Behavioral Targeting To Surpass Search Advertising By 2020

by Mark Walsh, Feb 27, 2009, 7:34 AM

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Jeff Hirsch, president and CEO of Audience Science, kicked off the OMMA Behavioral conference in New York Tuesday with a video time capsule featuring 1970s footage of TV announcers promising that people would someday read their morning newspapers on home computers, among other wild claims.

With that amusing history lesson in mind, Hirsch went on to make a few bold predictions of his own: that by 2020 behavioral targeting will surpass search in online ad spending, and that online ad dollars overall will eclipse those of TV. "Behavioral targeting is here to stay," he assured. "The idea of making sure you're reaching the right person at the right time with the right message is common sense.

As geotargeting was once considered exotic but has become a standard part of online marketing strategy, so too will BT. "In the future, it's going to be baked into everything we do," said Hirsch. To that end, Audience Science expects BT spending--now just a fraction of the estimated $10 billion spent on search marketing--will top that category and approach $30 billion by 2020.

Considering that search now makes up about 40% of online ad budgets, that may seem farfetched. But Hirsch suggested that BT would do for display advertising in the coming years what Goggle did for paid search by helping advertisers more efficiently target the right audiences.

He pointed out that people only spend about 5% of their time on search engines online. The bulk of their time is spent browsing other sites, where marketers can glean valuable anonymous data based on what articles they read, site sections they visit, and what non-personally identifiable information they give about themselves.

By reading a consumer's intent without a query, BT will help drive the growth of non-search advertising and content, and by 2020, total online ad spending will surpass TV advertising at more than $50 billion.

Despite the bullish projections, Hirsch acknowledged that it may be tough to convince consumers of the value of online tracking until publishers, ad technology companies and advertisers establish common standards for the practice. If those gathered at the conference can't agree on standard terms around BT, "how can we explain it to consumers?" he asked.

In an interview following his presentation, he also acknowledged the impact of the recession on clients' BT-related campaigns. While the business is still growing, he said that advertisers are shifting toward shorter-term buys--monthly rather than quarterly or yearly.

The firm estimates that about 24% of online advertisers now use BT, with that proportion expected to swell to 85% by 2020.

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0 comments on "Behavioral Targeting To Surpass Search Advertising By 2020".

1. John Dietz
   

   commented on: February 27, 2009 at 4:19 p.m.

   While I agree that BT will likely grow and become as common as other forms of targeting, I think sometime too much weight is put into BT as the solution to advertising problems. One reason that search is so strong is the context and state of mind of the consumer. Context still matters, and targeting consumer behaviorally still needs to happen with an understanding beyond just their historical behavior.

   I don't know that we'd ever be able to measure that BT ads will pass search, because it's really just another tool in the increasingly large toolbox marketers have available to tailor their messaging to the right audience, at the right time.

2. Scott Brinker from ion interactive, inc.
   

   commented on: March 3, 2009 at 8:41 a.m.

   Extrapolating present day patterns in the rapidly evolving world of digital marketing to 10 years into the future is a pretty ambitious claim.

   My start-up doubled its revenue from last year. If I extrapolate that 10 years into the future, we'll be a $20 billion giant. Certainly possible -- that is what we're aiming for, of course -- but pragmatically speaking, there are a lot of other variables in that equation.

   Behavioral targeting proponents would be better to focus on the value proposition in the short term first. (And I say that as an advocate of behavioral techniques myself.)

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