• by Joe , Paul Lewis , March 18, 2005

Behavioral targeting (BT), a practice of "finding" potential customers (or segmenting users into large clusters of likeminded consumers) based on their online activities can seem very complex when you first hear of it. For many advertisers, another technological concept can seem daunting - acting as the proverbial straw that breaks the camel's back. Fortunately, this challenge can be simplified by separating BT logically into two views: macro or micro, making it easier to comprehend and much less insurmountable.

Micro-view: BT within a Web site Presently, tracking user behavior within a single Web site destination is the dominant way advertisers are employing BT. Web sites that employ BT tend to be portals or other types of information aggregators that have multiple "content" channels. If a Web site has only one type of content, then tracking users' behavior history would have little meaningful value.

Peter Naylor, senior vice president of sales at iVillage, a popular women's content portal, explains it this way, "At iVillage we have advertising categories such as run of network, run of channel, and run of a specific page. Many times [contextual] advertising for a specific channel or page will be in high demand, escalating prices and reducing availability while another channel, such as horoscopes for example, will have plenty of inventory. If we can give an advertiser ad impressions for people who recently visited the desired channel, say beauty, but are now visiting the horoscope channel, they still fit the target market more precisely than simply a run of network ad."

In fact there are three definitive reasons advertisers should consider BT advertising within a site: 1) Price - often equal to or less than channel or contextually-placed advertising 2) Reach - when channel/contextual ad inventory is limited, BT serves as a great alternative to reach your target audience, in less cluttered parts of the site 3) The Clutter Factor - your ad for golf clubs stands out in the business section but might be lost in a golf section. With BT you get the best of both worlds, stand-out ads in other site channels that only display to people who recently visited the golf section

Macro-view: BT within a network of Web sites Looming on the horizon is the growing battleground of BT ad networks. BT networks can consist of both portal type information aggregators and single purpose sites alike. Unlike BT within a single Web site, the user's behavior history across numerous sites would result in a much richer profile of the individual (even without personally identifiable information) and more precise targeting for advertisers. These sites all tap into the same behavioral marketing platform and leverage their combined numbers and insights to create a mesh that allows for a much broader reach.

Dave Morgan, CEO of Tacoda Systems, explains, "One of the primary benefits of using a network for BT is simplicity, since you only deal with a single network provider rather than negotiating with each individual site publisher. You also benefit from the broader reach that a network can provide." Tacoda, an established leader in behavioral marketing software for individual websites, will be unveiling its own behavioral marketing network in April of this year with their Tacoda Audience Network.