customer-relationship managing tool for managing all the sales leads or even a spreadsheet full of email addresses for users in a customer-loyalty program.
With the new data, users can group their leads into categories and start sending them more targeted content.
People Pattern has been refining its data science algorithms to make the systems work right. The new funding, Cho said, will help the company bring on more staff fluent in techniques such as natural-language processing — the notion of pulling key information out of people’s real written words. People Pattern’s other cofounder, Jason Baldridge, is well versed in that process, as an associate professor of computational linguistics at the University of Texas at Austin. And Baldridge brought with him to the startup two data scientists who studied under him at the university, Cho said. But the team could use some help in developing the product further.
People Pattern’s rise this year coincides with a fertile funding environment for companies that help marketers do their jobs better. Other beneficiaries include Optimizely, a web-optimization vendor that picked up $28 million in April, and HubSpot, an inbound-marketing software vendor that raised $35 million a bit more than a year ago. The Czech startup Futurelytics picked up $800,000 in seed money as it pushes a tool for segmenting customers.
Marketing automation has hit a high point in the past year, too. Marketo went public in April, and Oracle bought Eloqua for $871 million last year. Oracle enriched its holdings by laying out $1.5 billion for Responsys. But software from Oracle, as well as Salesforce.com and Adobe, represent complementary technologies, not competition, Cho said. That’s because People Pattern goes beyond just summarizing what people are saying on Facebook and Twitter and categorizes people based on the things they say on social media.
People Pattern can also craft custom algorithms that can tell customers what they want to know about leads. For example, one algorithm can figure out where a potential customer currently sits in the sales lifecycle.
The startup now has eight customers, including the largest retailer in the world and the largest fast food company in the world, said Cho, who previously cofounded social media software company Spredfast. Even though the startup has already reeled in such big customers, Cho has chosen to make sure its own marketing materials — like head shots — stand out, so the company doesn’t get passed over as just another boring marketing software company. “Everything else is so generic,” he said. “I just thought, there had to be something fun in there,” he said.