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AdRoll, one of the leaders in online ad retargeting, has raised a new $15 million round of funding.

Back in February, the company announced that it had quadrupled revenue and become profitable in 2011. AdRoll now says it has more than 5,000 customers and is adding almost 500 new ones every month.

The round was led by Foundation Capital, with participation from previous investors Merus Capital and Accel Partners. (AdRoll raised a $4 million first round way back in 2008.) Foundation’s Charles Moldow is joining the board, and in the funding press release he calls AdRoll “the best-in-breed platform” and says that “nearly every brand selling goods or services online now recognizes retargeting as an essential marketing tool.”

Retargeting means that ads are targeted based a consumer’s past behavior, usually if they visit a website but leave without making a purchase. When I spoke to Vice President of Sales Suresh Khanna earlier this year, he told me that before he left Google and joined AdRoll, he’d had a “knee jerk” reaction to the concept — but he argued that retargeting should be about more than just bombarding someone with kitchen knife ads if they abandon an online shopping cart with knives. Instead, the industry needs to “push beyond that” to take advantage of “all the data you have on all your customers.”

AdRoll says its plans include increasing the reach of its real-time inventory and introducing mobile, video, and social products. It was recently announced as an initial partner on the Facebook Exchange, a real-time bidding system where visitors to outside websites are marked with a cookie and then shown related ads when they come to Facebook. We’re now hearing that AdRoll is putting serious engineering resources into the exchange.

Aiming to become one of the giants of online advertising, ad retargeting startup AdRoll has hired Googler Suresh Khanna as its vice president of sales.

In nearly six years at Google, Khanna held a number of roles. Most recently, he was director of new advertiser sales, where he says he led the North American team for acquiring mid-market and larger advertisers. Until now, Khanna says AdRoll hasn’t had anyone focused on building out the sales team, so one of his big goals is to “attract rock stars.” He also says that he wants to help AdRoll build relationships with larger advertisers and ad agencies.

“I think it’s very early days on retargeting,” Khanna says. “We’ve got 3,500 customers but, again, I think the opportunity is in the millions of advertisers.”

Retargeting, where ads are delivered based on your past online behavior, sometimes get a bad rap. Khanna himself admits that he had a similar “knee jerk” reaction when he heard about AdRoll, thinking of it as a system where, say, someone abandons an e-commerce shopping cart with kitchen knives, then suddenly finds that they’re bombarded with kitchen knife ads wherever they go online. The key, he says, is to expand the definition of retargeting from that narrow use case to thinking “more strategically” about taking advantage of “all the data you have on all your customers.”

“I think that’s classic early days,” he says. “When you’re on the bleeding edge, that’s what the first round of people in the space might have done, but we need to push beyond that.”

AdRoll recently announced that it quadrupled revenue last year and was profitable for the first time.

(I also see, via LinkedIn, that Khanna is the co-founder and co-owner of Kasa Indian Eatery, one of my favorite restaurants in San Francisco.)

After a week of confused coverage around which mobile app developers access user address books and how they do it, we are finally getting a product-level resolution. Apple says today (in time to beat back some inquiring congressmen) that it will start requiring developers to ask for explicit user permission in order to access these contacts.

The new interface, slated for its next iOS operating system release, will provide a permissions notification to users after they install an app, similar to how it currently requires users to approve location sharing or push notifications. This change will add some arguably unnecessary friction to users of apps that pull address books — and a lot of developers will be affected, as 11% of free iOS apps were accessing address books as of the start of last year, according to one research report.

Beyond technical fixes that developers should be implementing anyway, the solution means that users will now at least know what’s being shared. But the problem I have with Apple’s solution is that it looks like an inelegant knee-jerk response, not a carefully planned advancement in how it helps developers build better products for users.

The reason Path as well as Twitter, Hipster and others were uploading address books with user names, emails and phone numbers was because they were trying to help users find existing friends who were also using their services. It wasn’t about reselling this data to the Egyptian government, even if that was a distant hypothetical possibility.

