Gurbaksh Chahal, the serial entrepreneur who started behavioral targeting firm Blue Lithium and virtual payments provider gWallet today unveiled his latest venture: RadiumOne, an ad network promising better results by mining the social graph to target ads.
The startup will tap into the data that people share through social networks (excluding Facebook), links, blog posts, videos and other online sources and figure out which consumers most closely match a brand's customer base based on how they interact with each other.
People who know each other and share common interests will be segmented into "social clusters" that can be targeted by marketers. RadiumOne will then model lookalikes of these groups based on proprietary algorithms. "That means we can build a huge audience for advertisers very quickly and still bring unprecedented targeting to these huge campaigns," said Chahal.
The ad system in particular aims to leverage the influence of brand advocates through "social retargeting" techniques to identify consumers who share a link to the current customer base and serve them an ad they are more likely to interact with.
Based on testing so far, RadiumOne says it is delivering ad conversion rates up to five times that of typical display ads. And the company is so confident it can deliver improved ad efficiency, that it is launching with a pledge to refund the full cost of campaigns that run on the new network.
The guarantee almost seems an acknowledgement that RadiumOne has to do something different to cut through the noise of hundreds of ad networks all claiming to slice and dice data better than the rest to serve up relevant ads.
"The world doesn't necessarily need another ad network. What we need is a better ad network. The behavioral targeting used by today's ad networks is very limited," said Chahal. "RadiumOne will look at new sets of social data that have not been used in the past to target ads."
Among the new types of data the ad network will sift is user data from gWallet, the company Chahal started in 2009 that distributes marketing offers from through gaming applications on sites like Facebook and MySpace. By signing up for trial subscriptions or filling out brief surveys, players can gain virtual currency for buying in-game items. gWallet now has 75 million monthly unique visitors and has attracted 135 brands, according to Chahal.
But RadiumOne will become the parent company that will eventually encompass various ad categories, in which gWallet will focus on social media and social games. "There will be synergy between RadiumOne and gWallet and we will leverage the connections we have already made so that advertisers and publishers can work together across both platforms," said Chahal.
Unlike existing social ad networks such as Lotame that serve ads within social media, RadiumOne will focus on delivering ads across comScore 500 sites, and plans to announce some exclusive partnerships in the next few weeks.
In terms of avoiding privacy issues, Chahal says RadiumOne is relying on standard Web cookies for tracking rather than more controversial methods like Flash cookies or other types of beacons considered to be overly intrusive. "We care about people's intent, not their identity," said Chahal. "Essentially, we're just picking up where behavioral targeting left off and applying more prevalent social data into the mix."
In that vein, Chahal's non-compete agreement with Yahoo following the $300 million sale of Blue Lithium in 2007 just expired last week, freeing him to launch RadiumOne.