Embroiled in the Google sponsored-post debacle, Unruly raises $25M (exclusive)

A five year-old company that seeks to deliver “awesome social video campaigns” finds itself embroiled in a hairy Internet pickle on a day that would have otherwise been ripe for celebration.

Unruly Media, a video promotion company, has announced that its raised $25 million in its first institutional round of funding. The news comes just one day after a fishy Google Chrome sponsored-post campaign, fielded by Unruly, came to the web’s attention and stained the company’s reputation.

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Founded in 2006, Unruly Media makes a proprietary video platform for branded social video campaign management and distribution. The platform transcodes video content into a variety of formats, pipes out videos to more than 11,000 media partners, and then tracks performance and conversations generated on YouTube, Facebook, Twitter and other social sites.

The company has been behind the distribution of some of the web’s most memorable viral video campaigns. Evian’s “Roller Babies” campaign, Old Spice’s “Man Your Man Could Smell Like” campaign and Coca Cola’s “Happiness Factory” series, for instance, all used Unruly for video placement. Unruly has anywhere from 100 to 120 content campaigns live at any one time, and is said to reach 725 million viewers per month.

“We don’t need to do a round,” Unruly CEO Scott Button told VentureBeat in an exclusive interview. “We’ve been profitable for three years … but we thought [raising money] would be useful to accelerate international expansion.”

Unruly currently has a revenue run-rate of $50 million, and employs 100 people in nine offices around the world, including London, New York, San Francisco and Paris. In 2012, Unruly plans to hire aggressively, open additional offices and double its size by year’s end.

As to the scathing allegation (dissected by Danny Sullivan at Search Engine Land) that Unruly helped Google buy links to increase the search ranking of Chrome — a practice Google frowns upon and penalizes — Button said that it all comes down to a misunderstanding of the company’s business.

“We’re about increasing brand awareness,” he said. “We don’t ask bloggers ever to link to advertisers … [brands] don’t come to use to improve search engine rankings.”

Unruly, he explained, has relationships with niche and influential bloggers. These bloggers get paid to embed videos and deliver views against a campaign, but they’re not told to write about the content (if they do, that’s of their own volition, Button said). And, he insisted, that the company has clear policies on sponsorship disclosures, and works to ensure that the sponsored posts do not (intentionally) distort search engine rankings. “It’s very, very virtuous,” he said.

In the Chrome instance, however, Google has said that it did not condone or request the sponsored-post campaign. “Google never agreed to anything more than online ads,” a spokesperson said Tuesday. “We have consistently avoided paid sponsorships, including paying bloggers to promote our products, because these kind of promotions are not transparent or in the best interests of users.”

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Unruly, Button said, worked directly with digital media agency Essence Digital on the Chrome social video campaign. In a statement posted to Google+ Tuesday, Essence avoided taking full responsibility for the bungled sponsored-post campaign, but made it clear that Google was not to blame. “Google were subjected to this activity through media that encouraged bloggers to create what appeared to be paid posts, were often of poor quality and out of line with Google standards. We apologize to Google who clearly didn’t authorize this,” the company said.

But the question of who’s to blame may not matter (Button admitted partial responsibility for “crossed wires” and miscommunication between the three parties). The incident has unquestionably put a damper on Unruly’s sizable funding announcement.

Unruly’s $25 million round was led by Amadeus Capital Partners and Van den Ende & Deitmers, and included participation from Business Growth Fund. Additional terms of the deal were not disclosed.