Turn Announces Funding for Ad Exchange Platform

Turn Ad ExchangeYesterday, online ad exchange contender and Redwood City, California-based, Turn Inc., announced a new round of investment totaling $15 million.

Led by Focus Ventures and joined by Norwest Venture Partners (NVP), Trident Capital, and Shasta Venture, Turn has now received more than $37 million in equity investment since its inception – yet another signal that investors see the ad exchange space as growing importance in the years to come. Turn plans to use the latest round for building out its platform and expanding its sales teams as they continue to push ahead with clients – presumably the “national branded response advertisers” that have used or considered the exchange.

Turn tries to ride the fence with the phrase: “national branded response advertisers” – very direct response-focused in spite of the insertion of the word “brand.” …It’s all DR online, perhaps? That’s where the CEO seems to be guiding us. Competitors such as Google/DoubleClick, Yahoo!’s Right Media and ContextWeb’s ADSDAQ would likely agree.

In an article from Ad Week’s Brian Morrisey, Jim Barnett, Turn’s CEO and a former AltaVista executive, trumpets the importance of providing top performance for marketers across the rapidly fragmenting web. Barnett challenges Wenda Millard’s criticism of the ad network model by stating, “If Wenda thinks an advertiser is going to blindly spend $25 (CPM) on Martha Stewart because Martha has a nice brand, they’re hiding under the covers.”

Barnett thinks that the metrics-driven environment, popularized by ad networks, will dominate online advertising as not only direct response advertisers but the much-heralded and largely-absent-online, brand marketers continue to increase their spends.

In addition, he suggested that Turn offers flexibility to advertisers by enabling both contextual and behavioral targeting on the Turn ad exchange in tandem with knowledge of the advertisers’ goals creates a witch’s brew for successful online ad campaigns. And, all of this is done at Turn using a “flexible” CPM model after abandoning a CPA model.

Any way you cut it, we think it’s all CPA – as in: what are the advertiser’s goals that the exchange needs to hit to get happy customers and repeat business.

With over 93 million U.S. uniques in July 2008 according to ComScore Media Metrix, and a doubling in reach since March, Turn appears headed in the right direction.

In the Boardroom

Steve Bird, Managing Director at Focus Ventures, will serve as an observer on Turn’s Board of Directors which also includes Jeff Crowe of Norwest Venture Partners; Bill Demas, former SVP and GM of the Yahoo Publisher Network Group; John Moragne, co-founder and Managing Director at Trident Capital; and Turn’s CEO Jim Barnett.

Tod Francis, co-founder and Managing Director at Shasta Ventures, is also a board observer.

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