Solve Media, Backed by First Round Capital and AOL, Uses Online Ads to Tell People and Spambots Apart

New York’s Solve Media, funded by AOL Ventures, New Atlantic Ventures, First Round Capital, and others, is putting Web advertising in hard-to-miss places. The two-year-old startup combines ads with the verification systems users must respond to when joining websites or requesting lost passwords. Solve Media’s CEO and co-founder Ari Jacoby says the idea is to change the way the public interacts with online ads by incorporating them into such access points. “You have to instill brand memory,” he says.

So far Solve Media has raised nearly $6 million, according to Jacoby, from backers that include angel investors Brian O’Kelley, CEO of AppNexus, and Roger Ehrenberg, founder and managing partner of IA Ventures. Jacoby says advertisers such as Toyota and Microsoft and websites such as AOL’s MapQuest use his company’s system to increase brand awareness among users.

Jacoby is putting a different spin on the verification method called CAPTCHA, which requires people to type in text to prove they are breathing, carbon-based life forms rather than spam bots. (CAPTCHA is an acronym for Completely Automated Public Turing test to tell Computers and Humans Apart.) Such tests require people to interpret distorted, yet readable, letters and numbers that a computer could not. This is not the same as entering a personal password for security purposes, but it is frequently used to ensure that a living person is trying to access a Web page.

Rather than type in the random characters found in the CAPTCHA method, Solve Media’s system asks users questions about advertising they see on the login page. For example, a visitor might be asked to type in the brand name of the product that is on display. Jacoby believes this type of advertising may be more engaging than static ads because it requires users to repeat product names and slogans. “Let’s put ads in front of people where they’re already paying attention,” he says. “Let’s fish where the fish are already.”

Jacoby would not give specifics on how Solve Media confirms the user has given the correct answers, but he did say financial services technology is part of mix that guards against hackers. “The system makes it very hard for those who would seek to cause any of our [website] publishers a problem,” he says.

In addition to verifying logins and registration, Jacoby says his system can be used when someone wants to share online content with specific friends via social media or comment on an article or video. “We sit at key access points on websites,” he says. “Think of us as a turnstile for the Web.”

Jacoby sees Solve Media as way to attract more advertising revenue to the Web. “Some companies say they prefer to buy television [advertising] because their options are pre-roll video and online banner ads,” he says. So-called pre-roll ads are essentially commercials that run just before online videos begin. Rather than hope consumers click on such ads, Solve Media has positioned itself as a medium to make the brand names active parts of websites’ functionality.

Ari Jacoby, Solve Media's CEO

Solve Media faces an already competitive market for ad dollars. Others such as NuCaptcha in Vancouver; Y Combinator alum DoubleRecall in Mountain View, CA; and Ads Captcha in New York all offer comparable services to Web page publishers and advertisers.

Jacoby says Solve Media shares revenue with the website publishers hosting the ads after users fill in the correct response. “We only charge [the advertiser] when someone types in the equivalent of ‘Coke is it’,” he says, referring to a slogan for Coca-Cola products. He says this method affirms that the brand message was conveyed to the users.

The management at Solve Media has experience in the direct response advertising industry. Georgetown University alum Jacoby previously co-founded VoiceStar, a call tracking and analytics service for advertising. Solve Media’s president and co-founder Todd Lieberman was CEO of VoiceStar. “If you were a hotel company and you wanted to know which advertisements were sending you bookings and leads, we would track [incoming direct response] phone calls,” Jacoby says. VoiceStar was acquired in 2007 by Marchex for $20 million.

Solve Media was founded in October 2009. The company launched its service in September 2010 and serves companies in such industries as automotive, packaged goods, and finance. Jacoby says advertisers such as InterContinental Hotels Group, owners of the Holiday Inn brand, and more than 2,000 website publishers such as Meredith Corp., owner of magazines that include Better Homes and Gardens, use his company’s service.

Jacoby says Solve Media has a staff of about 30 and is currently hiring more engineers and sales personnel.

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