Summary:

One of the consequences of the growth of social media has been the rise of that category of digital, interactive advertising referred to as…

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photo: Corbis / Victor Habbick Visions

One of the consequences of the growth of social media has been the rise of that category of digital, interactive advertising referred to as social ads. Today, one of the companies working in this area, appssavvy, has announced that it has picked up $7.1 million in funding, with AOL’s AOL (NYSE: AOL) Ventures as one of its new investors. There seems to be mini-rush of funding for social advertising companies: the follows another social ad network, MediaBrix, picking up $4 million last week.

Social ads are are still an emerging area in digital advertising compared to basic display, search and even video advertising. While these are typically used in conjunction with social media sites — for example, alongside social games or within Facebook pages — there is of course an opportunity to extend these to other kinds of online properties.

However, it will be worth watching how social ads develop, and how sophisticated they become in light of the often-tricky area of online privacy: just last week, a judge in California ruled that Facebook users can potentially sue the social network for exploiting their “likes” in advertising on the site.

In addition to first-time investor AOL Ventures, Appssavvy‘s Series 1-A round included participation from existing investors True Ventures, the New York Times Company (NYSE: NYT) and some individual investors that include Scott Kurnit (About.com founder, CEO of AdKeeper) and Howard Lindzon (StockTwits co-founder and CEO).

Combined with the $3.1 million that these previous investors have put into Appssavvy, the company has raised $10.2 million to date.

The presence of AOL and New York Times as investors also points to how media and publishing companies are interested in also looking for new opportunities in their own properties.

The new funding will be used to expand appssavvy’s business activities in social ads, which is anchored by its new “adtivity” product. The company says its services are currently used by more than 125 publishers and advertisers.

Meanwhile, MediaBrix’s $4 million Series-B investment was led by Edison Ventures, whose principal, Ryan Ziegler, will join the MediaBrix board of directors along with Mike Leo of Operative, the advertising software company and another investor. This round takes the company to a total of $5.5 million in funding.

MediaBrix’s social ads platform, SocialFlex, is currently in beta and will be launching officially next year. At that time, the company will also be releasing an SDK to run the ads in apps — currently they only work on mobile web sites.

Ari Brandt, the new CEO of MediaBrix, tells us that so far that platform has had very strong engagement rates of around 25 percent. The units, which pop up in natural breaks during the game, are already running in various Facebook games including 50 Cubes, formspring and Puzzle Social, and runs ads from Nikon and several consumer package goods companies.

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