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Advertising - Wednesday, April 9, 2008

Search Engine Marketing Firms Continue to Raise Funding - Kenshoo and Marin Software

Arts Alliance announced today that it has completed an investment in Kenshoo. Arts Alliance is the second venture capital fund to invest in Kenshoo, joining Sequoia Capital.

Kenshoo's flagship product automates the creation and management of search marketing campaigns. It helps users to manage bids and analyze click fraud among other things.

Kenshoo is led by CEO Yoav Izhar-Prato who previously ran Beijing PrePay.

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A Kenshoo competitor, Marin Software, has also just closed a round of funding. The San Francisco-based firm has raised $7.25M in Series B funding led by Benchmark Capital. Marin feels far more mature than Kenshoo at this point.

Marin charges 5% of search spend for $50K monthly budgets on down to 2% for the largest budgets over $2M per month. The company has attracted more than 25 customers, including Zappos.com and ZipRealty, as well as agency partners such as Avenue A | Razorfish.

Marin is led by CEO and co-founder Chris Lien who was COO at Adteractive.

We have heard a number of insiders speculate that the search engine marketing game is over. As Google consolidates the market and if MSFT succeeds at owning Yahoo there are fewer reasons to pay someone or to buy software to manage this for you. But the size and growth of the market is indeed impressive and leaves plenty of room for startups to growth. JP Morgan says that paid search in the US is expected to grow 23% annually, from $11.8B in 2007 to $26.8B in 2011. Over the same period, markets outside the US are projected to grow 34% annually from $10.2B to $33.1B.

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