LocalResponse raises $5 million for check-in based ads

LocalResponse, a local marketing system that pushes targeted ads to users based on their check-ins, has raised $5 million. The new funding comes from Cava Capital, Vodafone Ventures, (s vod) Advancit Capital, and Progress Ventures, who join existing investors Metamorphic Ventures, Extreme Venture Partners, FF Ventures and Acadia Woods Partners.

The money will go toward expanding the sales team and building out an enterprise version of the service for brands and agencies. I’ve written about LocalResponse a couple of times, and I like what they’re doing. They take the explicit check-ins that people do on Foursquare, Loopt, Facebook, SCVNGR and Gowalla and combine that with implicit location data that people might share on social sites like Twitter or Instagram. They then allow merchants and retailers to push out marketing messages or deals through Twitter that are relevant to those users and their location.

The company has seen strong results with its platform, helping push click-through rates (CTR), new followers and foot traffic. LocalResponse said its ads have a 40 percent CTR, over 100 times the CTR on current online and mobile advertisements. In August, the company bought social TV check-in service Philo to start targeting TV viewers with ads based on what they’re watching. LocalResponse now has some big customers in General  Motors, (s gm)  Walgreens, (s wag) Microsoft, (s msft) McDonald’s, (s mcd) USA Networks, (s cmcsa)(s ge) Aveda, (s el) Coca-Cola (s ko) and Verizon. (s vz)

LocalResponse has had some good success with Twitter ads and is showing it can be effective building off the Twitter platform. Provided it doesn’t get hassled by Twitter, LocalResponse seems to have proven how to push out relevant ads to people that catch their attention in the right context. Some might fight this intrusive, but the high CTR suggests many don’t have a problem with seeing relevant messages based on where they are and what they’re doing.

“End users love the platform; they’re clicking on messages, retweeting and sharing them. We haven’t necessarily cracked the code but we’re definitely adding relevance to users over Twitter,” said CEO and Co-Founder Nihal Mehta.