Wednesday, January 5, 2011

Tech Watch

Innerscope builds out its space, client base and offerings

By Rodney H. Brown

Innerscope Research Inc. has set up a new lab at the edge of the North End with the goal of helping everything you interact with work more effectively — from print ads to movies to smartphone interfaces.

The company, which was launched in 2006, is doing so using hard science based on biometric analysis of your involuntary reactions to the things you see or interact with.
Innerscope has been refining its technology since it launched in a small space on tony Newbury Street, when it required test subjects to wear a sensor-laden vest that covered the entire torso and was wired to the computer recording the data. The company drew attention in 2009 when it used its technology to test viewers’ biometric responses to Super Bowl ads.

While moving into its new space at 98 North Washington St. in Boston in the summer of 2009 and planning to take over most of its floor for its dedicated testing lab, Innerscope also refined its sensor technology, according to co-founder, CEO and chief science officer Carl Marci.

Now the user simply puts a sensor-laden black elastic strap around his or her torso under a shirt. The strap has an Iron Man-like chest piece in the center that is the data collection point and transmits the data wirelessly via Bluetooth to the computers in the lab for analysis, and for viewing in real time.

That allows Innerscope to set up testing spaces like its 30-seat theater experience space, which has Bluetooth antennas arrayed on the ceiling, allowing them to catch all of the data coming from the test subjects who may be looking at an early cut of the latest blockbuster movie. “We always had an eye on the additional space so that we could have our own dedicated testing space,” Marci said.

Moving into new space wasn’t the only big step for Innerscope. The company opened an office in Los Angeles in September, tapping Bill Stephenson, a veteran of ratings data company Nielsen, to run the office. That helped give them a closer connection to one sector that has become key to Innerscope’s rapid growth — television advertising.

Michael Orgera and Bruce K. Rosenblum are executives with Warner Bros. Media Research and Insights, and have been utilizing Innerscope for a few years now in conjunction with their own research lab at the Warner Bros. studio lot in Burbank, Calif.

Warner Bros. is using Innerscope to test the audience response to integrating brand messages directly into such talk shows as “The Ellen Degeneres Show.” They want to make sure the advertisers’ products get noticed — such as when Ellen danced to a Microsoft Corp. Kinect game system using the Harmonix Music Systems game “Dance Central” — without it seeming like an actual ad.

“Sometimes marketers use a very contrived language to promote a product,” Orgera said. “It is like poison. People know they are being sold to and they tune it right out.”

Innerscope helps Warner Bros. determine where that line between brand awareness and overt advertising is by objectively showing audience reaction to such a brand placement. Even when they say they liked what they saw, if their galvanic skin response, heart rate and breathing say otherwise, Orgera knows that segment was heavy-handed.

“That’s what we like about Innerscope,” Rosenblum said. “Neuroscience can be really technical and really fuzzy, and they present us the data in a way that we understood it.”

That attention to making the kind of data seen in a psychology lab presentable to a lay customer has been one factor driving growth at Innerscope.

“Growth-wise, we are in the double and triple digits by quarter, year over year,” Marci said. “We are serving our existing client base with repeat projects. We have a retention rate of 80 percent for our clients, and we have a large base of new clients.”

Innerscope is even trying to help the advertising industry, as a whole, improve its messaging and interactivity. According to William Cook, executive vice president at the New York-based Advertising Research Foundation, Innerscope is one of a handful of companies working on a research project for the foundation.

“Part of what people are trying to do here is to really understand, what are some of the things that look really artistic but actually draw people away from the message?”
Cook said. “Part of this is to enrich the dialogue, ‘What’s realistic these days for an ad to accomplish and how do you create an ad to do that?’”

Innerscope, which took an expanded $4 million round of equity financing in 2008 and a $2.5 million round in December 2009, now has about 40 employees, Marci said.

But massive growth in staff size isn’t in the plans, because the new space has made it unnecessary for a while. “That means we as a company can be more efficient. But part of the efficiency we have gained is that we are getting to do more with the same people that we have.”

Which isn’t to say that Innerscope isn’t seeking further funding to speed up its already rapid growth.

“We’re exploring both strategic partnerships as well as beginning to have conversations with new VCs, and they are not mutually exclusive,” Marci said. “We are also actively talking to international partners — all of them are on the table.”