All-Stars Launch Behavioral Exchange, of Sorts

Behavioral targeting in 2007 was so cut and dried.

Established firms like Tacoda and Revenue Science had steadily grown their reach by bundling audience segments across sites. Buying from them was just a matter of cherry picking your preferred segment and paying the agreed upon price. Then things got all complicated.

First there was NebuAd, which brought with it the prospect of intensive tracking of consumers’ activities through their Internet service providers. That didn’t work out so well, as Congress pounced and ISPs hurriedly scrapped their relationships with the firm (though the ultimate fate of NebuAd and others like it remains to be seen).

Now, hot on the heels of that flame-out, several behavioral targeting and ad technology vets have banded together to try yet another potentially disruptive behavioral targeting approach. But this crew is taking a decidedly more delicate approach.

Seattle-based BlueKai aims to allow advertisers, Web sites and ad networks to buy and sell shopping and purchase-related behaviors. Those behaviors are collected and sold by Web sites in the usual fashion. The twist is the data need not be linked to individual media impressions. In other words, you buy the cookie — not the banner.

The firm was founded by former execs from Right Media, Revenue Science, Yahoo, and DoubleClick’s long-defunct media business. But BlueKai is not an ad network. Rather, it refers to itself as a “polite” data exchange.

“We’re not in the ad market in the sense that we don’t sell ads, we don’t have a sales force, and we don’t have an ad server,” said CEO Omar Tawakol. “We get out of the way.”

Sellers include major sites in the auto, travel, and retail categories, who gain a revenue share whenever their data are sold in the exchange. Among its more than two-dozen partners are Autobytel and video ad network Tremor. These publishers and ad networks can broker bits of consumer interest — for instance, that a given user has conducted research on Toyota hybrids.

“You pay per unique user, per month. If you say you want Toyota Prius people, put in a bid,” he added. “It’s exactly like the list model in the offline world.”

The BlueKai platform has extensive privacy controls. The firm will allow consumers not only to delete their cookies, as is required by the Network Advertising Initiative — a behavioral targeting association — but it also places tight restrictions on how buyers can use the data they acquire through its system. For instance, reselling data is strictly forbidden, and any behavioral data purchased through the system expire after one month.

From the end user’s point of view, BlueKai has engineered an interface whereby individual Web surfers can log on to edit their behavioral profile. They can add or remove data to their profile, and can opt-out of cookie tracking entirely — though it should be noted this mechanism itself is cookie-based, so deleting cookies at any point will cause them to be opted in again.

“We didn’t want consumers just to be able to opt out,” said Tawakol. “We want users to be able to look at the cookie and see what’s there, to be able to edit and control it.”

He acknowledges marketers and consumers may not be ready for that level of control, but insists it’s all part of a 10-year vision for behavioral advertising.

“Data should be a first-party asset, like where you invest your money,” he said. “The industry’s not ready for that yet. We’re getting it going in giving them controls and transparency and rewards.”

Prior to founding Bluekai, Tawakol was with Revenue Science — first as CMO and GM of its publisher business, and later as GM of its ad network. He left about two years ago at the same time a number of other execs departed.

Bluekai has 11 employees and is based in Seattle. It’s backed by Redpoint Ventures.

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