The Dawn of Like-vertising

Two truths of the online media world: brands want to develop social connections with consumers and there are tons of cheap ad inventory thanks largely to the explosion of social networking. The combination of the two could result in more advertising designed to drive social connections rather than transactions or brand awareness.

A new online ad network, RadiumOne, is debuting what it’s calling “like retargeting.” The system works like this: Companies will pixel their pages to identify visitors. RadiumOne then uses that information to find those visitors around the Web and show them ads designed to drive them to “like” the brand on Facebook. The ad network is expanding the pool of potential likers by mining those candidates’ social connections to also show the ads to them.

“Instead of retargeting people in the [sales] funnel, we’re adding people to the funnel,” said Gurbaksh Chahal, CEO of RadiumOne and founder of behavioral ad network Blue Lithium that was bought by Yahoo for $300 million September 2007.

In doing so, a target audience of 100,000 can grow by six or seven times, he said.

RadiumOne is one of several companies hoping to cash in on the vast amounts of social data generated online. They license the anonymous data from a variety of sharing services, such as URL shorteners, then crunch the numbers to construct a social graph of users.

“Usually you see an uptick,” said Marc Ruxin, chief innovation officer at Universal McCann who is on RadiumOne’s board of advisors. “Social data helps. Does it solve the broad problem of display and low engagement rates? No, but it makes it moderately to occasionally a lot better than it is now.”

Facebook, of course, sits on the mother lode of social data. It does not allow companies to install pixels on its page to collect information, making firms like RadiumOne look elsewhere for connectivity data. Another challenge for a retargeting system is the technique often doesn’t need an ad network, thanks to demand-side platforms allowing the buy-side to find such audiences directly through exchanges.