A New York start-up that helps businesses adhere to laws around marketing and communications via social media, CMP.LY, closed a $2.4 million Series A round led by Innovation Ventures and Originate Ventures and joined by angel investors Jay Baer and Steve Garfield, VentureWire has learned.
Compliance issues are becoming of greater concern to brands, says Tom Chernaik, the founder and chief executive of CMP.LY. In landmark cases, the U.S. Federal Trade Commisssion and the “court of public opinion” have already strongly weighed in on companies’ uses of social media, he notes. In one case, Ann Taylor Loft (a brand owned by ANN Inc.) gave bloggers gift cards to compel positive posts about their products. In another, Reverb Communications Inc.-an agency representing digital media brands like MTV Games and Ignition Entertainment-posted shill reviews in the iTunes store.
CMP.LY’s technology monitors and documents a company’s official social media interactions. Its platform automatically attaches and publishes required disclosures within status updates and blog posts by a marketer using it. The CMP.LY disclosure attachment may appear as a short URL in a character-limited Tweet. On blogs, where a company has paid a blogger to review their products, for example, or where a company is running a contest, the CMP.LY disclosure may include a badge (or “icon”) and short link to a detailed disclosure.
CMP.LY’s new capital will primarily go toward hiring top-notch developers and building mobile products and services tailored for health and finance industry clients, Mr. Chernaik reports. The company also plans to invest in programs to educate professionals, including brand managers, search- advertising and public-relations executives, and attorneys, about evolving regulatory issues.
Currently based in New York City’s Grind, a co-work space for tech entrepreneurs and creatives, CMP.LY now employs eight people full time and boasts twenty paying clients.
With the Series A funding, David J. Freschman, managing principal of Innovation Ventures, and Eric Arnson, managing partner of Originate Ventures, join CMP.LY’s board of directors. CMPLY’s earlier seed investors included Safir Capital, Angel Street Capital and others.
Mr. Freschman told VentureWire he encountered CMP.LY first at an event he hosts, Early Stage East, and was immediately struck by the company’s concept and technology.
“It’s an efficient, compelling proposition for professionals who have to deal with regulatory and compliance issues around social media campaigns as they become ubiquitous and necessary to doing business,” he said.