DOWNTOWN — Unlike its advertising, GumGum's placement is somewhat random.
Ophir Tanz, CEO of the online advertising platform, started the company in 2007 in Santa Monica because his buddy's company had some extra space on the sixth floor of the Clock Tower building and let him stay for free.
In September, GumGum signed a five-year office lease valued at $1.35 million for that entire floor. Tanz has jumped around a lot as his company grew from two employees to 70 (with 35 in Santa Monica) but he's always kept the core in the city by the sea.
"There's no real good reason," he said. "It should be in New York; 65 percent of our revenue comes out of New York City. L.A.'s very meaningful for automotive and entertainment but it's rare that a company like ours is not based out of (Silicon) Valley or New York City."
GumGum has six other offices catering to the biggest brands in the world.
Tanz is a pioneer in the world of in-image web advertising. It's much easier for brands to align their ads with words: If you're selling clothing, run banner ads on pages that mention "runway" or "scarf" for instance.
But images make up about a third of web content and figuring out what's going on in the picture is hard for a computer.
GumGum built an algorithm that understands. A mascara ad runs along the bottom of a picture of a model with distinct eyelashes. At the bottom of a landscape photograph is an ad for a new Canon camera. GumGum provides data that shows that more people look at and click on their ads.
They're growing fast, Tanz said. They've hired 22 people since December.
"I think the market finally caught up with us," he said. "I think we've been ahead of the market in terms of what we've accomplished and I think the market forces are now there such that we're aligned and it's grown the business. We invented something new that nobody knew how to place and now people can place it better."
Recently, news about growing businesses and office space focus on companies leaving Santa Monica. Sony's gaming division, Imax, and RiotGames, makers of one of the world's most popular video games, all announced they were leaving the bay city in the last six months. The city is facing an office space shortage.
It's not the brands that keep Tanz here.
"I was at Adidas yesterday, and that was close by, and that's rare," he said. "Our clients are all around the world and the country so there's no benefit to that. But there's no benefit to being anywhere because they're all over."
He often goes to New York City for a month at a time.
Silicon Beach is convenient for the ancillary business that it draws, he said. He can go to meetings with venture capitalists and lawyers without getting the car.
But the real reason Tanz has stayed through the hikes in rents, he said, is because his employees love it.
"Even moving up like 15 blocks, where it's much more affordable in this great space, you just don't have the walking options that you do here," he said. "Like the eating options and the whole social sort of beachy thing."
The GumGum Santa Monica employees walk to the beach everyday at 3:30 p.m.
While Tanz says that "GumGum's meant to be in Santa Monica" he wound up here on accident.
"It was not as much of a scene," he said. "It was total serendipity because I wouldn't have built the company here otherwise. Maybe I would have eventually moved down here because of what's happening, but it was a total chance that I ended up down here."
dave@www.smdp.com