Recent investigations by VentureBeat, The Next Web and The Verge revealed that in fact, dozens of popular apps were accessing address books. But here’s some less anecdotal data about the scope of the issue, from Lookout. The mobile developer provides an app for iOS, Android and other mobile platforms that finds malware and other security and privacy problems within apps that users are downloading by scanning apps across the entire ecosystem. So unlike most data sources it can see the big picture here.

At the beginning of 2011, it found that out of the hundreds of thousands of free apps on iOS, 11% were able to read contacts. The company doesn’t have updated numbers available yet for iOS this year, and it’s only providing percentages, but clearly address book accessing is way more prevalent than just the few dozen apps that people have looked at so far.

The same goes for Android. Lookout’s data from last year shows that 7.4% of free apps on the platform were accessing user contacts; this year, the company tells me it’s tracking 7.1% that do.

Android is in a bit of a different position here, though, because it requires explicit user permission for contact sharing with apps before they install it. That’s more transparent, but also adds some friction.

Which brings me back to what developers are trying to accomplish. Typically, they want to help friends find each other within a seamless user experience. In Path’s case, it lets you sign in with Facebook, your address book and other sites to cross-reference them for any Path user who you’re already friends with elsewhere. This makes the service more valuable for users, which is a good thing.

Apple should be working to enable this while protecting user data in a more nuanced way, rather than just throwing in another permissions dialog like what it says it’s going to do. Facebook provides a good example of how it could do that. The social network has had to figure out how to balance friend list sharing with maintaining a simple social interface as its platform has grown over the years.

Today, Facebook shows you which friends are using an app before you install it. Imagine if Apple did this for Path and every other app in the App Store, instead of Path having to grab your address book afterwards to do the same thing.

If you click to install an app on Facebook, its permissions dialog tells you explicitly that you’re giving the app access to your friends lists (not friends’ emails and phone numbers) by default. If you don’t want to share your friends lists with the app, you don’t install it. If an app wants to do other things, like automatically share back to Facebook on behalf of a user, it needs to ask for additional approval within another permissions interface. If a developers wants to ask any user to contact friends within the app — for inviting them to play a game or whatever — it requires them to do so separately later on within the app.

On top of building in a feature that shows you mobile apps that you have in common with other iOS users, why doesn’t Apple offer a single permissions interface that gracefully explains the various permissions that apps might want, not just friend list access, but location, push notifications, etc?

I think the answer has do with Apple’s poorly-received Ping social network in iTunes. The company, for all of its amazing successes with software and hardware, just hasn’t made social features a key part of how it thinks about the world. The address book fiasco shows that when it ignores key social features, it gets itself and its developers and users into privacy issues. For the sake of its users and developer community, now is the time for Apple to focus on getting social features right.

Nielsen’s Q3 “State of the Media: The Social Media Report” highlights the growth of time spent on social networks, but it has also spurred some knee-jerk and sweeping conclusions, such as “social has overtaken search.” Statements like this might lead a person to believe that search and social are mutually exclusive channels for gaining human attention in advertising campaigns. Bound by the important similarity of auction-based pricing, search ads and social ads are otherwise two very different animals that require different types of nurturing, creative support, and management.

True success in social media advertising requires campaigns that marry the channel’s granular segmentation capabilities with strong creative that caters to many small segments. While that sounds like what typical search teams offer, there’s a difference in how the targeting and creative strategy are executed between search and social. Although the fine-tuned skills of a veteran paid search team can bring tremendous value to social media campaigns, injecting strong creative and participant experiences can take relevance and engagement to new heights.

Blended skill sets are best
According to the Nielsen report, social networks and blogs now account for nearly a quarter of total time spent on the internet in the U.S. Nearly four in five active internet users visit social networks and blogs. Tallying in at more than 53 billion total minutes in May, Americans spend more time on Facebook than they do on any other U.S. website. These findings illustrate nothing less than a tremendous opportunity for advertisers that tackle the channel correctly, but doing so requires the right blend of analytic and creative skills.

While search marketers master statistical analyses, bid strategies, and click-through rates, these analytical skills alone aren’t enough to drive superior results in social media. In fact, most of today’s large-scale social media ad campaigns vastly underutilize available targeting capabilities. Digital marketing software platforms like Marin and Kenshoo only strengthen the notion that search marketers by default ought to also manage social campaigns, and that it’s only a matter of having the right technology to enable it.

