Demdex Comes Out Of Stealth, Offers Advertisers Their Own Behavioral Data Bank

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Advertisers and websites all too often rely on other companies for data about their own potential customers. A new advertising analytics startup called Demdex came out of stealth mode today to give companies a way to store and make sense of all the behavioral data which they collect or which is collected on their behalf.

They put all of this user profile data into a “behavioral data bank” and then score each user across more than 40 behavioral and demographic variables to come up with a “traitweight.” This number is supposed to be able to help websites segment their audiences better and advertisers target their messages more exactly.

Demdex was founded in 2008, and its investors include First Round Capital and Genacast Ventures, Comcast’s seed venture arm. It raised a $1.5 million seed round in August, 2008.

Update: I spoke with CEO Randy Nicolau to get some more details on the company. The service is a hosted model, and he is really trying to make sophisticated data mining accessible to a wider range of companies. It also normalizes across multiple ad networks, analytics service, and other data providers.

All of this behavioral data is currently locked away in black boxes inaccessible to the advertisers themselves or the Websites. If a big advertiser decides to switch technologies or ad networks, all that historical behavioral targeting data typically gets left behind. DemDex makes the data portable and puts it in the control of the Websites and advertisers themselves. They can plug it into whichever ad server or service they are currently using.

DemDex charges a recurring monthly fee based on the amount of data it stores for each customer. This fee can come out to about a penny per unique visitor per month, which would be $10,000 for every million uniques. The ability to more precisely segment and target audiences is supposed to more than make up for the cost.

All the data DemDex collects is based on anonymous cookie IDs, but any consumer can opt out of receiving targeted ads from advertisers using DemDex at DoNotTarget,com, where they can opt out on a company-by-company basis. (If you opt out, you just end up getting a generic default ad from the same company instead of one which tries to guess what might appeal to you based on your inferred demographics or past behavior). DoNotTarget.com is open to other advertising systems as well, and he hopes to make it an industry-standard registry.

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