Clovr Raises More Cash for New Ad Units That Link Coupons to Credit Cards
Clovr Media has raised $8.3 million in a second round of funding as it sets out to build a new type of loyalty program that links a user’s credit card to a coupon displayed in a banner ad.
The idea piggy-backs on other loyalty programs already in the market, such as those of credit card companies that offer discounts when customers visit certain hotels or rental car companies.
But with Clovr’s platform, advertisers and brands can enable consumers to associate coupons directly with a credit card.
For instance, a banner ad could offer a 10 percent discount to an electronics store. Instead of printing out a coupon, the user can opt to link the deal to a credit card. The discount is activated only if the consumer uses that credit card at the register.
Since coming out of stealth mode late last year, Clovr has been fine-tuning its approach to the market.
Initially, it envisioned working directly with banks to make the service available to customers. But since advertisers want a large audience to target, the company’s co-founder and CEO Tom Burgess said today, the company realized it had to make the platform more widely available.
To that end, it partnered with credit card processing companies to enable 99 percent of debit or credit card holders in the country to participate in the offers. Burgess said that Clovr is now entering beta and that its first offers will start appearing in May when it is commercially available.
Clovr is part of a new market that is leveraging old technology called Card Linked Offers, or CLOs for short.
Coincidentally, one of Clovr’s biggest competitors is also being backed by someone Burgess knows all too well.
Yesterday, Clovr’s close competitor, Offermatic, announced it had raised $4.5 million in a first round of funding. Investors include Kleiner Perkins Caufield & Byers, Ron Conway and Omar Hamoui.
Hamoui was the founder of AdMob, the mobile advertising company purchased by Google for $750 million in 2009. And Burgess was the founder of Third Screen Media, a mobile ad network that was acquired by AOL in 2007.
Today, Offermatic is Burgess’ West Coast competitor, much like AdMob was his West Coast competitor when both he and Hamoui were executives in the mobile advertising space.
A third company competing in the space is Atlanta-based Cardlytics.
Burgess said there’s one main difference between Clovr and Offermatic. Clovr is a platform that any ad network can use. It does not have a sales team and is not offering deals directly to consumers.
Offermatic launched its beta in December, and sends discounts to consumers based on their spending history. Similarly, it links a consumer’s credit and debit cards to its system so that people receive the discount automatically.
To be sure, all three companies are trying to solve the problem of low redemption rates of physical coupons or vouchers.