• by Laurie Sullivan  @lauriesullivan, August 24, 2010

Later this week, Image Space Media plans to launch a local targeting feature to its self-serve advertiser platform, AdStart, which lets marketers create and customize in-image ad campaigns.

Local targeting enables advertisers to reach audiences based on physical location in the United States, even if they read national papers or magazines. The technology identifies a user's IP address and delivers ads specifically for that area. The feature adds targeting to AdStart's geotargeting options, which already let users target by country.

Advertisers can specify city, state or designated marketing area within the U.S. For example, if a new bakery in San Francisco wanted to increase brand awareness, it could target its ads to the San Francisco DMA, and only Internet users in the San Francisco metropolitan area would see the bakery's ads, explains Image Space Media CEO Jesse Chenard, one of three Tremor Media founders.

Chenard, who left Tremor to join Image Space Media in September 2009, says the company has raised $2.9 million in venture capital and private investment funding. The company goes up against others in the space, such as Pixazza, a Mountain View, Calif. startup backed by a variety of investors like Google's venture-capital arm Google Ventures.

Aside from AdStart, investments have helped Image Space Media develop and launch PubStop for publishers about two months ago. Chenard will offer a $25 coupon to advertisers as an incentive to kick-start the AdStart local targeting feature, but the company also plans to move quickly into other related services.

"Our platform has been strictly performance-based, but we're putting together a program for advertisers and a few select publishers to run rich media campaigns in images," Chenard says. "Rather than stepping through a Google AdSense-like text link in the image, you'll see animation in the rich media ad unit."

Chenard believes it's possible to build out a broader audience across the imaging space. The company delivers about 300 million ads this month, approximately 60 million unique. Now it wants to prove the value is more than performance-based and that serving up more ads on publisher sites across a wider area can actually lower the cost.

AdStart determines the ad to run by giving ranking scores to metadata in the image, page title, description, and more based on the image in the photo. A taxonomy tree helps determine the best ad in the image.

Rich media features in AdStart will not become available as a self-serve platform, Chenard says. He wants to avoid the problem that other self-service rich media ad-serving platforms have experienced with malware injected ads.