• by Joe Mandese  @mp_joemandese, November 11, 2008

In a Madison Avenue first, WPP's Mindshare unit has cut a deal to begin serving ads to social media users based on the time they actually spend engaged on social media sites, and the advertising content surrounding them. The deal-- details of which will be announced today with Lotame, the developer of an advanced audience behavior targeting system--is another step by a major agency away from the classic advertising model of placing ads based on the context of media content and instead moving to one based on the context of the audiences consuming it.

Lotame, which is a truncation of "local, target and message," is a scrappy startup that has won favor with publishers of mid-tier social networks--a grouping just under the Facebooks and MySpaces of the Web 2.0 universe that represents about 50 million unique users--by developing a suite of audience targeting systems enabling agencies and marketers to serve ads to users based on where and when they might be most receptive to an ad for a specific advertising brand.

"We're the next generation of an advertising network," boasts Lotame CEO Andy Monfried, referring to the rapidly emerging marketplace of third parties that are helping to organize the unsold and undersold inventory from the rapidly expanding sea of online publishers into manageable, relevant advertising buys for marketers and agencies.

Only Lotame focuses on social media sites, and builds audience networks based on how much time they spend on a site--and specifically, with advertising on that site. The tools are so sophisticated that they utilize biometric techniques that can determine whether a user's mouse is active or inactive on a screen and whether their screen scrolls on or off a page showing an ad, or even partially obscuring it.

In effect, Monfried says the system does for the social media marketplace what Google's AdWords system did for keyword search buys, or what Advertising.com did for the first generation of display advertising across advertising networks: it allows marketers to efficiently scale their messages to a relevant audience and to strip away extraneous impressions.

The move is part of a broader trend among a wide range of third parties that are helping to reorganize Web audience reach based not on the context of the content published, but on the behaviors of people accessing them. Last week, Havas Digital CEO Don Epperson revealed during a keynote at the OMMA Ad Nets conference in New York how the Madison Avenue giant has developed its own "virtual brand network"--a proprietary database management system that allows it to plan, buy and post online audiences based on their relevance and precise value to the agency's clients.

During his keynote, Epperson said such trends are decoupling audiences from content and are blurring the roles among publishers, networks and agencies.

In its announcement, Lotame says Mindshare will utilize its "time spent" online ad-buying system to support a campaign for "a national mobile telecommunications network." Mindshare currently handles Sprint's and Nextel's nearly $1 billion media-buying account.

"Time Spent is the right platform at the right time," Mindshare Managing Director Edward McLoughlin states in the announcement. "Interest in digital media is peaking, and by offering us and our customers the opportunity to test and measure the impact of exposure, we anticipate brands with any level of experience with online advertising to flock to this model."