• by David Ward , July 23, 2003

With online still only getting on average one to three percent of media dollars - even in an integrated advertising campaign - you might think that the prospects for Internet marketing have changed little since the dot.com collapse of a few year ago.

But a lot has been going on just under the radar. Up to now, most advertisers have run Internet-based campaigns for direct response capabilities that online provides, but a host of companies are offering new tools that allow for the sort of audience segmentation and demographic targeting that has long driven traditional, offline brand awareness advertising as well.

The result is an almost unprecedented ability to gather information about an audience, which is taking some of the guesswork out of online media buying and planning, and enabling agencies to create detailed, compelling cases to get traditional brands back online.

"In many cases the media planner will tell us I want as much data on a given audience as possible - demographic, behavioral, attitudinal - I want it all," says Karl Siebrecht, vice president of strategy and product management for Atlas DMT. "They want to be very granular, and the Internet can help them do that."

A lot of this wouldn't have been possible without several pieces falling into place, most notably the maturation of the Internet as a medium. "There's no question that both the Web as a whole and individual sites have stabilized," notes Douglas Knopper, vice president and general manager-online advertising at DoubleClick. "There are studies out there that find that the average person doesn't go to more than 10 or 12 sites in any given period of time, and that makes sense. There was a lot of experimentation going on in the early days, and there's a lot less of that now."

With that stabilization has come the realization that the overall online audience doesn't differ that much from consumers for television, print, and radio. "There can be some cases where it can skew a little bit more affluent and a little bit younger, but the entire Internet population is reaching a point where it is approximate of the US population," says Amy Auerbach, associate media director for Euro RSCG Circle.

This in turn has enabled companies such as DoubleClick with its MediaVisor program, Atlas DMT, and Mediaplex, to develop the tools and technologies that allow for what essentially are "apples to apples" comparisons of online and offline audiences, as well as advertising campaigns.

"When Internet media was a new thing, people realized that super-sophisticated targeting was suddenly possible, and you could then reach very narrow demographics or behavioral segments," explains Siebrecht. "The problem was a lot of people got ahead of themselves and, instead of starting with the basics, they started with crazy, super-sophisticated new stuff that a traditional media person couldn't process. Their world is women aged 18 to 49 - the type of demographics you could buy on TV."

Part of the recent efforts by Atlas DMT, DoubleClick, and others have been on tools that allow online campaigns to be framed, through use of the same metrics and terminology, in ways that are easily understood by traditional marketers.

"There has been some resistance to companies using online in the traditional advertising sense," says Greg Pomaro, group media director at Exile on Seventh. "That is due in part because it has sort of its own language, and there's this layer of technology that pervades everything that happens online. Companies don't have to deal with that in, say, broadcast, where your entire creative decision is basically, are we going to do a 15- or a 30-second spot. We have to make sure that we're giving a common frame of reference, so we can discuss a range of media choices in somewhat more common language."

With these tools in place, online media buyers and planners can then take advantage of what the Internet does best, which is to enable the gathering of huge amounts of information about an audience, and then combine that with technology that can deliver ads relevant to any consumer's interest. "What all this leads to is contextual ads delivered to a finely defined demographic," says Knopper.

In many ways the tools are already being rolled out to enable what amounts to the next step in contextual advertising. An example is a consumer who visits a website and clicks on an article about the CIA headquarters. In a static contextual scenario, that may trigger a banner ad for an espionage-related movie, book, or TV show. But if you had gathered historical data on that visitor, and knew that his interests were more likely to be government spending, or northern Virginia commercial real estate, or even simple acronyms, you could change the ultimately delivered ad accordingly.

These are admittedly uncharted waters, and not everyone thinks the advertising community is ready for it, especially given that some of these tools carry with them some "Big Brother"-like implications. But Atlas for one already has a tool that allows advertisers to gather information on where your best potential customers tend to gravitate online, which can then give you great insight into their interests.

