Liars or Leaders?

by Scott Howe, Nov 11, 2004, 12:00 AM

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A recent tour of this week's Ad:Tech New York exhibit hall uncovered an amazing statistic. Of the 152 (by my count) agencies and vendors touting their capabilities, an astounding 47 percent claimed to offer some sort of sophisticated online targeting capability.

Even more amazing, most of them are telling the truth. But while 72 companies claimed to offer some sort of targeting, many of them have conflicting definitions of what targeting really entails. With a dizzying array of choices, technologies, and partners, an advertiser can quickly become overwhelmed.

Making Sense of the Mess

Even a partial list of commercially available targeting variables illustrates the complexity of the space. Targeting variables can be categorized into three types of schemes: behavioral, demographic, and contextual. And even within categories, the menu of options can be confusing. Behavioral targeting based on past advertiser interaction typically draws from third-party ad serving data. DRIVEpm's Selector offering (which utilizes Atlas DMT) can utilize advertiser-based targeting. Google offers text-based Web media advertisements linked to a surfer's past searches. And many major publishers (often utilizing technology platforms from Revenue Science or Tacoda Systems) increasingly offer targeting based off of a user's past surfing behavior on that publisher's site.

But What Works?

The best news for advertisers: any of the targeting schemes can work if properly designed. And combinations that utilize several targeting variables can be even more effective. Four recent targeting campaigns each generated substantial performance lift relative to untargeted campaigns. But best results were observed in a campaign that actually utilized combinations of several variables. By narrowly defining its target audience, the multi-variable campaign was able to generate lift in excess of 10,000 percent!

The Implication

Rather than focus on the myriad of targeting providers, leading advertisers should instead devote their attention inward. By taking the time to craft a thoughtful request-for-proposal that includes a detailed profile of its ideal customers, an advertiser can shift the workload to targeting providers. Proposal responses can then be judged according to the suitability and depth of proffered segmentation schemes and their subsequent ability to generate outstanding results for the advertiser. And given the sheer number of new targeting entrants - buyer beware. Make sure that you conduct credit checks, ask for references, and ensure that privacy and data policies are clearly and adequately documented.

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