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Compendium casts eye on national blog market

February 23, 2009

Two-year-old tech startup Compendium Blogware has launched its first out-of-state sales force and said it signed on 70 new customers in the fourth quarter.

Compendium helps companies launch blogs using its software, which is designed to improve the odds a firm pops up high on the results page of a Web search engine.

The company has grown to 35 employees, having added four this month as part of a new sales force in Charlotte, N.C.; Chicago; Dallas; and Houston, said co-founder Chris Baggott.

"We'll have in the 60s by the end of the year as far as employees, is probably my guess," said Baggott, 48.

He's not one to bet against. Baggott and Scott Dorsey founded the local e-mail marketing firm ExactTarget, in 2000. The firm's revenue is now estimated at more than $48 million.

Baggott and Ali Sales, 27, founded Compendium in early 2007 and have built the company to the point of packing the 14th floor of 55 Monument Circle.

Sales has worked at such local companies as ExactTarget, Resort Condominiums International and ChaCha Search Inc., the human-assisted Internet search engine.

Compendium said it has about 400 customers, up from 130 last May. The bevy of new clients helped boost sales 235 percent in the fourth quarter, Baggott said.

Existing customers include big law firm Ice Miller and regional hospital giants Clarian Health and Community Health Network. Compendium makes its money through annual subscriptions ranging from a few thousand dollars to several hundred thousand dollars per customer.

Baggott declined to disclose Compendium's revenue, but said he expects 2009 sales to be five times that of 2008 as the company capitalizes on the growing popularity of blogs as a marketing tool among businesses.

He said the recession has accelerated the trend as companies look for a lower-cost way of marketing as opposed to traditional advertising that favored firms with the biggest ad budgets.

"It's not about money anymore. It's about effort," he said.

Blogs give companies a way to retain existing customers as well as attract new ones. Locally based Century 21 Scheetz Real Estate, which recently became a Compendium customer, was trying to figure out why the firm showed up prominently in search engine results only about 25 percent of the time.

After it launched its blog, Scheetz wound up on the front page of the search results about 60 percent of the time, said General Manager Patty Bender, one of nine people at the firm who maintain a blog.

One of her recent posts showed home foreclosure data in the metro counties under the headline "Indianapolis bank-owned homes," which is one of dozens of phrases the firm is using to draw hits.

One reason blogging can improve the odds of a firm's popping up prominently in search results—besides clever use of keywords—is that blogs tend to be updated frequently. The most recent posts often rise to the top of search results.

"That is why blogging is so spectacular for search engines," Baggott said.

He points to data showing that the 87 percent of adults on the Web search multiple times a day. That's one reason about 50 percent of online advertising, or $12 billion, is being spent to have one's firm pop up under the sponsored links section on the right-hand column of a search engine versus what comes up in the main search results. Yet most studies say 85 percent or more of the clicks on a search engine results page occur in the main search results, Baggott said.

"We create very narrow pages focused specifically on only one topic or keyword. ... You can't buy your way there," Baggott added.

He and Sales formed the company with $225,000 from local angel investors. They later received another $2.5 million from investors, including Bob Compton, who'd also helped fund ExactTarget and Aprimo Inc., a local company that makes enterprise marketing management software.

The companies have made Indianapolis an emerging leader in an Internet niche that, though it has potential nationwide, is somewhat overshadowed locally.

"For all the talk about BioCrossroads," he said of the initiative to boost the region's life sciences industry, "we're the Internet marketing capital of the world."

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