It might not be Spy vs. Spy exactly, but today’s business fortunes are increasingly won or lost on intelligence. In the brave new digital economy where consumers and their behaviors can be modeled with breathtaking specificity based on their online crumb trails, intelligence is data, and data is money. But behind the scenes, it’s a messy, broken world. The ever-proliferating invisible tags used by websites and third parties to collect information and track visitors can slow page loads, push overtaxed IT teams into despair, and leave companies without complete control of their data.
Enter Chicago startup BrightTag, which says it’s found a way to overhaul the creaky cobbled-together system of tag-based data mining while giving businesses ownership of the information they glean from site visitors. In so doing, the growing startup has landed some serious clientele, ranging from the Obama campaign to corporate giants such as Gap and Old Navy. The company is also getting some hometown love—last week BrightTag took home three of Built In Chicago’s annual Moxie Awards, including Best B2B Startup, CTO of the Year, and Startup of the Year.
The three-year-old company is a bright star in a growing constellation of Chicago tech startups. Building on the meteoric rise of first-wave Chicago startups such as Orbitz, Groupon, FeedBurner, and GrubHub, a whole slew of new outfits are setting up shop in the Windy City and persuading investors that Chicago is more than a layover. Chicago-based startups raised more than a half-billion dollars in venture capital last year, and new infrastructure completed this spring in the tech-heavy River North hood has given the scene an added boost. In March, tech incubator Catapult Chicago opened 12,000 square feet of space where the nonprofit provides cheap rents, mentoring, and support services for more than a dozen startups. Not to be outdone, the nonprofit 1871 opened 50,000 square feet of renovated space in the colossal Merchandise Mart this May. The organization provides space for roughly 100 startups (over 300 applied) similarly seeking affordable rents and a collaborative vibe.
Its offices just a Frisbee’s throw from 1871’s new digs, BrightTag is a next-generation startup with deep roots in some of yesterday’s biggest Chicago standouts. BrightTag CEO Mike Sands joined Chicago-based Orbitz in 2000 and was chief operating officer by the time he left in 2006, while BrightTag Chief Technology Officer Eric Lunt is one of the founders behind Chicago startup FeedBurner (scooped up by Google in 2007). Fittingly, BrightTag is in the business of providing solutions to some very technical problems afflicting its startup forebears and the way in which they manage website data.
Tags are powerful marketing tools, but with the average large corporate website harboring anywhere from 50 to 150 tags throughout its website, they can also be a colossal pain. According to BrightTag execs, high tag counts can lead to slow page loads, create tons of work for IT departments, and hand third-parties data firms the keys to potentially lucrative data streams. (Those third-party firms access a website’s data through the tags hosted by the first-party website. In return, those marketing and analytics companies crunch the data and deliver all sorts of sophisticated consumer information, and they also enable companies to dangle precision-guided ads before consumers as they flit across the web.)
But the current system is rather inefficient. "Tag management has been a mess for a long, long time," said Adrian Tompsett, vice president of business development for DataXu, an online marketing and analytics company (and BrightTag partner) that recently helped Ford test ad campaigns that display relevant online ads based on variables like the make of car the potential buyer was researching and how close they were to purchasing it.
BrightTag founder Marc Kiven, leaning on 15 years of experience working for digital marketing companies such as Avenue A | Razorfish, says he began building BrightTag in the summer of 2009 after hearing continual tag-related complaints from his digital marketing colleagues. His company’s solution is a cloud-based system where a website can simply put a single piece of code on their site (rather than dozens of tags), allowing the site to send a master set of data back to BrightTag, where it’s cleaned up and "normalized" before being sent to approved third-party marketing and analytics partners.
Without having to process dozens of tags on dozens of pages, companies such as BrightTag client Orbitz can change their marketing strategies (for instance, which ads appear on which pages before which potential customer) much faster, as well as easily adopt new privacy standards (by giving web visitors a choice on whether or not their data is shared with third parties, say) without having to make individual changes on dozens of third-party tags. "If the website owner can’t control the data being collected on their site, it’s hard to ask them to turn around and address the consumer privacy issues," Sands says.
Investors have taken note: BrightTag has raised some $23 million in capital and landed heavyweight clients, including JetBlue, Banana Republic, Crate & Barrel, and Barack Obama (his campaign website employs BrightTag technology). Rahm Emanuel even swung through the startup’s River North offices when he was running for mayor and looking for ideas to give local tech a boost.
Last November, BrightTag announced a new one-click privacy button that websites could place on their sites that would let a visitor opt out of being tracked on the site by third-party data sleuths. While the feature has been adopted by some of the company’s European clients, it hasn’t gained traction in the United States, where laxer privacy standards still prevail.
Yet the debate around U.S. standards is approaching the boiling point this year. In February the White House called for a comprehensive "privacy bill of rights," followed by the FTC’s long-awaited March report in which the agency called for the industry to adopt a "Do Not Track" option in browsers by year’s end. While the online data industry has signaled some support for a Do Not Track browser button, it remains unclear what that would actually mean—no tracking period, or no third-party tracking, or just no targeted ads? Just how many tracking loopholes and exceptions will the adopted standard have? It’s not hard to find pushback on data restrictions from online marketers: Microsoft recently infuriated the ad industry when it announced its Internet Explorer 10 would have "Do Not Track" as the browser’s default setting.
But even if stricter online privacy standards are ultimately adopted and enforced, BrightTag says its business model can easily adapt, as it already has in catering to both U.S. and European markets. Barring the unlikely curtailment of the data-fed online marketing and analytics industry, the fast-growing startup will keep helping corporate clients drill, refine, and ship vast reservoirs of data. "We’re not hiding," says Sands. "We are out of the box already ready for whatever protocols come down the pipe."
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[Obama Image: Christopher Dilts for Obama for America]