• by Laurie Sullivan  @lauriesullivan, June 6, 2011

Spongecell has caught the attention of Google executive chairman Eric Schmidt. He, along with Jim Pallotta, chairman and managing director at Raptor Group, led the interactive display ad company's latest round of VC financing. Brian Rooney, board member of the Pittsburgh Steelers, and SilverHaze Partners also participated in the funding announced Monday. This round -- nearly $1 million -- brings the total to about $4 million.

Prior VC funding from Halo Venture Partners, The Pilot Group and SilverHaze Partners in 2007 gave the founding team of Carnegie Mellon computer science graduates financial support to turn an idea based on widgets into ad units.

Spongecell CEO and Co-founder Ben Kartzman said the founders set out to design the ad unit between 2006 and 2007 after brands made it clear they wanted the interactive features embedded in ad units, not widgets. By 2008, he said, the company began to see success, growing the client base from about 10 in 2009 to more than 250 campaigns in 2010. Today, the company supports 450 campaigns, according to Spongecell Marketing Manager Dan Silver.

Today the widget concept integrates into standard banner ads interactive features such as Google Maps, Facebook Likes, Twitter streams, YouTube videos, and the ability to download a coupon -- all within 48 hours. The content in the dynamic ad units also can update based on what someone might enter into a Web-based spreadsheet. It could take weeks for traditional creative agencies to do something similar, but with Spongecell's analytics engine, ad server and toolkit the process has been reduced to days.

The video integration required an infrastructure upgrade to the content delivering network and user interface, Kartzman said in an interview late last year.

By 2015, Google estimates that 50% of all display ads will include video, social media and real-time bidding.

It appears the relationship between Spongecell founders and Schmidt has been brewing since late last year. Spongecell founders were "in Eric Schmidt's office Thursday of last week and he said everything we're doing is in line with our philosophy," Kartzman told MediaPost during an interview in December. "He told us the next generation of ads should be dynamic and engaging. It can't be about the click."