“It’s an awesome thing when you’re trying to target a certain person for a certain thing,” Kulpa said. “An example is a client looking to target a woman in the 18-22 age group, single, churchgoer — we can place an ad specifically targeted to that demographic on a sidebar on her Facebook page and other social media.”

The name Underground Elephant derives from ‘elephant’ for the memory part and ‘underground’ for the behind the scenes sales funnel, Kulpa said. Underground specializes in what Kulpa refers to as “life decisions” that are made on the Internet such as where to go to school, insurance — things you want to compare and make an informed decision regarding.

“We were one of the first to market in the social media space and now it’s really hot,” Kulpa said. “Facebook gives a clear picture of what a highly targeted customer is looking for and the result is that the product offerings got a lot better.”

Kulpa said that Facebook needs to change as social media is “starting to become ‘uncool.’” He thinks that Facebook is well aware of what the trends are in social media; “that’s why they just paid a billion dollars for Instagram Inc.” He doesn’t see the future in mobile advertising yet, commenting that no one has figured out how to effectively market on mobile.

“But they will,” Kulpa said.

40 Percent Growth

Formerly ranked at No. 1, Digitaria Interactive Inc., is now No. 3 on the list, and reported a 26 percent increase in revenue from 2010 to 2011. The 2011 revenue figure was approximated by the Journal based on an April issue of Advertising Age.

Daniel Khabie, CEO, says that 2012 is tracking on a 40 percent growth from 2011.

“The major component of our growth is our focus on verticals,” Khabie said. “The company is diversified in verticals such as professional services, the health and wellness space, social marketing/digital, and product development.”

Digitaria was purchased by JWT in 2010, which in turn is owned by the holding company WPP out of the U.K. JWT is one of the world’s largest advertising firms. However, Digitaria operates as an independent agency, Khabie clarified.

Digitaria, whose name comes from a previously undiscovered star which was unknown because its light was reflected on another star making it shine more brightly, was founded in San Diego in 1997. Digitaria merged with Console, a technology company, in 2006.