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Oct 21, 2003

Is Behavior Targeting the Next Big Online Advertising Trend?

SUMMARY: No summary available.
Internet-ad targeting is growing up. More and more major publishers use analytics to offer online advertisers the ability to target consumers based not only on demographics but on behavior.

It's one of the most interesting things going on in the online advertising space, says Marty Levin, former Senior VP of Jupiter Media Metrix and former Business Unit Manager of MSN Advertising at Microsoft.

Behavior targeting goes beyond reach, frequency, and monetary value of a user: "It's, 'When did they come, where did they come from, how long did they stay, what time did they come, are they regular users during the work day?'" Levin says.

We had a quick conversation with Levin and Craig Calder, VP Marketing at New York Times Digital, to find out how behavior targeting works and what advertisers should expect from publishers now that behavior targeting is available.

-> How behavior targeting works: Two examples

Example #1.

Imagine John Smith goes regularly to the Wall Street Journal financial pages. Sites offering behavior targeting can tell that every morning, the same John Smith also heads off to the movie reviews.

Once a publisher knows that not only John Smith but, say, 70% of business section viewers also read the movie page, the publisher can offer advertisers the same virtual audience they'd reach at the high value area for a lower rate by advertising on the movie page.

But smart publishers take behavior marketing a step beyond simply looking at behavior patterns and placing ads where the target visitor is likely to be, Levin says.

Example #2.

Say an advertiser such as IBM is trying to target business people visiting, "Before, you could target contextually by placing ads in a section around content that fits your goals, or you could place demographically, or just run of site," explains Calder.

But with behavior targeting, the site is now able to tag people who have visited the business pages five times in the last month (indicating a strong connection to the topic) and serve IBM ads to those people wherever they go on the site, even outside of the business area.

"We're not trying to predict where they go," Calder says. "We're following where they go so that it's a guaranteed exposure."

-> Behavior targeting from a publisher standpoint

In order for online publishers to be able to offer this type of targeting to advertisers, they must have behavioral data on where visitors went on the site and what they did there, plus the algorithms to make yes and no decisions.

"Very few publishers can do this themselves," Levin says. "However, there are companies who are trying to make this available to as many publishers as possible."

Beyond the fact that advertisers may begin to demand this capability more and more as time goes on, being able to offer behavior targeting helps publishers in three major ways:

1) Raises inventory value of the site

Publishers have high value inventory and then "doesn't-do-much-good" inventory, Levin points out. "The sad truth is that high value ads sell out right away. How do you give value to low-value inventory?"

By selling inventory on a lower value page but reaching the same audience that views a high value page, you raise the inventory value of the entire site, says Levin.

2) Helps manage inventory

"The more targeted you get, the bigger challenge it is to serve ads," Calder says. By giving advertisers more opportunities to target specific users, you're essentially filling in gaps that may otherwise go unused.

"It helps us manage our inventory better," Calder says.

And the more efficiently you can manage your ads, the more efficiently you can package and report on them for your advertisers.

3) Generates more sales

"We've found [behavior targeting] is successful as acting as a catalyst to bring in new buyers and to increase the amount of the buy," Calder says.

-> Behavior targeting from an advertiser standpoint

For advertisers, there's no downside to testing behavior targeting, except that most media companies don't yet offer it. So if a publisher doesn't offer behavior targeting, should you go elsewhere?

Absolutely, says Levin. "Tell your agency, hey, I like this kind of targeting, find me a publisher who has this capability," he says.

"First there was no targeting to speak of, then it was, 'Well, ESPN is probably mostly men,' then it was targeting using registration, then it was deep targeting in only the 'blah blah' section," Levin says.

If tests pan out, expect behavior targeting to increase. "You can expect all the [major] publishers to have this capability. It goes into the loop of being expected," Levin forecasts.
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