Tacoda Systems is one month away from launching a new behaviorally targeted ad network aimed at attracting brand advertisers.
The new CPM-based ad network, called Tacoda Audience Networks, will complement Tacoda AudienceMatch Network, a pay per click text ad network it launched in November. The AudienceMatch network has enlisted "close to 1000 advertisers" in its first four months of operation, while tripling its number of publishers to more than 100.
"We're doing this because everything we see in the market tells us there will be enormous growth in brand advertising online," said Dave Morgan, chief executive of Tacoda. "The challenge we want to address for buyers is they want to do it better, simpler. There's a limited amount of quality inventory out there."
The launch of the network means Tacoda will be selling the same type of advertising, to potentially the same advertisers, as clients who use its technology. But Morgan downplayed the notion that Tacoda is competing with publishers. Instead he described the relationship as a partnership.
"Initially we weren't sure if this was a business we wanted to get into, but it was driven by publishers' unhappiness with brokers and advertisers' demand for more inventory," he said.
While advertisers can buy from Tacoda's PPC network via a self-serve Web interface, Tacoda Audience Networks will sell ads via a direct sales force. Though he wouldn't reveal the names of any of the publishers participating, Morgan noted that two-thirds of new network members also belong to the Online Publishers Association.
Morgan says that when the new network launches, it will offer advertisers the potential to reach 49 million people, or roughly 30 percent of the U.S. Internet-using population, on a monthly basis. Eventually, Tacoda hopes to expand that network to reach more than 85 million U.S. Internet users.
The new network will offer all standard Interactive Advertising Bureau (IAB) ad units. However it is unlikely to contain ads in text format, Morgan said.
Tacoda Audience Networks will use non-personally-identifiable information and declared interests to deliver branding messages using Tacoda's behavioral targeting technology, which clusters online consumers into anonymous segments such as "auto buyers," "technology enthusiasts," or "business travelers."
In addition to that behavioral targeting option, Tacoda also plans to roll out geo-targeting and demographic targeting features on the new network later in the year.
While he would not disclose exact projections, Morgan says Tacoda expects to bring on "less than 100" publishers to the new network in its first month of operation, with the goal of doubling that figure by the end of 2005.
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