Search Engines Prepare For Behavioral Targeting: Part One Of A Three-Part Series

We're all used to patting down Google, Yahoo!, or MSN for relevant information, but what if they started frisking us first? What if the search engines we've all come to rely on started examining our online activity, or our frequently searched terms, and used that information to determine--say--how close we were to making a purchase, and which brands we were considering? Would marketers pay for such information? If so, how much? Would consumers accept this degree of targeting, or would they resist it as an invasion of privacy? And will search marketing, which has worked so simply in the past, be able to absorb this new level of complexity?

This week, OnlineMediaDaily presents a three-part series that explores the future of behavioral targeting. Today's installment examines the upcoming entry of search engines into behavioral targeting.

Advertisers already pay to match their automotive ads with searchers typing in "cars," but what if the engine also figured out which searchers were the potential high-end buyers--more likely to respond to a pitch for Lexus RX than for a Chevy Cobalt?

The prospect raises a host of questions: How much more would marketers pay for this level of intelligence? How, exactly, would search engines provide such information? And, assuming the technology exists to glean this level of detail, will consumers acquiesce?

We may know some of those answers sooner than you'd think.

MSN's adCenter already has the ability to target contextual ads by demographics, geography, and day-parts. By spring of next year, MSN intends to add behavioral segments to the mix.

Meanwhile, at Google, recent privacy policy revisions--along with a patent application for "results based personalization of advertisements in a search engine"--suggest that it, too, is considering incorporating user profiles and activity history into content and ad targeting. AlmondNet recently received its second patent for delivering behaviorally targeted ads via its own engine. And adware provider Claria put into alpha testing its Vista Marketing Services platform, which personalizes search results and ad delivery according to a user's previous post-search behavior. Yahoo! also has a product, Yahoo! Impulse, that allows targeting of its display ads within its content network based on a user's very recent searches.

MSN's plan to fold behavioral targeting into the wildly successful contextual text ad marketplace raises the bar even higher on targeting and pricing.

Microsoft hasn't yet outlined the specifics of the plan, other than to state that the company "will provide advertisers with the audience intelligence to help them more precisely identify their target customers and manage their campaigns."

The company is promising unprecedented "transparency," giving ad buyers more direct views of actual MSN audience data in order to make ad placement decisions based on several targeting considerations that are new to search.

adCenter's behavioral piece will join other targeting options, including by geography and day part. The engine can apply several filters, so that the choice of ads on a result page could become highly individualized. adCenter is premised on providing marketers with that level of individualized results, says Forrester Research analyst Charlene Li. "If they know I am in the market for an SUV or a hybrid, then ideally those ads should show up," she said.

The question for marketers becomes, how much more will they pay to know the person they are advertising to visited--say--the SUV pages of MSN Auto before typing "cars" into the search box? Rather than buying ads against words and context, you are buying against people and their likely habits. "What adCenter is doing already is changing the game," says Li. "You can already target day parts and geography, and now add to that behavior."

Media buyers are likely to pay a percentage premium on top of their keyword price to get these additional layers of targeting.

Behavioral targeting itself, long on the periphery of online advertising, could move center stage with the entry of majors like MSN and Google, says David Berkowitz, director of marketing, Unicast. "It absolutely legitimizes BT. It becomes one of those things that is part of an interactive buy. It forces education."

Rising Complexity That education likely will be necessary. Behavioral targeting already suffers from a fuzzy definition and myriad competing methodologies. Adding it into the search mix could initiate yet another round of feature wars and rising complexity among the major engines as each tries to differentiate its method of accurately determining behavior as well as helping buyers manage more complex campaigns. While details of MSN's approach are scant, it appears that adCenter will profile user behavior based on recent content browsing patterns within the portal's collection of sites, and use evidence like multiple searches on the same term to indicate behaviors such as the level of purchase intent.

Google, which does not have MSN or Yahoo!'s content networks, or their volume of registered, profiled users, may rely more on harvesting profiles from the myriad client-side applications (desktop search, GMail, toolbar, etc.) it has been pouring into the market in the past year. In its new patent application, Google indicates that its profiling mechanisms could be embodied in desktop programs.

BT-enabled search brings--into an otherwise straightforward world of search--new methodological debates. For instance, adware company Claria hopes to sell engines and portals on the superiority of its own client side solution, an always-on toolbar or desktop tool that assembles richer profiles from the full range of user behaviors rather than activity occurring within a site or portal. "If you only rely on site-specific information, you don't see over 95 percent of people's interests," says Chief Marketing Officer Scott Eagle.

This sort of denser profiling ultimately could distinguish a high-end business traveler from a student hostel-dweller before she puts "China travel" into that search box. A BT-enabled engine would know whether to serve her an ad for the Beijing Hilton or CheapTickets.com. "We believe the next quantum leap is understanding what people do and how they act when they search," says Eagle.

Rather than build a new search engine of its own, Claria is actively looking for big partners that could take its software to sufficient scale. In fact, according to reports, Microsoft looked to acquire Claria several months ago, but ended discussions because of possible PR backlash from buying an adware firm. Eagle would not comment on Microsoft's interest and whether it included Claria's search solution, but the thwarted courtship is yet another sign that incorporating BT into search comes at some risk to trusted big brands.

Promising? Yes. But there is enough confusion surrounding BT's techniques, execution, and privacy implications to make it a dicey addition to the simple, familiar search ad buying process. "It's going to open up a slew of new questions," says Berkowitz.

Also, although search has been wildly successful in these last few years, one of its major advantages has been its sheer simplicity. Adding behavioral targeting elements into search marketing is far from simple. "It removes the KISS element which has worked so well in search," Berkowitz says.

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