"Basically you put these action tags (commonly known as "cookies") on the 'landing pages' you're trying to drive traffic to and then, after a while, the cookies collect information on where those people who've visited that landing page tend to visit," explains Greg Brown, managing director with FCBi Seattle. "So in theory, you kind of build a profile of the people that run to those sites, being that they they're going to have a higher tendency to visit your (client's) site.

Brown and others note that while this information is gathered in aggregate, and doesn't necessarily give an agency and its clients access to each individual's specific online movements, there already is some concern about potential privacy issues. "Atlas has done a pretty good job of presenting this on paper, and so we're going to test: number one, what kind of return do we get and number two, what are the privacy implications?" says Joe Giannantonio, analysis director for Exile on Seventh. "For a direct marketer, this approach could be a way of reaping higher returns on your investment dollar, but in terms of the efficacy relating to privacy by both the publishers and individual, it's going to be more of a challenge to promote that kind of marketing."

But media buyers and planners don't have to rely on their own tools and technologies to better segment their audience. Even though most are vigilant about respecting their audience's privacy, the publisher sites themselves have been increasingly aggressive about using opt-in surveys and online subscription forms to better segment their users. Led by the NewYorkTimes.com site and others, these sites are building vast databases on their users, and are just now beginning to offer up this information to media planners, so they in turn can craft campaigns that target particular segments within that site's audience.

"There is a growing consciousness that (the sites) have got to be proactive in audience management and audience segmentation if they are going to meet the needs of advertisers and agencies," notes Dave Morgan, CEO of New York-based Tacoda Systems. Tacoda provides tools that enable publishers to integrate information on their audience from a variety of sources, including web servers, ad servers, opt-in registrations programs, and commerce systems, as well as from offline databases. The company works with the sites to analyze that data and segment out their audience accordingly, and then hands that information off to the publisher's ad server, email server, or whatever else is needed to deliver a marketing program.

Morgan agrees that there is a need to come up with a common framework that enables brands to compare offline and online ad programs. But once that's in place, he argues, the sites themselves can then take the leading role in segmenting out their audience and present target groups to advertisers, since they've already established an ongoing relationship with their users.

"The agencies only get to segment what they've already bought, but if the publishers manage the segmentation, they can deliver to the advertisers the exact audience that they want," Morgan says. "They can deliver say, one million young women twice a month, and actually give them 100 percent audience composition of those people, as well as measure the results for them."

Once you've gathered all this information on your audience, it's then up to the media planner to figure out what information can be used for direct response, which the Internet has always excelled in, and to help determine what should be factored into brand-building, reach and frequency media buys. "We haven't found that demographics are a very good indication of purchase," says Andy Sims, media director at SF Interactive. "Now, from a brand perspective where you're really concerned with moving large groups of people to think about your product, demographic targeting becomes very important."

Above and beyond audience segmentation tools, Atlas DMT, DoubleClick, Mediaplex, and a few other smaller players also offer software products for everything from putting in and tracking insertion orders, to real-time measurement of a campaign's ongoing effectiveness. So it's tempting to think that online media buying and planning may eventually become a bit of a plug-and-play job. You simply put in your client's demographic target and campaign goals, and out pops the sites you should be advertising on, as well as the recommended media spend.

But the interactive media directors we spoke to stress that these new technologies are what they are, simply tools. "These planning tools allow us to hedge our bets up, particularly when it's a new target for the client or a new client for us ...and then we can get a direct experiential read on what these tools tell us," says Giannantonio. "The tools may tell us that Yahoo! is a great place for the target, but we can never get a rate that will make it pay out for us."

Jordon Hirsch, media supervisor with Earthquake Media, adds, "Your clients have to know that you're looking at things creatively and from a different angle than a computer that's just going to spit out numbers. For one thing, some of the categories they have may not be as individually 'cookie cut' as some clients you may have. A lot of programs may end up picking the top five [websites], but sometimes as an adviser, you don't want to go to the top five. You may want to go to another site that is outside of the top five, in order to dominate that space with rich media and other things."