PaperG

Victor Wong, left, and Roger Lee started their advertising technology company, PaperG, less than two years ago in New Haven. Their client list has grown to more than 50 companies, including The Hearst Corp. and The Boston Globe. (MICHAEL MCANDREWS / THE HARTFORD COURANT / May 29, 2009)

In late 2007, just before the great American financial meltdown began in earnest, Victor Wong turned down a summer job at a major New York investment bank to fire up a tiny enterprise of his own.

For good measure, he dropped out of Yale, too.

The bank was Lehman Brothers. The start-up was PaperG, which Wong, now 22, founded with a friend, recent Harvard graduate Roger Lee.

Today, once golden Lehman Brothers is bankrupt and liquidating, a casualty of America's economic distress. PaperG, a tiny, largely unknown advertising technology firm, has raised two rounds of private investment, attracted a corps of well-connected advisers and struck deals with more than 50 companies, including The Hearst Corp., The Boston Globe and MTV's college media network.

PaperG's product — self-service advertising for websites — is one effort of many by companies trying to make sense of the fractured mass media ad market, formerly dominated by newspapers and TV. The company bills its Internet-based software as an easy-to-use, low-cost option for advertisers and publishers alike.

Most technology start-ups fail. But brains, capital and connections suggest promise for PaperG. And the six-person firm's impressive list of paying customers sets it apart from other start-ups. Wong and his colleagues hope they can convert the venture into a 1990s-style payoff.

"Go public or sell the company," he said in a recent interview at the PaperG offices, situated between an ice cream shop and an art gallery.

PaperG stands for "paper generation," a reference to the struggling industry in which the company has sought its first customers — newspapers. It may seem like a counterintuitive strategy, but there's a method to the madness.

"When you're looking for new opportunities, you want to find customers in pain," said Wong, a California native who started his first money-making Internet business, a video game review publication, at age 14. "They're willing to pay for a solution. That's the perfect time to jump in."

Newspapers live and die by the advertising they sell, and websites have taken away a lot of it, even as papers' own sites are attracting record numbers of visitors. But newspaper websites still generate far less revenue than their print versions. The guys at PaperG think their "Flyerboard" software can help draw new ad dollars to the Web.

Newspapers aren't PaperG's only target market, but PaperG chose them as a starting point based on their prominence within small, well-defined markets — towns and cities.

"They serve a local audience, and we have a solution for local advertising," Wong said.

The 'New Classifieds'

The idea is to create an electronic version of the local coffee shop cork board and attract paid ads from small local businesses, event promoters and individuals who might post fliers for free in public places instead of buying advertising.

Using an interface embedded in the Flyerboard area of a host website — basically an electronic bulletin board — the advertiser uploads an image of an existing ad and pays for it. It typically appears on the site within an hour, Wong said.

The bet is that a local rock band, for example, might be willing to pay to post an electronic version of a flier for an upcoming gig on a well-known local publication's website if the process is quick, painless and inexpensive.

National advertisers could also use separate Flyerboards to tailor ad campaigns for local markets, Wong said, noting that Disney, H&M and Nike have all posted ads using Flyerboard.

In theory, the advertiser benefits by gaining exposure to the publication's local audience without having to create a new advertisement from scratch. The publication benefits by attracting new advertisers, and without requiring the labor of the sales staff (though a sales staff can also use Flyerboard as a tool).

PaperG is developing a second software product that could automatically generate ads for local businesses using information about them already on the Web.

Said Wong, "This is the new classifieds."