Signpost, the AdSense for local business, raises $3.75M

As local businesses move their marketing spending from Yellow Page listings and mailers to online ads, there’s a growing opportunity to help them make the transition. Signpost, a New York start-up, has been growing quickly by filling this gap for local merchants.  Investors are noticing too including Spark Capital, which is leading a $3.75 million Series A round in the three-year-old company.

Signpost works by giving local businesses a customized online marketing campaign that is designed to help them drive more sales and gain repeat customers. The company works with more than 1,200 publishers such as Google Offers (s goog), EveryDay Health and AOL Patch (s aol) and places ads and deals on the sites that can be tracked back to clicks and purchases. The company has tried to position itself as an AdSense for local commerce with its one-stop shop approach.

In addition to the money, Signpost has also picked up Christopher DePatria, former head of sales at AOL’s Patch, to be the company’s new VP of revenue. The company, which previously raised $1 million from  Google Ventures, Spark Capital and angel investors, is planning to continue building out its tech and sales team and expects to grow from its 24 people to about 40 employees with this latest funding.

Stuart Wall, Signpost’s CEO and founder said the company is a good fit for many local businesses, who often spend money on building general awareness on local websites. Signpost works to connect its marketing with measurable actions, with an eye toward ultimately drawing in high quality customers. While it does work with daily deal companies, it tries to find discounts and offers that a company can afford to provide. For 94 percent of Signpost customers, they’re getting better cost per impression, cost per action and cost per clicks than Yelp (s yelp), Google and Facebook on a monthly basis, said Wall. Even with a $99 a monthly fee, 93 percent of clients renew each month.

“The idea is you get the benefit of working with every platform we have and we optimize things for you and we’ll focus on your online marketing campaigns,” Wall told me in an interview.

Signpost has a good bead on this market. Local businesses are looking to tap online marketing but they’re often not very savvy about how to go about it. Taking care of the marketing work and finding the right channels to advertise on solves a lot of headaches for merchants, who are getting increasingly inundated by salesmen looking to get them to advertise or offer deals through their services. I like that they’re not always pushing big discounts and Wall agrees that’s not necessary for many businesses. It’s more about finding the particular needs of a merchants and then seeing what they can afford to spend. And it all leads back to real results.  That sounds like a service that’s got plenty of appeal for local businesses.

Image courtesy of Flickr user Neal Dench.