Turn to Launch Hybrid CPA Ad Network

San Mateo startup Turn will unveil an interesting new advertising platform tomorrow at the Web 2.0 conference. It combines Cost Per Action bidding with a wide range of user, site and ad performance analytics. The company calls itself the world’s first automatic targeting, bidded CPA ad network.

I often write that new ad networks bore me as a prefix to profiling an interesting one, but lately I’ve been seeing enough interesting new approaches to online advertising that I’m going to confess a newfound interest in the field. To say there is room for innovation in advertising would be a huge understatement.

The Turn network is taking an approach that mixes cost-per-action (CPA) bidding and analysis of 60 contextual, behavioral, demographic and performance factors in determining which ads to serve and when. The company intends to do all the ad placement heavy lifting in the background so that buying ads is made supremely simple and yet unusually effective. That’s what they intend anyway. It reminds me of RightMedia’s dynamic serving of whatever subnetwork’s text ads will pay the highest at a given moment and BrightRoll’s selection of video ad formats based on ongoing conversion performance.

Turn was founded by Jim Barnett and John Ellis, formerly CEO and CTO of Alta Vista. As the company launches it has 5 million ads in its inventory from 1 thousand advertisers, run by 30 publishers with 11 million uniques visitors per month. The company has taken $18 million in venture funding from Norwest Venture Partners, Trident Capital and Shasta Ventures.

Buying ads in the Turn Network doesn’t require keyword selection and management. Instead, buyers identify actions they want their audience members to take and how much they would be willing to pay per time those actions are taken. That action might be a site visit, email sign-up or completed transaction.

When visitors come to a site, data about those users, contextual analysis of the site, of the ads and of every ad permutation’s success in that and related sites are all considered in determining each ad’s probability of success. That probability of conversion is then considered relative to the price being paid on a CPA bases. The CPA bid divided by the probability of the action being takes equals an ad’s effective revenue per thousand impressions. And thus an ad is served!

Ad networks must all look shiny, new and promising when they launch. Only time will tell how effective this network’s execution will prove to be. It’s time someone made a mixed CPA and analytics based approach available.