In-text advertising technology provider Kontera has raised $15.5 million from its current investors Sequoia Capital, Carmel Ventures and Tenaya Capital, the former venture capital arm of Lehman Brothers. This is the second Israeli startup to announce multi-million VC rounds today after 5min informed the public about its $7.5 million Series B round, and once again first reported by business news site Globes.
Kontera provides publishers with real-time semantic analysis technology that can enhance content and other information to dynamically link terms that most accurately represent and predict user-intent and engagement. This is known as in-text advertising, and you might recognize the double-underlined words on some sites that make display ads pop up when you hover your mouse over them. Other market players include Vibrant Media and Infolinks.
Personally, I find this type of contextual advertising annoying from a reader perspective, and I don’t think I’ve ever clicked on any ads launched by in-text advertisements, unless it was by accident. But I keep hearing from publishers and advertisers who have implemented campaigns using in-text advertising that it’s actually a highly effective way of pay-per-click promotion, and you wouldn’t be the first to tell they were skeptical at first but lauding the technology afterwards.
With the fresh injection, the total amount of capital pumped into the company has now reached $32.8 million. The $10.3 million Series B round now dates back nearly two years.
Their website appears to be dead. It is all a muddle of links. :/
Oh, and I think your link to Vibrant is incorrect – it doesn’t mention anything about advertising. I think it should be: http://www.vibrantmedia.com/
You sir, are correct. Updated.
Mmmm… I can’t get Kontera’s site to display properly in Firefox at all. But it works in Safari…
Robin, thanks for updating the link to Vibrant!
It seems to me that if Kontera were really hurting for publishers, messing up with relevance, or not paying like a lot of you are saying, it woulnd’t be growing with such speed. I think a lot of people forget that the text of sites is a large part of what brings traffic and readership. I just saw Kontera ads on Smart Money-if they don’t know where it’s at then who does?
Any site that runs these ads clearly doesn’t care about their readers
They care… but not much!
Isn’t Vibrenet ‘controlling’ this awful market?
I hate to see them on sites I’m visiting…
“Real time semantic analysis technology”
Judge for yourself – http://konterasucks.tumblr.com
I often wonder what readers think about these ads. I have seen site that use it and it doesn’t bother me. But I maybe the minority.
Right now I only run direct and CPM ads on my site. But I am always looking for more ways I can make money and continue to produce a great content for my readers. Its a balancing act really.
Hate them. I kept clicking on them, thinking they were links, then thought my browser had been hijacked when I was re-routed to some page full of advertising. I was about to post in a forum because I thought I had a virus.
Instead, I’m just dropping my daily visits to these two websites. I hate what they look like now anyway. I’m assuming the advertising text that appears before each day’s blog can also be attributed to Kontera?
High Click thru rates are due to people trying to get away from the annoying ads. This is click fraud.
This is definately click fraud as user’s are clicking on these ads thinking they are regular hyperlinks.
Then you get dumped on a site that is completely and utterly irrelevant to the words you clicked on.
Advertisers that use this system may be getting traffic but I’d be interested to see their bounce figures. Must be astronomically high.
The whole thing sucks the life of of the UX anyway…
These ads are neither relevant to the content on the page or useful. Since they are triggered by keywords rather than the “gist” of the article.
This company has been around a long time though so this large chunk must either be a way for the founders to get some cash or to keep them alive long enough to possibly turn a profit.
How can a company that is nearly 8 years old need more VC money unless they are terrible at managing their business?
Actually they announced their profitability, which other publications did mention in their writeups.
With over 100M monthly uniques (comscore), they hardly seem like a company in need of money. And they’ve certainly grown much faster than Vibrant.
The adage holds true, those who are able to raise money right now don’t really need it. This size of a raise by savvy investors like Sequoia has a single purpose, and that’s to take a commanding lead…
I think there’s more to the story here, which TechCrunch has not really covered.
They have 110 employees which probably puts them (with servers and bandwidth) at a $2MM / month expense rate.
They also subsidize and guarantee payouts to many publishers regardless of the ad performance just so they stick to them and not move to Vibrant (Vibrant does the same thing and they have bigger pockets).
Relevance & semantic technology are just buzz words they use in their marketing messaging. The reality is completely different. Just look at sites that use Kontera, what words are being turned into fake links and what ads show up for these words.
