• Ad Age, Monday, January 5, 2009 11:30 AM

Behavioral targeting can be something of a double-edged sword for publishers, Ad Age's Michael Learmonth explains. When a user visits a site like Edmunds.com, he or she instantly becomes an "in-market car buyer", a valuable asset, but one from which Edmunds.com might not necessarily benefit. Like most Web publishers, Learmonth says that Edmunds doesn't participate in the "mini-economy that flourishes after visitors leave" their site. Instead, "a host of ad networks will sell that 'in-market car buyer' to advertisers at a fraction of the rate, thereby increasing ad inventory while driving down ad rates for Edmunds, KBB.com and other sites like it."

The same story is true for other publishers who, by hosting users who demonstrate an interest in their products, create a profile that is eventually used by a third party network that packages and resells audiences at lower prices. As Learmonth says, publishers have long viewed this universe of networks and targeting firms with "unease", in a similar manner to the way they compete with portals and news services that aggregate their content.

Per the latest estimate from Barclays Capital, display growth is set to increase 4% in 2009. Near-flat growth means that myriad venture capital-backed networks will be competing for available ad budgets. Can all of them survive? Meanwhile, Learmonth notes that even agency holding companies like WPP and Havas are buying up inventory and repackaging it using behavioral data to target ad dollars.

Read the whole story at Ad Age »