NebuAd CEO Out in Wake of Setbacks, as Firm Lowers Sights

  |  September 3, 2008   |  Comments

Behavioral ad player plans to focus on traditional behavioral targeting, but has not given up on serving ISPs.

NebuAd CEO Bob Dykes has stepped down in the wake of the company's recent setbacks in Congress and the loss of numerous ISP clients.

Additionally, the company said in a statement that it would explore "conventional" media channels, a tacit acknowledgement that the demand for its services from Internet service providers has dried up. While NebuAd says it hasn't given up on serving the ISP market, the company is now likely to put resources into aggregating inventory and behavioral data from Web sites in a manner similar to established players like Tacoda, Revenue Science and AlmondNet.

NebuAd President Kira Makagon was promoted to lead the company. Meanwhile Dykes will remain chairman and take an executive post with VeriFone as chief financial officer.

In a statement issued yesterday, the company said it will be "broadening its market via more conventional media channels and means."

However it added, "Servicing Internet service providers remains a priority of NebuAd, and we are enhancing our technologies in that area."

How it hopes to still serve the ISP market is not clear, though the company may seek to develop a user tracking and delivery mechanism based on subscriber opt-ins. The vast majority, if not all, of its ISP partners to date have taken an opt-out approach -- one of the main points of disapproval expressed by Congress people and privacy advocates. In House testimony, Dykes indicated that requiring an opt-in would severely limit the reach of NebuAd's system.

One thing working in NebuAd's favor is that the company still has money to burn, having secured a series B $30 million round of funding late last year.

With Dykes's departure, NebuAd enters a new chapter in its brief and so-far unhappy existence. Since first presenting itself in 2007 as a means by which Internet service providers can tap into the fortunes being made in Web advertising, the company quickly drew scrutiny for its privacy practices.

After expressing concern over those practices in privacy hearings this summer, a House Energy and Commerce subcommittee directed questions to almost 30 Internet service providers about their use of technologies that track and target ads to subscribers.

In response letters that were posted to the House of Representatives Web site, most of those firms said they haven't tested such targeting methods. The others -- including NebuAd partners Charter Communications, CenturyTel, and Wide Open West -- told the subcommittee they'd discontinued or decided not to implement the methods after a trial.


Zachary Rodgers

Until March 2012, Zach Rodgers was managing editor of ClickZ's award-winning coverage of news and trends in digital marketing. He reported on the rise of web companies, data markets, ad technologies, and government Internet policy, among other subjects. 

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