Why Media Execs Shrink From Behavioral Targeting: Part Three In A Three-Part Series
- by Steve Smith @popeyesm, November 3, 2005
Behavioral targeting, or customizing ads based on people's Web-surfing habits, is every bit as complex as it sounds. And that complexity makes it particularly hard to market, even to sophisticated media executives.
Sales forces for companies like Revenue Science and Tacoda tend to address the same questions over and over: what it is, how it works, how quickly it can be implemented, and how it scales for efficient buying. Those questions don't lend themselves to easy answers; behavioral targeting, or BT, is the kind of idea that is a lot easier for agencies to accept in theory than to execute.
"There's a ton of merit to BT, but you also have to be pretty thick-skinned to sell it," says David Berkowitz, director of marketing, Unicast.
"You can't be a pioneer unless you are ready to take a lot of arrows," adds Dave Morgan, CEO, Tacoda.
Despite the difficulties, BT seems to be growing this year. Advertising.com, which offers BT on sites and across its ad network, reported an 80 percent year-to-year rise in revenue from its behavioral programs in the first quarter, while Morgan estimates that his client base and revenues increased four to five times this year.
However, BT still represents a very small share of the online ad spend--as low as 5 percent, according to some estimates. "What we're doing in BT," says Morgan, "isn't any more than the flea on the tick on the dog."
One reason for the resistance is that the platform itself is obscure. "There's a creepy feel to it," says Berkowitz. "There's a lot of stuff that goes on behind the scenes, and so it still feels like a black art."
Another frequent complaint is that it's not a good fit with the last-minute budget allocations media buyers often manage. Too many RFPs come back to clients with minimal detail about the depth available from the audience segments, which take time to build. "It's a lot of work," says Steve Governale, director of search, Starcom IP--who has worked with Tacoda, Revenue Science, and Yahoo! on BT campaigns, and has concluded that BT works best with longer planning cycles. "It's got to be something you have the time and resources to put into."
Also, buyers tend to think of purchasing media in terms of scale, but BT sells audiences and people with specific attributes rather than pages and exposure. "The common language of the media buyer is reach, frequency, GRP," says Scott Eagle, chief marketing officer at Claria. Behavioral targeting, he says, "was a really hard sell; it was a different metric."
Bringing Segments To Brands
Leaders in the behavioral marketing companies have been absorbing the complaints and figuring out how to address them. At Revenue Science, the company's approach now is more "results-oriented" than "evangelical" says Nick Johnson, SVP of sales and business development. His company's "5-Step Service" was designed to identify the goals of a given campaign and turn around a specific plan within two weeks. "Their planning window is very small, so we try to get out ahead of that planning cycle," he says.
Morgan adds that BT executives need to bring undiscovered audience segments to brands rather than wait for the brand to decipher the platform. For instance, Morgan's wheels are always spinning new behavioral segments for advertisers before they ask for them. Toyota recently announced plans to sell one million hybrids by 2010, he recalls. What the brand might not know--yet--is that Tacoda's research shows that people who frequent edgier personal tech sites index ten times higher on hybrid passenger vehicles than average. "We're certainly going to talk to them about that," he says.
When agencies complain that BT lacks scale for significant media buys, BT executives respond that targeting a relatively small number of likely purchasers is a better use of ad dollars than blanketing the Internet.
The scale might be small, but BT does not lack for ambition. The heads of both Revenue Science and Tacoda maintain evangelical fervor. "It will become like a dial tone," says Morgan. "Every advertising campaign delivered through digital--whether on the Web, e-mail, RSS, mobile, IPTV--will have a contextual targeting component and a behavioral component. Even campaigns that don't will be measured that way."
But, like many missions, there is more agreement about the theory of BT than its practicality. Governale echoes many media planners: love the concept, wonder about the execution. "I think the idea of buying ads based on consumer behavior is where we are heading directionally. I do think it has a tremendous future, but there are real scale issues. I don't know the degree to which they can be resolved. That will continue to be a barrier."
