• by Mark Walsh  @markfwal, November 6, 2006

Started two years ago, AdBrite set out to establish an ad network that would connect big brand marketers with niche Web sites and charge advertisers flat weekly rates rather than billing on a per-click basis.

Since then, the fledgling company has grown to a network encompassing 28,000 publishers and brand marketers including ESPN, Estee Lauder, Skechers and Sports Illustrated. And since early 2005, the monthly audience for its ads has rocketed from 7 million unique visitors to 62 million as of September, according to comScore Media Metrix data.(By comparison, the ad network with the largest reach, advertising.com, had 145 million visitors in September.)

In response to rapid growth, AdBrite is now adopting an auction-based model for its automated ad network that allows advertisers to bid on a per-impression basis for ads that can be targeted by criteria including keywords, geography, demographics, content channel and site quality. For now, the ad formats are limited to text, banners and interstitials, but AdBrite plans to add video ads in the coming weeks and eventually mobile ads.

Publishers maintain the ability to approve ads and gain the chance to generate higher CPMs through the addition of non-text ad formats.

"We still offer a flat rate, but we clearly think that this is the way to go since it's much more scalable and much more what advertisers want," said AdBrite CEO Iggy Fanlo. "We're trying to create a complete exchange model." Through the range of targeting criteria AdBrite now offers, Fanlo said that advertisers could more effectively tailor ad campaigns to reach the desired audience.

One of AdBrite's underlying conceits is to allow brand advertisers to tap into the "long tail" of smaller sites and blogs that they might otherwise overlook. At the same time, publishers gain the ability to better monetize their online real estate. "AdBrite 2.0 is all about extracting a site's brand value," said Fanlo.

AdBrite isn't the only online exchange trying to bring greater efficiency to Internet advertising. Right Media, which recently received a $45 million venture investment led by Yahoo, operates an online ad marketplace that allows publishers and ad networks to auction unsold inventory to the highest bidder. It involves about 60 ad networks representing 8,000 publishers and 3,000 advertisers.

But Fanlo said AdBrite--which he expects to have revenue of about $20 million this year--is more focused on working directly with publishers and advertisers rather than ad networks.