• by June 12, 2007

Predicting that U.S. spending on behavioral targeted online advertising will nearly double in 2008--from $575 million this year to $1 billion--and nearly quadruple to $3.8 billion in 2011, eMarketer's new report, "Behavioral Targeting: Advertising Gets Personal," nonetheless concludes that "more development is needed before it is a fully mainstream marketing method."

One thing that's needed is the development of more analytical technologies that go beyond one-to-one relationships, the report's author and eMarketer Senior Analyst David Hallerman told OnlineMediaDaily.

"Instead of an assumed direct correspondence between consumer actions and preferences," the report states, "target audiences will be identified based on subtler and more effective extrapolations from behavior to intent."

Hallerman pointed to an example in the report from Dave Morgan, chairman of Tacoda: "These methods can determine that if you're looking at reviews of romantic movies, and you live in an urban area, you're likely to rent a car that weekend."

The report says ad networks will be vital for advertisers to get behavioral reach, helping more and more publishers monetize their "long tail" pages--their non-premium or remnant inventory. And that will help behavioral's share of total online ad spending grow from 2.6% this year to 8.4% in 2011, and its share of display and rich media spending grow from 8.9% to 25.8%.

eMarketer's latest projections for behavioral ad spending are actually below those it made last year--because the analyst firm has removed adware-generated targeting from its model due to privacy issues.

But Hallerman said it is unclear how much privacy concerns affect the average Web user. What his research did reinforce, however, was that individuals are still greatly receptive to "ads pegged in some ways to their interests."

Behavioral advertising, Hallerman said, has been particularly effective in two areas:

1. When marketers are "trying to establish a brand."

"Behavioral is for those with a product introduction," the report quotes Matt Straznitskas, a senior partner at Mediaedge:cia's MEC Interaction, as saying, "because behavioral targeting identifies areas of passion among users."

2. For "retargeting," which Hallerman compared to a follow-up sales call, "exposing consumers to an ad related to the products they had been investigating after they leave a retail site."