• by Laurie Sullivan , Staff Writer @lauriesullivan, September 15, 2010

Real-time bidding (RTB) in online advertising continues to grow, forcing companies to get smarter about the benefits of precise ad targeting -- and could become a real force as an alternative to targeting Web site visitors by behavior.

AppNexus, which provides a RTB platform, has integrated Peer39's semantic targeting capabilities, allowing ad networks, demand-side platforms and direct marketers to optimize and target display advertising campaigns. Clients also can use the semantic data with other targeting technologies. The companies plan to announce the deal on Wednesday.

Semantic ad targeting typically hasn't been deployed in display advertising. Historically, the technology hasn't worked well when it comes to defining content on a Web page in display ads, but it works well in search, capitalizing on phrases and keywords.

Peer39 and other similar companies that target ads based on what's on the Web page, do it through natural language processing, which breaks down the content on the page into a mathematical formula. It also uses machine learning that can identify Jaguar the car vs. jaguar the animal. Microsoft and a handful of other companies are known for their semantic ad technology that identifies the context of an article to determine the meaning of a word. Based on that meaning, ads automatically get plucked and served up in amazingly fast speeds.

"Companies will have an option to overlay whatever audience data that's in line with the specific ad buyer," says Andy Ellenthal, Peer39 CEO.

Peer39 processes more than 1 billion impressions daily and responds to categorize content and target the ad in a couple of milliseconds.

AppNexus' exchange sits on top of a variety of inventory resources such as Google's ad exchange, AdMeld, and other ad networks or publishers. For ad nets, exchanges, optimizers, publishers and other demand-side sources, Peer39's semantic targeting let companies monetize more content at higher prices while generating greater click-through rates. For advertisers and ad agencies, the semantic targeting platform works in conjunction with behavioral targeting data to improve overall campaign performance.

The company claims it outperforms behavioral targeting data on some campaigns. The emphasis on inventory sources will force companies to ensure systems can operate efficiently, and buyers see the benefits promised to them.