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Offerpal Media raises $15 million in funding for its alternative advertising solutions

It’s almost unheard of to find a friend who doesn’t belong to at least one social network.  Advertisers flock to sites like Facebook and MySpace placing banner ads left and right, top to bottom taking advantage of this growing number of users.  They desperately attempt to entice users to click or simply look at, but studies continue to show lack of effectiveness in the banner ad method.    

It’s no wonder then that finding alternatives to the traditional advertising model is still of interest to investors.  Offerpal Media, which is currently a profitable advertising platform, today has raised $15 million in its second round of funding.  The round is led by D. E. Shaw Ventures and backed by existing investors InterWest Partners and North Bridge Venture Partners.  

Offerpal, which was founded in 2007, offers an interesting alternative to the traditional banner ad – a virtual goods reward system of advertising.  These are placed in social applications within social networking sites.

Let’s take fluff(Friends) for example.  fluff(Friends), was Offerpal’s first application partner.  Within this social application you are given gold to buy decorations or items for your avatar.  Once you run out of gold, you can’t continue to upgrade your character.  So you have pretty much two choices.  Buy Gold with your own cash?

Or where Offerpal comes in, get free gold as a reward for engaging with an advertisement?

Alternative means of advertising are working apparently.  Buddy Media, which creates interactive advertisements for social networks has raised a total of $8.3 million.  Watercooler, which produces interactive fan page applications for social networks has raised over $4 million in funding.  They offer highly targeted advertisements for fans.

With this round of funding the Fremont, CA company, Offerpal, plans to further develop its monetization platform to create more tools and services that enable social Web publishers to convert virtual currency into real dollars.