• by Laurie Sullivan  @lauriesullivan, March 9, 2010

Startup Analog Analytics emerges from stealth mode Tuesday to launch a software platform that gives local publishers the tools to offer interactive coupons and gift certificates in any media, from traditional to online.

The platform lets publishers run interactive coupons, gift certificates and a daily special called the Bigger Better Deal on radio or television and in print or billboards and have consumers interact through mobile. An SMS feature ties the platform to online data and metrics. Through the dashboard, publishers can check stats and run reports that track impressions, click-through rates, texts, emails and conversions.

Similar to the way "American Idol" fans send a text message to vote for their favorite singer, the Analog Analytics platform lets people send a mobile SMS response back to the advertiser based on radio, TV, print or motion picture campaigns. The platform captures the data similar to a click in an online ad. But rather than just capturing a click, the data identifies location, demographics, and more to better optimize campaigns, explains Ken Kalb, Analog Analytics chief executive offer and founder.

Kalb says the platform can increase revenue for online publishers by 20% to 30% in 45 day. Advertisers also can share specials through social network sites, such as Facebook and Twitter. "We have proven click-through rates between 2% and 10%, which is more than an order of magnitude than you can get from click-through ads," he says. "Ads in the newspapers, for example, are increasingly adding special deals that allow consumers to text in a response in exchange for something free or at a discount."

It took Analog Analytics' team of engineers 18 months to design, build and launch the platform for publishers that tracks the performance of traditional analog campaigns. Now the company supports about 850 publishers and 25,000 advertisers use the network, including local.com, Village Voice, and San Diego Reader.

Most publishers and advertisers using the platform reside in the United States. While the service just launched in Australia, the software written in 8- and 16-bit character sets also can support Mandarin and similar languages. The optimization engine developed in C supports the remainder written in PHP and Ruby.

Kalb's concern for taking the intellectual property into China won't stop him. While the country has been known for stealing trade secrets, Kalb will license the technology to Chinese companies, such as publishers, and allow them to run with it. The "lynch pin" for the software remains the relationship between the publisher and advertiser. All will link together on a series of networks.

The company first targeted large companies and agencies until realizing publishers and local advertisers continue to show the most interest in the platform.

About 58% of 1,002 respondents to a recent BIA/Kelsey survey report using an online coupon when shopping for products or services in their local area. The User View BIA/ behavior tracking study focuses on how U.S. consumers transition from traditional to online information to find and locate local businesses.

The timing is good for a company like Analog Analytics, although the concept of coupons on mobile devices remain new, according to Peter Krasilovsky, vice president and program director at BIA/Kelsey, who confirms seeing a "big movement" toward online coupons. "It's something that makes sense given the economy, but the pick-up is a bit surprising," he says. "People are looking for discounts because the Web has made it easier, but there's also a sense of a need for quantifiable information. Analog Analytics has the ability to make that transition for local advertising to line from a traditional campaign environment."

Krasilovsky admits that conversion rates for Analog Analytics are good, but whether consumers are ready to make the switch to a mobile platform remains to be seen. He wonders if Kalb and the company will fail and "lose their shirts," although the platform provides "a revenue-as-you-go solution."

Kalb has a history or creating successful companies. The Analog Analytics engineering team came from SearchRev -- which supported paid search for Yahoo and Microsoft from about 2006 through mid-2007, along with Coca-Cola and a dozen other major companies, he says. He grew the company by about 500% in 14 months and sold it for 6 times the return on shareholder value. Prior to that, Kalb cofounded Continuous Computing, a company focused on building fault-tolerant telecommunications infrastructure equipment serving Alcatel-Lucent, Cisco, and others.