VentureBeat

AdBrite, a company that calls itself, “the internet’s ad marketplace,” already lets advertisers and publishers find each other directly through its site. Today, Adbrite is claiming to go further than other online ad services in matching an advertiser’s ad with a web publisher’s audience. It is launching a new service, called OTX, that lets third-party ad-targeting companies compete to serve the most relevant ads on publisher’s sites.

Third party targeting companies access Adbrite’s advertisement system via a live application programming interface, and bid for publishers. AdBrite is working with two ad-targeting companies to begin with: Personifi and Lucid Media (formerly Entrieva).

Many ad networks have their own, proprietary matching algorithms in place. San Francisco-based AdBrite’s hope is that its blend will serve more relevant ads, that lead to more click-throughs and so more revenue for publishers, its targeting partners, itself, and — assuming a site’s visitors care about its ads at the end of the day — advertisers.

There are many, many competing ad services that hope to optimize ads for sites. Most recently, we’ve covered the Rubicon Project, which just launched a program where it uses its own technology (and manual decision-making) to determine if a site is “high-quality.” Once certified by Rubicon, a site can run ads from multiple ad networks through Rubicon, with advertisers knowing — it hopes — that their ads reach the right audience.

AdBrite is a mid-sized competitor,with its ads reaching 85 million unique users in the U.S, according to web analytics service comScore.

We were headed over to AdBrite’s offices to chat with founder Philip Kaplan earlier today, when the news got out that the ad network had raised a $23 million round of funding (our coverage).

Kaplan has been involved with a number of companies going back as far as the last dot-com bubble, and besides AdBrite is best known for a site called FuckedCompany, that covered the demise of many startups in that era.

The San Francisco company traces its origins back to 2002, when it offered a primitive way for web site publishers to find advertisers through “your ad here” buttons they could put on their sites. More from Kaplan, below:

VentureBeat: Why did you start AdBrite?

Philip Kaplan: I was running a number of different content-based websites, and found that there was no automated way to sell ad space to my visitors. AdBrite was originally built to be a solution to this problem, and has grown into an ad marketplace with more than 50,000 websites.

VB: Why did you raise this round?

PK:  Funds will be used to increase capacity, improve targeting quality, develop new ventures, and provide international expansion.

VB: Why did you go with a hedge fund like Artis?

PK: Artis was an investor from our Series B, and all of our previous investors (including Sequoia and Artis) participated in this round of Series C funding. We choose investors based on their experience, the value and relationships they bring, their reputation, and other criteria.

VB: What sets AdBrite apart from the rest?

PK: For publishers, AdBrite provides more ways to monetize than any other ad network. In addition to text ads and banner ads, AdBrite can display full page ads, inline ads, ads in videos (InVideo), and ads in images (BritePic). Furthermore, AdBrite allows publishers to submit ad code from another ad network (such as Google AdSense) and a “reserve price,” and we will only show AdBrite ads when we can beat that reserve price.

For advertisers: AdBrite reaches 39% of all US Internet visitors (Comscore’s October number). Comscore lists us as the 3rd largest ad network in terms of pageviews, behind Advertising.com and Google. We allow targeting by geography, demographic, category, and contextual relevance. We offer a high level of transparency and control, even showing advertisers each website on which their ads have ever appeared, and allowing them to remove or edit their bids on each site.

For other ad networks: AdBrite provides a simple and fast way for other ad networks to increase their scale & reach, by allowing them to run their ads within AdBrite’s network of publishers – over 1 billion pageviews per day.

VB: You told me earlier your platform was like the Rubicon Project, a site that lets publishers selects ads from ad networks that offer the most money. Can you talk about this a bit?

PK: We run an auction for every single pageview, ensuring the highest yield to our publishers. Only an ad network like AdBrite can do this, because an outside party wouldn’t have enough data. Furthermore, AdBrite’s “reserve price” feature which I mentioned before further ensures the highest payout to publishers, with regards to competing networks. Finally, it seems that a publisher could use their Rubicon Project code as their AdBrite reserve price network, if they wanted to.

(Photo courtesy of Mai Le’s Flickr account.)

Updated. And, read our Q&A with AdBrite cofounder Philip Kaplan here.

Online advertising company AdBrite has raised $23 million in a third round of funding from investors led by DAG Ventures and including Sequoia Capital, Mitsui Ventures, and hedge fund Artis Management.

