Maxpoint Interactive has raised its first round of funding of $3 million from, Silicon Valley investor, Trinity Ventures.  The company aims to expand the company product line,  and address the demands of customers for its propriety neighborhood-level targeting technology, called Digital Zip.

The technology is used for increasing in-store sales nationwide, for online advertiser brands, which include leading CPG brand retailers in multiple categories:  financial service organizations, auto manufacturers and pharmaceutical, to name a few. Maxpoint targets the best neighborhood in the US for a specific brand, offering localized marketing delivery,” said Joe Epperson, CEO and co-founder of MaxPoint Interactive.

“Research has shown that over one quarter of online display ads are currently delivered outside the radius of a local store location. This means that national brands and retailers are wasting a large portion of their online advertising budgets, as these impressions are not driving in-store sales. By introducing increased geographic and data set precision into the ad targeting process, we can deliver neighborhood-level targeting on a national scale, empowering brand marketers to focus their ad spend on their prime target consumers living within the radius of the store.”

Maxpoint is an early participant of neighborhood-level, online ad targeting, with two proprietary data-driven technologies to compel in-store purchases for national and local brands. The company identifies the best prospect customers for any brand using a Customized Consumer Profile, which is a combination of multiple sets of data. The data sources are from 65,000 retail store’s point-of-sale statistics, demographics, psychographics and other publicly available data sources minus personally identifiable information. According to Gus Tai, General Partner with Trinity Ventures:

“Today, buying online advertising is a broken promise for retailers and brand marketers who are used to tracking advertising spends against true offline purchases. We believe that MaxPoint has the technology, the passion and the management team to deliver the information that retailers and brand marketers are craving – how online advertising drives offline purchases. This is not accomplished with impressions, clicks or ‘virality,’ but actual dollars. We believe that the real market opportunity isn’t just optimizing online advertising; it’s optimizing the entire advertising industry, including all the offline advertising, from FSIs, fliers and television advertising, which will eventually move online.”

Digital Zip already has an extensive reach, spanning 34,000 distinct neighborhoods, each with approximately 3,400 households that enables to it to target a specific location within a retailer’s trade area.  It only delivers campaigns that match demand for a specific product, without the use of cookies.

This is the latest in funding around a hyper-local ad delivery tool, as support for this type of brand targeting is something that’s useful to both consumers and brands.  The interesting thing about this hyper-localization is that several different types of apps can layer in this type of targeting functionality.  One industry that’s been working at this is real estate, with sites like Zillow building out neighborhood-based networks and internal advertising capabilities.  Zillow recently named a new CEO, with long-term goals to further develop its hyper-localization.