Brazil's boo-box Aims to Customize Online Ads

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3910v1-max-250x250Some $65 billion in advertising is expected to disappear from traditional media outlets in 2009, according to a recent report from Outsell Inc., a media research and advisory company. Companies will instead focus their investments on their own web sites and other forms of online marketing, where they can make a direct connection with consumers. While for publishers, this is just the latest dark forecast, for boo-box, a Sao Paulo-based online ad startup looking to break into the North American market, it represents a possible point of entry.

Currently boo-box is used by more than 80 percent of Brazil’s largest blogs and online publishers, serving anywhere from 35-50 million impressions monthly. Founded in 2007, boo-box has created a highly customizable advertising tool that allows a content creator such as a blogger or niche publisher to select the advertisements that will appear and to suggest those that are the best match for his readers. Using it, content creators can add an additional layer of advertisements that can be tagged to images or content within an article.
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The result is that boo-box creates six additional advertising spaces that can coexist with Google AdSense without interfering with the reader’s experience. Depending on the campaign, boo-box can return 5x as much advertising revenue as AdSense, according to Conrado Navaro, author of personal finance blog, Dinherama. But unlike AdSense, which generates sponsored links based on keywords, boo-box software lets the content creator tag words or images inside a post with context-relevant advertisements, relying on human intelligence instead of an algorithm.

In Brazil, while boo-box and Google AdSense don’t compete directly for the same space on the page, they do compete for budgeted advertising cash. In the U.S., boo-box could face stiff competition from established ad networks such as Blog Ads and Federated Media, companies with an established record of targeting readers using social media.

Over the past six months, boo-box has grown to 12 from three and is preparing for a third round of venture funding from Monashees Capital, the venture firm that invested $300,000 in their first round and a much larger, though undisclosed amount in the second round. A third round from Monashees could come by the end of this year, according to CEO Marcos Tanaka, which the company would apply to its internationalization effort, Tanaka said.

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