• by Ross Fadner , June 10, 2004

Publishing clients of audience management firm Tacoda Systems shared their experiences using the company's audience segmentation methods at an intimate gathering Thursday in Manhattan.

The case studies, which were all positive, shared one underlying theme: behavioral targeting is most effective when publishers bring their own pre-existing data to the table. Even the most basic demographic and geographic information facilitates the process, and makes the media buy that much more effective for advertisers and publishers.

A spokeswoman for USA Today noted that in order to sell Tacoda-enabled inventory, it was necessary for the Gannett Co.-site to combine its user registration information with Tacoda's behavioral targeting audience management program. She explained that Tacoda-enabled campaigns were only effective after taking this step.

Robert Paltos, national advertising sales manager, Belo Interactive, said his clients also used Tacoda with audience information gleaned from a registration questionnaire, which he said made the audience segments that much more valuable.

In fact, to prove the effectiveness of audience segmentation, Paltos said that Belo challenged a local Southern California Mitsubishi dealership to run an audience-targeted campaign on DallasNews.com, a member of Belo's network of 34 Web sites. The response rate for people who saw the ads outside of an automotive-related site was 7.7 percent, which is about 20 times the national average of .33 percent. The results also showed that the campaign generated 44 percent of all inquiries to the dealership at a time when 8 promotions for the dealership were running in other media.

Peter Naylor, vice president and general manager of sales at iVillage, remarked that Tacoda also combined well with contextual marketing initiatives. Snapple ran a campaign for a new meal replacement health drink that targeted the site's diet-conscious women through Tacoda's system. The initiative's reach was extended by displaying the same ads on iVillage's health and diet pages. Naylor noted that ads delivered to the segmented audience outperformed contextually placed messages.

Another successful behavioral targeting initiative on iVillage involved a high-profile beauty and cosmetics brand. The initiative was designed by both the marketer and iVillage in order to elicit declared interest information from iVillage users. Women took a 20-question quiz that would tell them which hair color best suited their personality. After nearly 75,000 completed questionnaires, Tacoda was able to partition this large group of women into one of five audience segments. Both iVillage and the client were very satisfied with the results, which were not disclosed.

Jim Warner, president of AvenueA, New York, one of the main speakers at the annual Tacoda event, noted that sharing data is the key to producing successful behavioral targeting campaigns. From an agency perspective, Warner urged publishers to share their data so that agencies can match clients to the data publishers give them about their audience.

Warner and Tacoda CEO Dave Morgan were the event's main speakers, and both noted that in order for online advertising to command between 15 and 20 percent of the total media spend, the industry needs to leverage its trump card--analytics and data management.

Warner said that AvenueA's emphasis is now on technology and analytics, because clients demand them: "We focus on doing a lot of little things really well, and this helps us the data as a competitive advantage," Warner said, adding that the agency places a "laser-focus" on measurement. Advertisers tell AvenueA: "I need volume, not awareness; I need measurement; I need productivity," he noted.

"We know that if we want premium pricing, then we have to deliver numbers and results," Tacoda's Morgan said, and he also acknowledged how precious the audience data is to the company's publishing clients. "Tacoda does not own [publishers'] consumer data and will not own their data--it belongs to the publishers," he said, adding that this will be an area of controversy in the future for behavioral targeting firms and their clients.

Morgan says that Tacoda is trying to make its services more scalable, which has been a major area of concern. In the future, he said, "simply, easily, and repeatedly" will be the mantra--"It's about more than saying, 'I can give you 48 people that are going to knock your socks off,' because most advertisers want 480,000," he said.

Another key problem, Morgan noted, is that there is currently no standard for what constitutes a "behavior," and what constitutes a "category," or segment, in the behavioral targeting sector. Currently, Tacoda leaves that up to the publishers, but advertisers would like to know in advance what the set standards are that constitute behaviors and categories. Morgan quickly pointed out that Tacoda is actively involved in pursuing this area. He mentioned that Tacoda is "starting an initiative for standardization both for category and duration," although he didn't elaborate further about the initiative.