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Helsinki-based software-as-a-service startup Sellforte today announced a €4 million ($4.78 million) funding round. The company says it’ll use the capital to scale R&D on its products and expand its operations internationally, soon opening a new office in Germany.
According to Gartner, big data analytics influences only 54% of marketing decisions at enterprises. Among the top reasons marketers haven’t been able to use analytics in decision making are poor data quality and unclear recommendations. Traditionally, companies have resorted to one-off projects, trying to access marketing campaigns’ results on an ad-hoc basis. For businesses that try to go it alone, marketing data is often scattered around different internal and external platforms, making it difficult to get a clear picture of investment performance.
Sellforte attempts to solve this with AI that measures the effectiveness of marketing investments, generating continuous recommendations for growth. The company, which was founded in 2017, claims its data science models can calculate comparable return on investment for marketing investments across different channels and campaigns by learning from millions of rows of sales and marketing data.
“When you do one-time projects year after year, the models don’t learn from the previous results. For example, TV return on investment could be 5.1 times in 2019, then 2.4 times in 2020, and 6.8 times in 2021, making it really hard to say whether to increase or decrease TV investments as nobody believes in these results because they vary so much,” cofounder and CEO Juha Nuutinen told VentureBeat via email. “[With Sellforte’s technology,] a marketing director can use the platform to compare marketing campaign investments to profitability and uplifts against reference periods in time, as well as measure how marketing affects the key brand KPIs … Additionally, they can get country-specific marketing effectiveness metrics in the same currency, and analyze which media groups perform the best in each country and why.”
Using Sellforte, enterprises can set up pipelines for commercial, media, and secondary data sources, including things like receipt line sales from data warehouses, competitor activities, business KPIs, and online display ad and email campaigns. The customers then identify relevant secondary datasets and apply business priors based on domain expertise before evaluating the results’ reliability. Post-setup, Sellforte updates the results on a monthly or quarterly basis and provides actionable suggestions.
Sellforte typically needs sales and marketing data from the past two to three years to create a reliable predictive model. In refining the model, the company leverages a technique called Bayesian learning that allows inputting prior knowledge in the form of informative priors. Nuutinen says this makes it easier to leverage past analyses and business intuition as well as develop granular models without breaking their consistency. For example, instead of simply showing weekly sales totals, the models can expose what’s going on at each specific date, product group, brand, and location.
“We typically utilize 10 million to 500 million rows of data rather than hundreds or thousands of data points that competitors would typically utilize in projects. We have also been doing sales forecasting and optimizing future campaigns and media plans,” Nuutinen explained. “Other examples include text classification to prepare media data, training machine learning models to explain marketing effectiveness by geographic and postal code area by population structure, life stages, activities, and other similar statistics.”
The marketing analytics sector is predicted to grow from $3.01 billion in value to $6.92 billion from 2019 to 2027, according to Verified Market Research. Sellforte has competition in media agencies and management consultancies like Ebiquity, GroupM, and Accenture, but Nuutinen says that what differentiates the company is its ability to learn and improve with model updates, recommend actions, and track the realized business impact of those recommendations.
“Sellforte’s platform is a home for previously scattered internal and external marketing data … This creates a common currency across the previously incomparable Facebook impressions, Google clicks, and many other media channel-specific metrics. Continuously updating ROMI [return on marketing investment] results enable our customers to run controlled tests with all of their marketing campaigns — in digital and traditional media, both in offline and online sales channels,” Nuutinen said. “Typically our customers achieve 20-30% improvements in their marketing effectiveness by optimizing their media mix, campaign mix, brand mix, geographic mix, and timing of media investments.”
Sellforte, which has 33 employees, claims to serve 20 “industry-leading” businesses such as C&A, Elgiganten, and Cloetta in 14 countries from its offices in Finland, Sweden, and the Netherlands. Annual recurring revenue stands at €1.5 million ($1.79 million) and is expected to double annually for the next two years.
Sonae IM led Sellforte’s latest funding round with participation from Bonnier Ventures and Icebreaker.vc. It brings the company’s total raised to date to €4.5 million ($5.37 million) at a post-money valuation of €15 million ($17.9 million).
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