• by Joe Mandese  @mp_joemandese, May 7, 2008

Spot Runner, the online virtual ad agency backed by Madison Avenue giants Interpublic and WPP, this morning announced a new round of funding from strategic investors that include one of the world's largest advertisers, as well as media companies that will help it expand into key international markets. New investors in the $51 million round include Groupe Arnault/LVMH, the world's leading luxury products marketer, with a portfolio of more than 60 upscale brands including Moët & Chandon, Hennessy, Louis Vuitton, Givenchy, Donna Karan, Sephora and TAG Heuer.

Group Arnault's participation is telling because it - along with other new strategic investors - got an early look at Spot Runner's next generation of advertising and media buying technology platforms. To date, Spot Runner has focused on harnessing the so-called "long tail" of the advertising marketplace: smaller advertisers and mom-and-pop organizations that may not necessarily be able to justify hiring a full-service advertising agency to create campaigns and manage media buys. The Spot Runner system enables them to do all that automatically online with sophisticated tools that can create ads based on templates, and media buys that draw from relatively affordable advertising avails.

It was such solutions that attracted the likes of Interpublic and WPP, as well as big media companies such as CBS, to back Spot Runner's early rounds of investment. Those companies also participated in the latest round, and given its relatively higher market valuation, Spot Runner CEO Nick Grouf says there was relatively little dilution of the stakes held by the early round investors.

The addition of Group Arnault, he says, is consistent with Spot Runner's push to broaden from a long tail to a solution for bigger advertisers looking to develop better and more streamlined means of created highly targeted advertising and media buys on the fly.

"[Group Arnault] LVMH brings a different perspective, that of an advertiser," says Grouf. "It gives us a richer understanding of what that will be as we move into a more fragmented environment."

Grouf adds that perspective will be instrumental as Spot Runner seeks to broaden its base in way that might ironically compete more directly with its big agency investors.

"It brings entirely different categories of advertisers in the market, not just small advertisers, but advertisers who are looking to be much more targeted and focused in the messages they are serving."

Asked what new technologies and applications attracted Group Arnault, Grouf demurred, saying those announcements would follow shortly, but he said the addition of other new investors - including Daily Mail and General Trust and Grupo Televisa - would help Spot Runner expand internationally, in Western Europe and throughout Spanish-speaking Latin America, respectively.