CBS, ad giants WPP and Interpublic Group and Lachlan Murdoch have taken equity stakes in L.A.-based online ad agency Spot Runner, which allows small businesses to create and place ads in local markets.
All three participated in a $40 million investment round led by Allen & Co., which was joined by a number of other private equity groups and financier Vivi Nevo.
“We consider this a huge milestone for the company as two of the largest advertising holding companies and a major broadcaster have aligned with us,” said co-founder David Waxman.
Startup allows local businesses to buy local TV ad campaigns online, as well as choose from thousands of pre-produced ads that can be customized for individual businesses and markets.
“We believe Spot Runner will expand the market for local advertising by providing clients with a quick and easy way to promote their businesses,” said Joseph Ianniello, CBS senior VP of finance, who handled the deal for the Eye, which owns 39 local TV stations.
Unlike Google, which is offering TV ad spots, local stations don’t have to give up their own ad inventory to participate in Spot Runner.
Both WPP and Interpublic said they plan to use Spot Runner’s Web-based platform to target media at a local level.
Lachlan Murdoch left News Corp. in 2005, but his father, chairman Rupert Murdoch, has held out the possibility he could return. Lachlan’s investment in Spot Runner is one of a number he’s made since moving to Australia and setting up Illyria Pty.
The younger Murdoch, who is prohibited from competing with News Corp., also reportedly took a 10% stake in DVD rental company Quickflix for $620,000.
Spot Runner’s co-founders, Waxman and Nick Grouf, previously co-founded PeoplePC, which was later sold to Earthlink, and Firefly Network, which sold to Microsoft.