Phorm raising millions more for ad targeting in Turkey

Next on controversial ISP-level ad targeting start-up Phorm’s world map of fast-growing online markets to feel out is Turkey.

The outfit is repeating its trick of selling new shares to raise more money to fund its new effort there. This time, it is raising £7 million ($10.8 million) by selling 5.6 million new shares (seven percent of the company) to Mirabaud Securities and Liberium Capital.

I calculate Phorm has now raised around £131.56 million since 2005 through 11 rounds of various kinds, but has booked almost no revenue.

Successive share issues have diluted previous investments, but Phorm has also tried to ringfence previous investment by establishing new country-level offshoots through which to raise money. In June, it signed an agreement to raise £20 million to fund a distinct new Chinese spin-off, immediately valuing its fledgling unit alone at a giddy £100 million.

The focus on emerging markets, at least, is wise. Turkey is Europe’s fastest-growing market, displaying the highest page views per user, according to comScore

Phorm’s technology uses ISPs’ data of their subscribers’ browsing habits to better target ads served through partner publishers. The idea promised to increase advertising rates for publishers and click-throughs for advertisers.

Although the idea was really a more granular version of web cookie-based ad targeting that already goes on, it was met with a privacy outcry. Despite Phorm softening the service offering, three UK ISPs who trialled it decided not to go deploy it. Phorm moved operations to South Korea but the same happened. So it moved to Brazil, where it has signed with ISP Oi. Now it has relocated its HQ from Delaware to Singapore along with the new Chinese focus.

If it can ever prove itself in overseas markets and shake off the initial UK privacy concerns, Phorm could be a very big deal for online advertising – a sector facing shrinking CPMs and in which ad tech like real-time bidding is desperately trying to wring remaining pennies out of digital nooks and crannies.

Phorm signed its fourth ever ISP deal in Turkey in July, with the country’s number-two operator TTNET. The outfit says it is now genuinely serving ads to over one million unique opted-in users.

“The scale of our operations in Turkey represents a significant revenue opportunity for Phorm,” CEO Kent Ertugrul said.

Brazilian user count has doubled since March and commercial activity in Romania will begin soon, Ertugrul said.