Whether advertisers are planning to hand off social media advertising to a search team or not, they should keep two fundamental rules of thumb in mind to govern their social campaigns.

Design and deliver a complete experience appropriate for each participant’s intent and surroundings
The search engine experience and the social network experience are night and day different. People visit a search engine to satisfy some sort of need. It may be a need for a product, an address, song lyrics, or any number of things, but people are actively seeking out some sort of information.

People tend to visit social networks for different reasons. Social networkers browse topics, issues, or celebrities to inform themselves. They hang out with friends and interact within communities of interest. If they seek out a product, they’ll visit the company page or ask friends for opinions — not rely on ads being served. However, they do see ads, and they do click on social ads that interest them.

Chances are, they’re not going to leap from their social experience into a “buy now” experience, but they might be compelled to engage in something interesting. Ad managers who can employ more than just a standard promo-and-landing-page experience stand to benefit more when they can utilize all the experiences in a brand’s toolkit, not just the ones directly related to purchase. For example, contests and games are compelling and interesting ways to engage, as are interactive applications and entertainment or video. Because this activity is further from a purchase act, search agencies should work with clients to design additional measures of brand success such as intent or preference metrics. Attribution studies and surveys can help further track influence on eventual purchase or recommendation behaviors.

Savvy marketers encourage meaningful dialogue with all of their agencies to help create connected experiences and allow the teams managing Facebook ads to test various metrics and experiences to more fully leverage the opportunity.

Target ads, not just ad delivery
In search, it’s all about the keyword (the “what”). In social, it’s all about the participant segmentation (the “who”). Social advertising has to be about more than directing ads. Indeed, success awaits the advertisers who cater to individuals and give them what they care about or want. Advanced search marketers do this today, too, serving different ads to an iPad user versus an Android user, for example. But because of the context of the interaction, this is even more critical in social advertising.

At the most basic level, advertisers should establish a two-pronged approach to targeting. Don’t just target for ad delivery, also target segments of people for ad development, creative, messaging, and more. If your product appeals to all people ages 18 to 50, don’t simply create one ad and target that ad to all people within the age range.

Instead, leverage the ability to further segment groups by gender, interests, location, and other factors, and create compelling ads that speak to each group independently. Cater to each of these micro-segments, speak to their unique interests, and leverage attributes they will likely embrace.

Targeting alone won’t always deliver better results, which further outlines the need to test and optimize. For a retailer, we tested general catalogue pages (e.g. category pages) against a single product page and further created gender-specific pages. Using ad targeting for gender, the resulting conversion rate was almost twice as high for the more general catalogue pages than the specific product pages, across both genders.

It is imperative to regularly test and measure — whether two, five, or even hundreds of ad versions and landing experiences — to find the optimal response outcome. In that respect, search agencies definitely have an advantage in managing social to scale. Social ads respond to the test-and-measure discipline we refined in billions of keyword campaigns and will only get better as we learn to embrace the nuances of managing to people rather than queries.

Dana Todd is senior vice president at Performics.

On Twitter? Follow iMedia Connection at @iMediaTweet.

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It appears that Google is listening to feedback on their new social networking site and acting accordingly.  Google+ had a bit of a rocky launch with issues around brand accounts, and a total lack of Google Apps support.  Even a Google Engineer recently called the service a “knee-jerk”…



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It's something of a sports cliché that Philadelphia sports fans never disappoint, because they always disappoint. But Flyers fans set a new low for themselves when a group of them booed members of rival teams as they appeared in a PSA about fighting cancer. The ad was shown between periods during a Philly game against the Vancouver Canucks, and Twitter lit up with condemnations of the childish, knee-jerk response. The Puck Daddy blog, for its part, doesn't want us to think Flyers fans are pro-cancer, and jokingly questions the arena's decision to run the ad at all, knowing there would be rival players in it. Since trying to shame Philly sports fans for being assholes is impossible, I'd like them to keep running the ad during games, just to see if fans continue to boo it, and for how long. If it becomes a tradition, then the rest of us will know which city to wall in when the apocalypse comes.