• by Gavin O'Malley  @mp_gavin, September 7, 2007

AOL completed its acquisition of behavioral targeting network Tacoda on Thursday.

AOL announced its intention to acquire the company in mid-July in order to add a leading behavioral targeting network to Advertising.com's third-party display advertising network.

"Behavioral targeting is a fast-growing part of the advertising business, as marketers increasingly look to get efficient and measurable results from their advertising dollars," says AOL Chairman and CEO Randy Falco in a release. "Combined with our own network, our Advertising.com third party network, and our other recent acquisitions in the advertising space, AOL now has one of the most robust and sophisticated advertising platforms in the business."

AOL acquired Advertising.com in 2004, and has operated that business as a separate subsidiary, which it will also do with Tacoda. Before the buy, Ad.com was already the largest third-party display ad network in the U.S., working with roughly 3,000 publishers.

The behavioral targeting market is projected to increase to $3.8 billion by 2011--from $350 million in 2006, according to New York-based market research company eMarketer. Through Tacoda's cookie-driven practice, advertisers can deliver messages to consumers based on where they have gone online, regardless of the content of a specific Web page.

Tacoda's clients include Coca-Cola, Bank of America and General Motors. Its publisher network includes The New York Times and NBC Universal.

"The acquisition of Tacoda will build on our advertising momentum, letting us better serve advertisers by enhancing our ability to precisely target advertisements across an even broader network," says Ron Grant, AOL President and COO, in a release.

The process was set off in May when Tacoda began looking for additional investment capital in the wake of mega-deals involving Google and DoubleClick, Yahoo and RightMedia, WPP and 24/7 Real Media, and Microsoft/aQuantive.

Google launched a behavioral ad product in April, and Yahoo recently introduced in the travel category its SmartAds, a behaviorally targeted product with creative assembled on the fly.

Earlier this year, AOL bought Third Screen Media, the leading mobile ad network, and AdTech AG, an international online ad-serving company based in Frankfurt, Germany. In 2006, AOL acquired Lightningcast, which delivers ad solutions for video content.