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Veoh Networks launches behavioral ads

Online video site has begun testing a service that matches ads to users' viewing history, searches, and other activity. Behavioral ads have been controversial, though.

Veoh Networks, an online video start-up featuring content such as Lost, ESPN SportsCenter, and The Bachelorette, has begun a beta test of advertisements geared to users' earlier video-watching history and other activity at the site.

The new ad system "combines video consumption, searching, browsing, and community activity data from Veoh's more than 28 million viewers to deliver branded ads and content to viewers across multiple lifestyle and interest categories," the Los Angeles-based company said Monday. Tests of the system showed targeted ads perform more than twice as well as ordinary ads, the company said.

Behavioral advertising offers the promise of more closely matching advertisements to people who are likely to be interested, but they've led to controversy because of privacy issues stemming from potentially close monitoring of people's online activity. They've been a particularly touchy subject at social-networking sites, where users store a wealth of personal information and connections to friends and other contacts.

Behavioral advertising as a concept spans a range of monitoring possibilities: everything from showing ads related to what a user is doing on a site at a particular moment, to including the user's history of behavior on that site, to incorporating the user's personal profile data or contacts, to monitoring all of a user's Internet activity.

Veoh is optimistic about the technology, though.

"With more than a billion video views every quarter, Veoh is in the unique position to observe viewer behaviors and patterns across various forms and sources of content at an unprecedented scale," Veoh Chief Executive Steve Mitgang added in a statement.

The initial system will target ads to more than nine categories of users, but the company also can set up customized categories around specific advertiser preferences, Veoh said.