• by Joe , Paul Lewis , May 13, 2005

A number of challenges have dogged the growth of behavioral targeting in the past. First and foremost, perhaps, has been privacy concerns. Lack of detailed standards or laws (especially from the naturally global perspective that is the Internet) created a bit of a "Wild West" setting with players taking positions everywhere from Marshall Dillon to Black Bart.

Layered on top of this western backdrop is the challenge of BT's added complexity and the requisite advertiser and publisher education necessary to overcome it. Nevertheless, these challenges alone would not have stalled BT adoption rates as much as they have if it weren't for the third factor - an online ad buyer's market. Reeling from the dot-com boom and bust, the online advertising market has been on the ropes. Most advertisers didn't tackle the privacy and education hurdles that come with BT because, quite simply, they didn't need to.

This year, however each of these boat anchors slowing BT adoption are losing a great deal of their previous weight and key influential factors are fueling the growth of this nascent segment into the marketing mainstream.

First, acceptable "behavior" for tracking consumer behavior is becoming clearer and more accepted by advertisers, publishers, and even consumers. A recent study conducted by the Penmen Institute showed 45 percent of Internet users were willing to provide additional personal information if they would receive ads more targeted to their individual interests.

Second, education has become a priority. Behavioral Targeting software companies are focusing their attention on providing the education to agencies and publishers necessary to understand the depths of BT.

Finally, online publishers have begun to rally. Sold out contextual inventory and rising rates have delivered a wake up blow to advertisers. Furthermore, this trend isn't fueled by the wild dot-com venture capitalist of yore. This time, the money is from seasoned professionals with advertising powerhouses often tripling their online budgets. Armed with detailed studies and declines in traditional results, the gloves are off and competition will become fierce. We have already seen the effects of this online advertising arms race in paid search, BT's simpler cousin. Now advertisers will be carefully looking for solutions that gain them even a few percentage points over their competitors. Enter BT.

Brought to my attention was a recent study on BT for FT.com and NTT DoCoMo conducted by Dynamic Logic, an independent third-party marketing effectiveness research company. NTT DoCoMo wanted to use BT to target FT.com's audience of international C-level decision makers. The campaign achieved the following awareness metrics compared to standard run-of-site advertising control groups:

Awareness Metrics

(Percentage of Awareness by Audience Type)

Note: Differences in performance between BT and ROS groups may also be due to differences in audience composition.

Source: Dynamic Logic AdIndex Oct-Dec 2004 n=723

I followed up with Shauna Monkman, vice president of global online ad sales for the Financial Times. She explained that BT's clear value has led to it being added to their standard rate card and she expects to see many more BT ad deals in the near future. I think she is right, with FT.com currently only charging a 15 to 20 percent premium over run-of-site ad rates, it is a great value given the types of results shown in the study.