VentureBeat

This may well be the year that the leaders in the mobile advertising space emerge, and startup Ad Infuse has taken on another $12 million to try to ensure its place at the table.

As we reported in an October story, Ad Infuse is distinguished by its focus on targeted user data. Stats like age, gender and geographical location are used to determine the best ad to serve to any particular mobile user, a method the company says will greatly boost CPMs (the amount paid per thousand views of an ad).

That data had better prove to be a meaningful differentiator for Ad Infuse as the mobile ad space heats up. AdMob, which experienced excellent growth in 2007, gets by with barely any targeting, but has served up stunningly high volumes — over 15 billion impressions to date, according to the counter on its webpage.

Ad Infuse can’t compare in terms of raw numbers, but hopes it can sell highly targeted audiences to large advertisers like Unilever, which teamed up with the company to run ads for Axe Body Spray to young males late last year. Part of the latest round of funding will go to bulking up Ad Infuse’s sales team, who will help foster more such partnerships.

CEO Brian Cowley gave us some statistics during an interview: Ad Infuse roughly doubled the number of partnerships and advertisers it had during the fourth quarter of last year, as well as boosting revenues 325 percent and doubling average CPMs to $20, and appears to be continuing its growth in the current quarter.

Even with a positive growth story, the future is still looking uncertain for Ad Infuse — as well as AdMob, AOL Third Screen Media, Google, and newer startups like Smaato, which just took a $3.5 million round of its own. However, the dust should begin to clear by the end of this year, and let us see who the likely survivors are.

The $12 million funding was provided by SoftBank Capital, and previous investors ComVentures (now Velocity Interactive Group) and Storm Ventures also participated. Ad Infuse has taken a total of $17.5 million to date, including its seed round.

Ad Infuse is ready to serve you targeted ads on your cellphone — and may surprise you with how much it knows.

The company can pinpoint a user’s age, gender, income level, and location, among other things. Advertisers pay handsomely for such information, sometimes more than the going rates for banner ads on the internet.

In their race to become early winners, companies like AdMob (our coverage) and Third Screen Media have also been working on their targeting strategies. But they have been focusing more on getting advertisers and carriers on board to develop the market, where Ad Infuse is preoccupied only with targeting.

Ad Infuse works by taking its data directly from carriers, who are happy to provide the customer information they have on hand for use in advertising, provided they receive a cut of the profits. That leaves less of an element of black magic to targeting than on the web. See our coverage on NebuAd to understand — no need for deep packet inspection here.

Although other companies could copy its method, Ad Infuse is keeping other tricks up its sleeve to help differentiate itself from AdMob, which already claims to show 1.5 billion mobile ads each month.

One such trick is Ad Infuse’s proprietary method for figuring out information about users on group plans or pre-paid phones, who generally don’t have to tell the carriers about themselves.

Based on data about who the purchaser of a pre-paid phone is calling, Ad Infuse can infer who they probably are — for example, picking out a teenager or business man based on whether they’re calling other teenagers or business men. After a handful of calls are made, Ad Infuse can begin making assumptions. Other information could be picked up based on the carrier’s tracking of what websites a phone is browsing.

The company also does some broader market analysis on the likelihood of particular customer groups purchasing from advertisers, in an effort to lure uncertain companies to the medium. So far it’s partnered with advertisers like Infospace and the New Yorker magazine, and displays ads on operators including Helio and Swisscom (in Europe).

Will consumers balk at having their personal info being picked over? Founder Carl Ludwig thinks mobile users will be less sensitive about privacy issues on phones, which they presumably know and accept are under the complete control of the carriers.

The information Ad Infuse receives is made anonymous to the company through a “black box” placed with the carrier that strips out the most personal information, like names, and allows Ad Infuse to focus on matching particular demographics with ads.

Ad Infuse took its seed funding round in 2005, and another $5 million in June 2006, from Storm Ventures and Comm Ventures. It’s in the process of raising another round.