Digital marketing firm Exponential has released a new ad targeting system that allows advertisers to create customized spots targeted at individual web surfers.

The dynamic ads are personalized based on a particular user’s geography and past web sites visited. The marketer can also contribute its own data--such as local real estate listings, or flight information from a particular city--to further customize an ad.

With one creative ad design, a company can reach thousands of consumers with slightly tweaked messages. Emeryville, California-based Exponential has been testing the new ads and found with some consumers an average of 20 percent lift in click-through rates.

“It’s really about creating a one-to-one dialogue with the user,” said Alistair Goodman, Exponential vice president of Strategic Marketing. “The more relevant marketer can make the message for the user, the more likely he is to take them up on the offer.”

A number of companies have moved into online ad targeting, which promise to bring higher revenues for advertisers and publishers. Last month Yahoo launched SmartAds, a similar product that serves customized ads based on a person’s online behavior, location, and demographic characteristics. AOL soon followed suit and agreed to acquire behavioral targeting firm Tacoda.

Exponential is best known for its ad network, Tribal Fusion, which focuses on large brand advertisers. Founded in 2001, Tribal Fusion has in the past year branched out, launching performance marketing unit FullTango, lead generation outfit Lead Genuity, and in-text contextual ad firm EchoTopic. Exponential was also created to be the parent company.

The moves into behavioral and contextual targeting, as well as the expansion of the company, are parts of a larger trend in the online advertising business. The industry has seen rapid consolidation, as the tech giants such as Google, Yahoo and Microsoft--as well as traditional ad holding firms like WPP--seek to offer end-to-end solutions. Meanwhile, smaller firms have expanded in order to compete.

Ad networks are no exception. Most networks started out by aggregating unused inventory and selling it off with a markup. Some, such as Tribal Fusion, offer a more sophisticated revenue share model that makes more money only if the publisher does too. But networks that cannot offer a wider array of products and services, such as behavioral targeting, are increasingly unable to compete in today’s online marketing environment.

The growth of the Internet has led more advertisers to run campaigns that are coordinated among a variety of different online channels, including search, display, video, and sponsored content. And marketers have made it clear they prefer to deal with as few agencies as possible on such campaigns.

Tribal Fusion is the fifth largest ad network as of July, reaching 72 percent on online users, behind AOL’s Advertsing.com, ValueClick, Yahoo, and Google, according to comScore.