Behavioral Targeting: Not Quite Ready For Prime Time

by Tameka Kee, Jul 25, 2007, 6:00 AM

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The prognosticators say 2008 is supposed to be the year behavioral targeting hits it big in the U.S.--reaching the $1 billion mark in terms of online ad spend, according to eMarketer.

But at the Behavioral Marketing Forum Tuesday, it was clear that obstacles exist ranging from definition to education.

"Behavioral targeting is any method of targeting a consumer after they've taken any kind of measurable action," said Carrie Frolich, digital practice lead, Mediaedge:cia. "And it's not only online."

Joe Weaver, associate media director, Media Storm, added: "It's not a line item on an Excel sheet. Behavioral targeting is a strategy."

Advertisers are also struggling to find metrics that can justify the premium prices for behaviorally targeted ads while providing quantification of ROI at the same time.

"We have to explain effectiveness in terms of traditional buying metrics like GRPs," said Frolich. The panelists said that sometimes those metrics don't fit if the desired outcome is engagement or brand awareness.

Developing effective behaviorally targeted creative also poses a challenge, as it often requires customization that may be out of a client's budget, or simply out of their capability because it involves conversation.

"Clients are starting with the message and that doesn't work for behavioral targeting," said Mark Egan, group account director, MediaContacts. "We need to start by examining the behavior, and then coming up with the creative that fits."

The panelists acknowledged that these widespread differences of opinion span advertisers, agencies and content publishers--hindering more robust uptake of behavioral targeting in online advertising.

For example, a recent Jupiter Research survey found that only 16% of advertisers have used behavioral targeting in the past year, compared to the roughly one of every three that have used geo- or contextual targeting. And while almost 20% of ad executives surveyed said they planned to use behavioral targeting next year, it's more of a focus for agencies, not their clients.

However, when asked which strategy would have "the greatest positive effect(s) on planning and implementing online advertising," 25% of brand marketers ranked advances in content targeting ahead of advances in behavioral targeting.

Current advertiser spending seems to reflect this perception, as publishers at the forum said only 2-10% of their overall revenues came from the sale of behaviorally targeted ads or information.

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