The funding comes as an increasing number of companies are building ad networks, lured by the lucrative buyouts of such companies of late. Microsoft, Yahoo, Google and others are shelling out billions for the best of them. Originally, Adbrite’s specialty was to provide publishers with an ad opening on their page with a simple sentence like “Advertise here for $1,000″ Advertisers, seeing the space, could then call then sign up to advertise there — cutting out the middlemen.

It has since expanded its offerings, to keep up with the fast-moving industry. The company, based in San Francisco, now offers an ad auction system, a full-page ad feature, a branded video player, and playful offerings such as an easy way for regular people to insert ads into online photos. Many of the ideas are masterminded by founder Philip Kaplan, who previously started the gossip site FuckedCompany.com as a forum for dot-come company employees to trade information about layoffs and other bad news during the bursting of the Internet bubble after 2000.

Kaplan says that it’s the third largest ad network, behind Google and Advertising.com, with over one billion page views a day across a network of 50,000 publishers. He says that AdBrite will use the funds to accelerate growth and expand the network’s targeting capabilities, including behavioral targeting.

The latest investment also continues the special relationship between one of Silicon Valley’s top venture firms, Sequoia, and Artis, where a son of one of Sequoia’s partners, Pierre Lamond has worked. The two also backed YouTube together, and several others.

The company previously raised $12 million over the past three years.

We’ll have more shortly (within the hour), but wanted to publish this news immediately since it is beginning to leak out elsewhere.

[Updated: AdBrite has confirmed the funding took place and that DAG Ventures led the round. There were rumors that the deal hadn't yet closed.]

Advertising start-up AdBrite has launched an elegant way to put ads on digital photos, a potentially revolutionary way for photographers to make money.

The feature, called BritePic, was released five days ago, and 144,000 pictures have already been uploaded to AdBrite’s system to claim it, co-founder Philip Kaplan tells VentureBeat.

BritePic uses software to implant ad code directly into digital photos, and provides a host of other nifty tricks that will make the photographer’s trade easier, and more creative. It lets them insert watermarks, add captions, and more. Until now, most photographers have a difficult time tracking where their photos are used — not to mention demanding payment for them when there is so much ripping off going and when much art if for free anyway. This way, photographers get more money the more times it is viewed, even on other sites. For every dollar an advertiser pays for an ad on the photos, AdBrite keeps 30 cents, the photographer gets 70 cents. Adbrite tracks the views, and bills the advertiser accordingly.

Scroll over the photo below to see how the ad pops up.

Judging from the reception so far, people are digging it, said Kaplan, who built the feature. He said 61,000 photos were loaded yesterday to claim the feature. Today, by mid-day 50,000 photos were uploaded. Kaplan has a creative gene — he was founder of Fuckedcompany, a site that chronicled the hardships of the dot-coms after the burst of the Internet bubble.

Until now, the format for embedding images into a web page uses a simple code definer. AdBrite’s BritePic lets you adds more code that you can play around with to customize. Here’s how it works: You register at BritePic, upload a picture, give it tags (so that AdBrite knows what sort of advertising to seek for your photo from its advertising clients), and then answer a few questions. Do you want to add a watermark? Do you want to show the advertising? How big do you want the photo? BritePic generates some code, based on your answers. It then gives you a preview of what the photo looks like. If you want, you can change the code by hand, to resize the photo, change caption, etc. It gives you a visual dashboard (see below), so that this is easy to do.

BritePic code also includes Flash player to show the image with the additional features. Check out the menu in the bottom left of the image above, which includes code needed to embed the photo elsewhere, a zoom to get a closer look at the photo, etc. Techcrunch had an early review of BritePic here.

BritePic doesn’t host image files, so you’ll need to give it a URL where it can pull your photo from. If you’re using photos for a Wordpress blog, you’ll need to tinker with the code slightly (Kaplan says BritePic will be posting such instructions shortly).

What’s remarkable is that this hasn’t been done before. Kaplan said the company worked for seven months on a video feature that is similar to this, which you can also find on the site. However, he then realized the photo version would be more popular. The number of images dwarfs the number of videos on the web.

Kaplan said it is almost like a digital rights management (DRM). Sure, techies can get around the ad code (they can view source code and revert to original html), but they’re unlikely to bother, he said. The feature encourages distribution.