Shining a Clear Light on Behavioral Targeting

by Robert Tas, Mar 11, 2005, 11:28 AM

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Everybody has heard of behavioral targeting by now, and most tend to think it's a good thing. But frequently, that's as far as it goes. Relatively few can say what the different types of behavioral targeting are, or even know that there are different types; and it sometimes seems that barely a handful understands exactly how they differ, or what this means for the various players involved. This confusion is a pity, and it will need to be resolved before behavioral targeting (BT) can reach its full potential. Thus, here is a quick stab at bringing much-needed clarity to the subject.

The most basic division of behavioral targeting is between publisher and advertiser side products.

Vendors offering publisher-side BT include Tacoda, Revenue Science, Accipiter, and 24/7 Real Media. Each supply publishers on a single site with tools that use anonymous cookie data to track content viewed by visitors, how frequently they view it, and when they last viewed it. Visitors are thereby allocated to pre-established interest-based segments, which publishers can offer to advertisers as behavioral targets.

Segments are adjustable to achieve the best balance of granularity and reach, and campaigns must be monitored and parameters constantly adjusted to achieve the best results for the advertiser: this means that experienced personnel must operate it, and that advertisers must get the data they need to make good decisions. While there is an obvious advertiser advantage in targeting specific groups, the primary benefits of publisher-side BT accrue to the publishers themselves: it helps them sell more inventory and, potentially, to do so for higher CPMs than for run of site impressions.

Publisher side BT is particularly attractive if premium inventory is sold out, when it can be offered to advertisers as an alternative route to otherwise inaccessible targets through inventory that might otherwise remain unsold.

Advertiser-side behavioral targeting anticipates future behavior by balancing knowledge of past behavior with real-time analysis of the user's current situation. Whereas publishers have steady streams of user data, advertiser-side BT depends on information about actual viewers of the advertiser's impressions. Campaigns with long runs are its main beneficiaries, as much of its precision depends on analysis of vast numbers of behavior samplings over time. While giving publishers a market for their inventory, advertiser side BT is mainly a tool to help advertisers maximize value by optimizing ongoing campaigns.

The third strand of behavioral targeting adds a network of sites to the mix. Networks, if large enough to generate segments of sufficient size, offer a huge advantage to advertisers, with reach and targeting precision that they would otherwise struggle to achieve. Network size is vital, however, as segments would otherwise be too small to offer adequate reach. As some of the players here are starting from scratch, it is unclear whether they can grow fast enough for success. Finally, there are BT vendors who also offer ad serving. A common misconception is that this is typical, whereas actually only a few vendors do provide both. The advantages to both publisher and advertiser are plain: instead of worrying about the compatibility of the BT software and the ad serving platform, it is a one-stop shop. The process is integrated with only one system and process for the customer to learn, rather than multiple ones, and one common methodology to count audiences and to report on.

Behavioral targeting has much to offer to both advertisers and publishers. But it is not an indistinguishable mass; there are enormous differences between the various vendors' products, and buyers should take care to ensure that they understand exactly what they need and which product will best provide it.

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