Does Behavioral Targeting Need A Ranking System?

by Laurie Sullivan, Feb 3, 2010, 5:00 PM

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EMarketer estimates online advertisers in the United States will spend about $2.6 billion by 2014 on behaviorally targeted (BT) advertising, up from more than $1.1 billion this year. Estimates put the industry on a growth rate of about 20% from 2009 through 2014. But even with all that projected growth, do advertising and marketing executives understand the benefits and the challenges?

David Hallerman, senior analyst at eMarketer, tells me the report, scheduled for release on Feb. 11, will cover topics from the potential for combining data and social media, to how the government will address privacy concerns.

When it comes to actually implementing BT platforms, Hallerman tells me advertisers' biggest concerns are focused on brand reputation and campaign effectiveness. Can the technology actually hit the mark and drive higher conversions? There's also a growing recognition that BT can become a useful tool -- but, like all useful tools, it can't always work alone.

BT belongs in the narrow part of the marketing funnel, where advertisers have a better sense of the target, Hallerman says. In the upper part of the funnel, where advertisers try to build awareness for the brand, other targeting methods and tools work better, more cost-effectively.

I tell Hallerman that "knowledge" could help make the decision to deploy BT much easier. What if a grading system for the technology were developed: a J.D. Powers ranking system for BT platforms? Companies like AudienceScience, Akami, BlueKai, Dotomi, Tagman, ValueClick and others building the platform would have to provide much more details on their systems. You could back it up with a university to support the research.

Hallerman also reminds me that J.D. Powers relies on consumer opinion. Could I get advertisers who already use the platforms to give me their unbiased opinions, and integrate them into a rating system?

Developing an objective quality score means digging into companies offering a BT platform, but not allowing them to finance the research. Since social media thrives on multiple points of view, advertising and marketing professionals using the platforms would have to provide feedback. This would help provide a complete picture.

In that rating system, you might find companies like Google, Microsoft and Yahoo, as well as Unica Search, which Unica created after reporting the acquisition Monday of MakeMeTop from Microchannel, a privately held U.K.-based company.

Unica Search will become part of the Unica OnDemand product line that includes a software as a service (SaaS) marketing suite with search marketing, Web analytics, customer analytics, email marketing, behavioral targeting, campaign management, and marketing operations.

It's a business model I have discussed with some of you after tossing it around in my head for a better part of a year.

Hallerman says companies need to look at BT as part of a larger process in a campaign. BT has an important place in the strategy, but "other methods still have a good shelf life," he says. "Know your goals. It's not to target, but rather to reach someone with an ad they will find interesting and relevant at the perfect moment. Review brand goals and develop creatives that work at different stages in the strategy."

The Internet has made targeting consumer by behavior much more complex, Hallerman says, so winning at the game takes more work.

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