As the traditional ad market falters, social media appears poised to step up and claim part of the void left by print advertising sales. Meteor Solutions offers a software platform that allows brands to measure and increase the effectiveness of their social media marketing program. With the company’s patented software, customers can measure, manage, and monetize ‘earned media’ ? content like news, tweets, blogs, and videos that a brand creates to be shared among customers through email, blogs and social networks. The aim is to accurately measure the real impact that online word-of-mouth activity has on a company’s brand image and bottom-line sales. Today, such earned media is more valuable than traditional paid online advertising such as banner, search and video ads, which are being ignored by consumers even as they are more expensive. Meteor’s technology allows marketers to see exactly who is sharing content about their brands and where; how many people are viewing, sharing, and commenting on their viral videos and other marketing content; and whether the sharing of this content is translating into real sales.
Founded in 2008, Meteor is the result of a merger between Fyreball, founded by Pete Parsons, and Reach Machines, founded by Ben Straley in 2007. Straley, CEO, and Parsons, Chief of Products, formed Meteor so that they could offer brands a way to advertise and market via social media, while connecting with customers on a personal level without being too self-promotional. Companies were spending money on strategies they weren’t sure were working, such as posting viral videos about their brands on YouTube, to tweeting about new products or buying ads on Facebook.
The Seattle-based company has raised a total of $2 million: $1.1 million from Seattle and Bay Area angel investors in 2007 and $900,000 from angel investors in 2009. Meteor is on the lookout for new funds and plans to close a round in the third quarter of this year.
Some of the features Meteor offers overlap with other companies in this space. For example, website analytics companies such as Omniture and Google Analytics have optimization features and measurement services; comScore, NNR and Quantcast measure audiences; display advertising platforms like Atlas and Dart have display advertising platforms; and Share This and Ad this provide sharing tool providers. But no single company offers the same combination of services that Meteor does. Although there are several technologies available that claim to allow marketers to measure ‘buzz’ online, and find out what people are saying about them on Twitter or Facebook, this buzz-tracking doesn’t help marketers figure out exactly which earned media and paid media programs are actually impacting site visits, click-throughs, and conversion
The nascent social media marketing industry is set to grow at an exponential rate. A study from the Society for New Communications Research found that marketers will spend more on social media marketing than on traditional marketing by 2012, while analyst firm Aberdeen found in March that 63% of companies plan to increase their social media marketing budgets this year, even amid the recession. Forrester Research found that a full 95% of interactive marketers plan to maintain or increase their social media spending. But as popular as social media is today, research firm eMarketer recently reported that 59% of companies found it “difficult” or “very difficult” to measure the effectiveness of their social media marketing. Companies seem to be spending on this form of marketing despite having little idea whether it is driving brand recognition or boosting sales. All these companies are potential users of Meteor. Since launching its program this year, the company has already signed customers such as Microsoft, Alaska Airlines, and Cisco and is working closely with agencies such as Wunderman, Ayzenberg Group, and Spring Creek Group. Meteor is growing rapidly and has over 20 paying customers from industries such as entertainment, travel and technology. It is already generating revenue and expects to be cash flow positive in 2009.
The company’s business model is a SaaS subscription model wherein customers pay a per-month fee (starting at $295) calculated based on their use of the software.
Meteor’s target market is wide and includes any brand that wants to connect with new customers via social media. Advertising and marketing agencies also use Meteor to measure the success of the social media programs they create for clients. Further, Meteor delivers software and services to online publishers such as news websites, game publishers and video sites that want to track the value of their content based on the pass-along rates by email, across blogs, throughout social networks, via link-sharing programs, and on video-sharing sites. Publishers use Meteor to find out what content is the most popular and is generating the most conversation, and then use this information to set prices for advertising associated with that content, with premium prices for ads placed near buzz-generating content.
Regular readers will know that I devote signifcant space on the blog to social media and online business trends. As I have mentioned before, despite its importance to online business, the field of web analytics is still inaccurate and archaic. Over the next few years, even stalwarts such as Omniture will need to innovate or acquire innovators to stay current. Another innovator in the analytics and optimization space is Enquisite.
As it is still new, Meteor Solutions is focused on growing, acquiring new customers, developing their technology, and building a great company. There are no exit plans yet, says Straley.
This segment is a part in the series : Deal Radar 2009