Yext Looks to Keep Local Ads in Sync

Howard Lerman wants Yext to become the hub that organizes local listings for businesses.

Image: Yext

Howard Lerman thinks he’s found a particularly rich vein in the great dig for online ad dollars by going local.

“We see this as being a huge, huge, huge opportunity,” the 31-year-old Duke University graduate and cofounder and chief executive of Yext told Portfolio.com. The opportunity stems from a major change in direction the New York-based company made a year ago. Yext pivoted from acting as a plain-vanilla online ad platform to one based on making sure the dozens of local online listings for any given company were up to date and consistent, whether a consumer was looking at a listing on Yelp, Google, Facebook, or any one of 36 sites for local business advertisements.

“Just like Dropbox syncs your files everywhere, we sync their listings,” Lerman said.

For Yext, Lerman said, that was a big bet in an online-advertising arena that has the potential for huge payoff. Marin Software, another advertising platform, announced it had raised $30 million in one funding round Monday. Another, nRelate, has signed up 20,000 publishers to use its tools for search engine optimization and advertising that can be viewed as valuable content and is in the process of raising money.

Yext itself has raised $38.8 million from venture capitalists since its founding in September 2006, and it was performing well before the change, Lerman said. But he and his team saw a tremendous need for businesses both large and small to keep listings current, now that many people use local searches to find everything from where they want to shop to where they want to eat.

“We saw this opportunity…and so we launched out listings product called power listings,” he said. To make that change, though, Lerman had to put up $10 million in guarantees to publishers who used his advertising platform. “We had to take a $10 million bet, and, boy, was that crazy. We basically bet the whole damn thing on this new business. Betting a big business on a potentially massive business is more challenging…than starting a new business.”

So far, the bet has paid off. Lerman’s team has landed 35,000 customers for its service. Revenue from the power listing service was close to $20 million in 2011 and is expected to head north of that this year.

The way Lerman sees it, there’s plenty of room for growth. After all, he observes, there are about 24 million business locations in the United States. And what Yext does doesn’t have to stop at the border.

“We’re focused on expansion,” he said. “We’ll have an eye towards international in 2013.”