Venture Firm Backs Nielsen Foe, Deal Tied To Patent For Addressable Ads

TV ratings start-up erinMedia is no longer simply the Don Quixote-like quest of Florida real estate tycoon Frank Maggio. It's now the quest of a quarter billion dollar venture capital firm that has bought in with $25 million in equity financing and a promise to help attract strategic partners in the advertising and cable TV industry that can take it to the next stage in its battle against Nielsen Media Research.

The stake from the as-yet-unnamed VC firm comes as erinMedia has been granted a new U.S. patent, the sixth of eight claims it has filed for its proprietary methods of modeling TV audience ratings from digital set-top data.

The new patent goes beyond erinMedia's original goal of simply providing a superior TV ratings system, suggesting the company also plans to transform the way TV advertising is targeted and distributed by advertisers.

The new patent covers an application for placing targeted advertising based on privacy-compliant information about TV viewers that is derived from the digital TV set-tops they use to watch television. The application goes beyond conventional addressable advertising systems, which typically target advertising based on neighborhoods or zip-codes to individual households, and even people watching within those households.



"We are at a tipping point," Maggio told MediaDailyNews Monday after news of the private equity stake began spreading in the Florida business press. Maggio declined to disclose the identity of the venture firm, but said it was one that is focused primarily on advertising and new media start-ups, and that one of the terms of the agreement is that it will play an active role in developing alliances that fuel erinMedia's growth.

He said the investment follows six-months of discussions that began last summer when Maggio unveiled a plan to build and industry-wide coalition of advertisers, agencies and TV operators to build a census-based system for measuring TV audiences.

Maggio said the venture firm was attracted mainly by the patents erinMedia has secured and the potential of the intellectual property.

He said erinMedia's federal antitrust suit against Nielsen was not a material factor in the decision, and declined to characterize the status of that suit.

The new venture capital is earmarked fro upgrading erinMedia's hardware and software systems, to hire additional staffing, and for marketing.

Nielsen executives have maintained that erinMedia is little more than a nuisance and that its methods of generating TV ratings from digital set-top data are incomplete at best. Another major research firm, TNS, meanwhile, has had some success deploying a similar model, and some of the major cable TV operators in the U.S. have begun discussing the possibility of aggregating privacy-compliant data into a census-based ratings system.

The operators of other digital set-top boxes have also begun marketing audience clickstream data. On Monday, Publicis' Starcom MediaVest Group announced a deal to license TiVo's set-top data to help with its media planning and buying decisions.

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