• by Laurie Sullivan  @lauriesullivan, July 21, 2010

Rocket Fuel has developed a formula to lower cost per action (CPA) and engagement metrics by an average of 43.75% compared with other targeting methods. It built custom campaigns combining BlueKai data based on specific audience models using key metrics to serve up ads in real-time with its own suite of targeting algorithms, analytics, expert analysis and real-time impression-level bidding.

The campaign, designed for an unnamed consumer packaged goods company, focused on indentifying in-market audiences that could scale as needed. Rocket Fuel simplified the problem through rapid testing and automation of multiple kinds of data to target the correct audience.

Tapping into this model to combine technology with data brought success to automakers, retailers, consumer packaged goods (CPG), and those in the travel industry. "It's not just about one sector or one kind of metric," says Richard Frankel, president of Rocket Fuel. "Direct-response marketers have one type of metrics, and brand and packaged good marketers have another."

Alex Hooshmand, senior vice president of global product and operations for BlueKai, says it's the combination of market data and technology -- not just any data, but high-signal data, intent and in-market data across a variety of verticals. Both companies, founded about three years ago, discovered a combined formula to make online ad targeting work well. BlueKai, an auction marketplace, offers data on more than 200 million unique consumers, and manages more than 750 million data events daily.

Using BlueKai data, Rocket Fuel achieved a 64% lower effective cost per action (eCPA) for companies in the auto industry, compared with other targeting methods. The actions where the companies gain the most might include when consumers got a price quote, downloaded a brochure, configured a vehicle or scheduled a test drive.

Retailers achieved a 24% lower eCPA when driving traffic to an online store or driving in-store sales. Companies in the travel industry gained a 37% lower eCPA, compared with other targeting methods, when consumers booked a hotel room or airplane flight. CPG companies cut engagement costs in half when it came to increasing brand favorability, downloading a coupon, watching a video or spending time on a landing page.

A recent benchmark study by PreferenceCentral to assess consumer attitudes toward targeted online ads reveals that awareness of behavioral targeting made 29% less comfortable, but becoming educated on the topic eased concerns for most.

It's not rocket science, but for the advertising industry it might come as close as it gets. The Rocket Fuel name originated from Frankel's three-year stint after college at the National Aeronautics and Space Administration (NASA) where he worked solving flight problems related to Space Shuttle landings. "In 2010, we're solving problems less related to life and death, but in many ways they seem more complicated," he says. "Many of the techniques we used to automate controls in the Space Shuttle are the same type we use at Rocket Fuel. We're actually reusing these techniques never before used in online advertising."

Those techniques known as "controls" help the platform make a decision on its own. The technology recognizes an event and responds without manual instructions.