Tacoda Set to Launch Behavioral Ad Network

Tacoda Systems is set to launch its behaviorally targeted ad network, dubbed AudienceMatch Network (AMN), as ClickZ first reported in April.

The pay-for-performance network of content sites will run text ads targeted by Tacoda’s audience-profiling technology. AMN simultaneously challenges, mirrors and augments paid search and contextual ad programs from companies like Google and Overture.

“Our target will be the large existing users of paid search,” affirms Tacoda CEO Dave Morgan. He believes the network will attract heavy paid search advertisers both because of their success with contextual search advertising and a growing shortage of search inventory.

Ads served through AMN can target users anywhere on participating sites, making it possible for publishers to charge higher rates for run-of-site positions. Ads are sold in a self-serve auction market, modeled after paid search. Revenues are split between Tacoda and participating sites, taking into account factors such as who sold the ad, where it runs, and which audience segments it targets.

AMN, already tested by some sites in Tacoda’s existing network of 2,700 sites, now begins a two-month launch phase comprised of approximately 50 sites and 100 to 150 advertisers. It will ramp up to about 1,000 sites and advertisers, respectively, at the end of that period.

Ads are served into “Offer Inbox” units on network sites’ pages. Tacoda is taking great pains to underscore the steps it’s taken to preserve both consumer privacy and publisher data ownership. Consumers who click the ad unit will see an explanation the ad was served based on their surfing behavior. An immediate opt-out option will be provided.

On the publisher side, Morgan says “matching data, not sharing it” between participating publishers was the biggest technological challenge. “It protects both publishers and consumers and their data. That technology did not exist when some of the earlier failed efforts occurred in this space,” he observed.

Tacoda wouldn’t name the publishers or advertisers participating in AMN’s launch phase. Morgan says the initial advertisers are largely from sectors including personal and consumer finance; technology; small business services and homeowner services.

Results will likely be available by year’s end, says the company. “Since this is the first of it’s kind, we have to prove it,” Morgan said, “We’ll probably be a little more open with what doesn’t work as with what does work.”

Expected enhancements to the service in 2005 include a degree of ad customization, just as contextual search ads have evolved to allow user-configured colors and fonts. More variables in segmentation and increased targeting options are also planned, said Morgan.

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