VisibleBrands lands $2 million for digital coupon service in supermarkets

VisibleBrands has been operating in stealth mode for the past few years, mysteriously building a new digital coupon service from the basement of a mansion in Kirkland. But the 23-person company, which has lined up some heavyweights from retail and the consumer packaged goods business as advisers and investors, is getting ready to take the wraps off the service for the first time with a new offering that the company promises will change the way people shop in the supermarket.

“What we’ve built is a unified ad network that ties targeted delivery of content at home, on the go on a mobile device … and in the store, which we call the moment of decision,” said president Timothy Morton, a 45-year-old former investment banker who previously worked at Microsoft. “Essentially, we’re affecting consumer preference where and when it matters most.”

It does this by displaying promotions on a touch-screen device right in the supermarket aisle.

The company plans to marry online behaviors with activities in the physical store, so a user of the mobile application will be able to get a relevant advertisement based on where they are in the store and past behaviors. For example, Morton said they can figure out if a shopper is on a quick or a big shopping trip in order to deliver advertisements that make sense.

“We are trying to close the loop in the aisle and serve offers based on real-time behavioral targeting,” Morton tells GeekWire. That means consumer product companies like Kraft or Procter & Gamble could serve ads in real-time directly to shoppers.

To some degree, Point Inside is also headed in that direction. The Seattle upstart just scored an $805,000 angel round in August, noting that it is working with super market chains like Meijer on new mobile technologies. Other players in the space include online coupon startup CellFire.

The promise of digital coupons in the supermarket has been discussed for some time, so I asked Morton why he thought the time was right.

He said it is a combination of new indoor location services, which tag items in the aisles, and cloud computing technologies which allows for the company to more cost-effectively build out the ad network.

Morton declined to disclose investors, saying an announcement would be coming on that front in the coming weeks. The mix includes angels from Seattle and the San Francisco Bay Area and former executives who have worked at companies such as aQuantive, Morgan Stanley, Black Rock and others, he said.

Advisers to the company include Bill Keadle, the former senior vice president at aQuantive; John Bowlin, the former CEO of Kraft; Mike Huse, the former president of QFC; and Doug Byerly, a former senior vice president at First Data.

Morton had self-funded the company during its early days, and this marks the first financing event for the company.

He declined to disclose customers, but noted that they have “multiple customers in grocery” that are rolling out this fall. One of those customers includes a chain in Washington state, he said.

In Morton’s view, grocery retailers face a “a lot of pain” with razor thin profit margins of less than two percent. Given that fact, he said many grocers are looking at creative ways to boost profits in existing storefronts as competitors such as Walmart knock on the door.

“What VisibleBrands does for the first time is turn retail into a publisher….. and introduces a new channel and a new framework,” he said. “It is a new opportunity for the retailer to monetize an incremental source of publisher revenue. We essentially turn their stores into a multi-site Web site, where our innovations and our IT allow, uniquely, the ability to intelligently or selectively serve advertising content right down to the shelf. ”

Morton said it took him a long time to get the idea off the ground because of problems financing the business during the economic recession a few years ago.

In addition to the operations in Kirkland, Morton said they have a team working on the product in San Diego.