UPDATE 1-Brazil rolls out Phorm's controversial ad service

* Brazil first country to sign up to targeted ads

* Internet service providers, content groups sign up

* Phorm shares up 15 pct

(Adds details, background, shares)

LONDON, March 26 (Reuters) - Targeted online advertising firm Phorm PHOR.L, which has faced strong opposition from privacy groups, said it had launched in Brazil its first ever commercial deployment, sending its shares 15 percent higher.

Britain's Phorm said on Friday it had signed up internet service providers and content groups to roll out the service across Brazil, and had secured $5.6 million in pre-booked revenue from advertisers.

The group's technology, which tracks users' browsing across participating websites in order to offer personalised advertising, was trialled by dominant UK telecoms firm BT Group (BT.L), but the group decided not to deploy the service.

Although the monitoring is anonymous, the technology has faced opposition from privacy groups, but Phorm's founder and chief executive Kent Ertugrul said the company was better prepared for the Brazilian launch.

"Our commercial deployment in partnership with many of Brazil's leading internet players reflects the many lessons learnt from experiences in other markets," he said in a statement.

"We're very pleased to be moving into a new phase where our system is being operated on a commercial basis and scale."

The group has signed up newspaper publisher Estadao, ISPs UOL and iG, telecoms group Oi (TNLP4.SA) (TNE.N), and Internet and digital media publisher Terra.

Shares in the group, which hit a peak value of 3,725 pence in June 2007, rose 15 percent in early trade to 407 pence, valuing the group at about 66 million pounds.

(Reporting by Paul Sandle, Editing by Rosalba O'Brien)