After Social Analytics Sector Shakeout, Crimson Hexagon Grabs $20M
Marketers care more about what you ate for breakfast this morning than your friends and family do.
The rise of social media has spawned a host of software companies dedicated to tracking and analyzing what people are saying (and eating) online. These companies mine reams of social media posts for nuggets of information and trends that might help brands better understand their customers—and, in theory, use that info to boost sales.
One of the early social media analytics companies, Boston-based Crimson Hexagon, just capped off one of its busiest and best years. It signed up 200 more clients, grew its staff from 73 people to 113, and opened new offices in Chicago and San Francisco. (It also has a London office.)
Now, the company is poised to grow even faster, thanks to $20 million in growth equity financing announced today. The money comes from Sageview Capital, and brings Crimson Hexagon’s total outside capital haul to $37.5 million, the company says.
“We feel that our time has come,” CEO Stephanie Newby says in an interview. “We’re getting huge momentum and pull from customers.”
Crimson Hexagon was co-founded in 2007 by Harvard political scientist and government professor Gary King, an expert in statistical analysis of public opinion. The company’s basic approach was to use statistical techniques to monitor and analyze social media conversations, primarily for marketing and branding purposes.
The startup was part of a wave of social media analytics companies that bubbled up at the end of the last decade. But it aimed to go beyond keyword-based monitoring technologies and “sentiment analysis”—which examines how many people are saying positive or negative things about a particular brand or entity—to offer deeper, more nuanced insights about people’s backgrounds and what drives their opinions and actions.
Crimson Hexagon has tried to accomplish this, in part, by amassing a huge library of social media data—over 850 billion posts and counting, the company says. “That allows our customers to do a lot of historical analysis and comparisons from one year to the next to see how things are progressing,” Newby says.
Information from that library can be integrated with a company’s sales data to more clearly trace lines between marketing campaigns and consumer behavior, ultimately improving business decisions, Newby says. “You can quickly get a lot of [return on investment], rather than just counting a lot of stuff, which was what early movers in this space were doing,” she says.
The social media analytics industry continues to grow, and Crimson Hexagon faces competition from the likes of Brandwatch and NetBase. But there has been some consolidation—as well as casualties—in the past few years as the sector matured. Radian6, Visible Technologies, and Bluefin Labs were acquired, while General Sentiment reportedly shut down, for example. And NM Incite, a joint venture between Nielsen and McKinsey, went through layoffs and closed down most of its business, TechCrunch reported.
It hasn’t been a direct, smooth path for Crimson Hexagon, either. When Newby took the helm in August 2012, she was the company’s fourth CEO in five years.
“We spent some time figuring out what the strategy was and ultimately what the product vision is,” Newby says. “I think in the past three years we’ve finally gotten that right. I wouldn’t take credit for it myself, but I would take credit for building a leadership team that includes … people who have worked with all of us to get that right.”
The crux of the vision is to “build a consumer insights hub for the enterprise,” Newby says. The company started out by serving primarily marketers, but it has since expanded to help departments like product development, customer service, and public relations, she says.
And unlike many competitors, Crimson Hexagon doesn’t want to be a marketing automation platform, Newby says. The company has formed partnerships with Spredfast and Hootsuite, who can offer those types of capabilities.
“I think that the way software works today is people still want to buy the best solution for any given job,” Newby says. “What you really want to do is know what you’re good at, keep doing that really well, and integrate with other things so you can focus on being best in class.”
It’s just speculation on our part, but one could imagine the company drawing acquisition interest from social media giants (maybe Twitter or Facebook) that want to bolster their ability to analyze their users, or perhaps from … Next Page »