Here are a few examples:
http://konterasucks.tumblr.com
love this
The real problem with Kontera isn’t the annoying ads, it’s that the payouts suck.
how much are the payouts / what’s the CPM?
Cost per click for a publisher with kontera is about 2 cents in average.
There’s more than one way to monetize a semantic language and contextualization engine. One way is to sell ads against the results in the form of an ad network, sure. A different angle was explored when Kontera was launched back in 2005 but unfortunately didn’t gain internal traction. I do believe Lucid Media have since taken advantage of that revenue model — to a certain degree. Others are improving upon it. Point is merely – don’t kick semantic to the curb as a viable technology offering just because of the revenue model some have chosen … PS: Congrats to the hard-working folks at Kontera who have earned the opportunity to grow their business.
look at an alternative called commentino, they will put paid comments on your blog and they pay the blog owner http://snipr.com/nt2e2
Its surprising that many well known sites have implemented Kontera on their sites
I agree with it the same that I dont recall ever clicking on those ads but then if its out there, coz someone is using it.
I don’t mind these adds at all and I don’t think they are any less relevant than other keyword-based advertising solutions such as Google AdSense. I’d rather have these in-text ads than the standard banner adds that often cover half the page.
The problem is not the method of ads, it is the ads themselves are usually to crap websites… people won’t click an add type more than a couple of times if the websites they link to are crap. This is something none of these add interfaces get at all. It is why adsense is useless now..
“one man’s annoying ads is another’s useful suggestions”
Techcrunch uses in text ads.
but this post is about in-text content ads and not the normal text ads.
thanks for the information
We use Kontera and are very happy
As much as I chide techcrunch at least you guys are brave enough to say it to people that this stuff is so damn annoying. The worst is when it locks up your browser for 1/2 a second while it downloads the advert.
$15.5 milion to be spent on more annoying in text ads
To each his own. Its not just Kontera, I happen to find the bevy of animated ads on TechCrunch to be *very* annoying. Just on this page I’m bombarded with jumpy animations for Rackspace, (MT), Mojiva, IronScale, iContact, Levelwing Media, InetU, iContact, LiveStream, etc. Heck, when one comes to this site about 40% of the page real-estate is covered with attention grabing ads, that are not very relevant.
But… I also realise that this is how TC makes its money and it is how they are able to provide me with good content. So I accept it. The decision of how to monetize the site rests purely with TC, and I’m sure they weigh their options very carefully. As do all publishers.
I find it odd that TC, who in theory celebrates the spirit of the entrepnuer, is so harsh on someone who is trying to find alternate and to my pallet less intrusive means of showing related ads.
Advertising on the web has already gone through several evolutions (we’ve seen banners, text ads, interstitials, etc.) It is naive to think that it will evolve no further. And it is naive to think that all of the forms of advertising that we see today will not themselves evolve and improve.
Ultimately the market will speak, and right now publishers, as proxies to concentrated user communities, do seem to be accepting Kontera and others, who are putting forth alternatives to the same-old-banner solutions.
I agree those Kontera links are annoying. People say that they’ve made money with those Kontera links, but I really can’t imagine people clicking on them.
I think people rarely want to click on such ads because they are not relevant to the content.
The only reason these ads are clicked must be readers trying to get away from them and accidently clicking them.
Just cant stop my self to comment on your blog. Good post.
Robin,
I love how you and some of the users comment that intext is annoying, but TechCrunch and “Any site that runs these ads clearly doesn’t care about their readers” is running SNAP SHOT which is based on the same technology of an ad appearing when a user mouses over the hyperlink.
And its deployed in multiple areas within a paragraph. Large, top tier publishers can control this from happening to only have 2-3 links on a page with paragraph separation. I guess thats not TechCrunch.
If Kontera has 110 employees, double-digit quarter-on-quarter revenue growth and more than 100 million unique users per month it means that thousands of publishers like it. If Kontera generates clicks on their ads, it means that users like it. And if advertisers keep spending their money on Kontera, it means that they are happy with the results, and they like it. .. so who doesn’t like it? us savvy users?
Publishers making shit money with kontera may not like it, they’re like bloodsuckers: take the traffic and pay shitty 2 cents a click where google would pay at least 10 cents…
good tech
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Kontera’s been running on my site for 8 months with no user complaints whatsoever.
Whether you like ‘em or not, I’m sure their $15.5 Million of fresh VC will only further increase market saturation.
fb, google, kontera and so on would sell text ads in your underwear if they could!