Fastclick.com said yesterday that it closed a $75 million round of venture financing. The funding marked the first institutional investment for the Santa Barbara, CA-based online direct response ad network.
Highland Capital Partners and Oak Investment Partners led the funding. Steamboat Ventures, Walt Disney's VC arm, also participated. A large part of the funding went to repurchase shares of the company's stock. The rest of the money is earmarked for expanding Fastclick's direct response ad network.
Fastclick runs direct response online advertising for 300 advertisers across a network of 7,500 small to midsize Web sites that reach 80 million users each month. The company uses tracking technology to target ads to visitors based on their prior Web site behavior.
“We've taken the ad network model and improved on that,” said Fastclick CEO Kurt Johnson.
As part of the deal, Bob Davis and Dan Nova from Highland and Fred Harman from Oak joined the Fastclick board of directors.
Performance-based ad spending — which can be on a cost-per-click, cost-per-action or cost-per-conversion basis — has grown substantially online. According to the Interactive Advertising Bureau, performance-based deals rose from 35 percent of online ad spending in the third quarter of 2003 to 39 percent in this year's third quarter.
Online advertising networks, which fell out of favor during the dot-com meltdown, have come back in vogue. In June, AOL paid $435 million to acquire Advertising.com, a performance-based ad network.
Google has built an extensive ad network through its AdSense for Content program over the past year. The company has added image ads to the network, allowing it to serve a more diverse ad inventory. Other online ad networks include Burst Media, 24/7 Real Media and ValueClick.