• by Omar Tawakol , June 11, 2004

I'm sure it seems odd for an inaugural column like this one that's supposed to focus on behavioral targeting, to lead with a discussion of contextual advertising. However, since many of the questions about behavioral targeting stem from misperceptions about contextual advertising, I decided to address the issue head on.

When an advertiser pays five times the price of run-of-site to buy a contextually targeted ad, what are they actually paying for? They are paying a premium for some combination of access to the right person or access to the right moment. It's simple, the person or the moment you choose. Here is an example to drive the point home. I am reading Parents Magazine in the hospital while I wait for my latest (4th) newborn girl to wake up. Next to an article about working moms there is an ad touting the McDonald's Happy Meal Toys. McDonald's is paying for that context because they believe either:

a) they will reach parents who will spend the money when their kids ask for a happy meal

or they believe

b) my wife will drop all that is in her hands at this moment and will run to McDonalds to buy a happy meal.

Though this example is extreme, I will try to present both sides of the debate:

Contextual Advertising Gets To The Right Person:

The historical value of context is that it tells you something about the audience. Airlines place advertisements in the travel section because they know that people interested in travel will be reading that section. Auto advertisers place advertisements on car comparison sites because a person configuring a car may be in-market for a car for the next several weeks. The value of the context is in knowing something about the person viewing the context, not in the person waiting to run out and buy. If that weren't the case, I'd recommend that advertisers stop all TV advertising immediately. Why? Because consumers don't click on the TV to book a flight, buy beer or rent a car. The majority of the money in TV is spent because advertisers know that by influencing the buyer they can influence the purchase. The time of influence doesn't have to be at the time of purchase.

Contextual Advertising Gets At The Right Moment:

The second argument is that contextual advertising commands a premium because advertisers want to get a person at the magical moment that they are ready to respond to or notice an ad. Advertisers believe that editorial adjacency, the context of the ad, provides that moment. This is the premise behind search. The problem with the premise is that search works because of the intent of the searcher. The searcher comes with the explicit intent to click but when a person is reading an article, they are there to read, not to click. So then, what will get the reader to notice an ad?

So is the value of context the person or is it the moment? Why do people pay more for a contextually placed ad? Given the facts above, I suggest that for most advertisers, context's value is in getting the right person.

So what does this all have to do with Behavioral Targeting? Well, Behavioral Targeting is essentially the "person" component of contextual advertising on steroids. Once you free yourself from the constraint of "the moment" you can do some pretty amazing things, like add, multiply, and subtract contexts. For example, instead of having an editorial section on Asian Travel that would appeal to an Asian Airline, you can add contexts by capturing readers who have read about travel and also about Asian business. If you wanted to separate out the heavy business traveler from the casual traveler, you could multiply contexts by getting readers who read more about travel than the average travel reader. The possibilities for combining contexts in order to better understand a reader's desires and interests are boundless.

So there you have it. The primary value of context is in the information about the person that it provides, and that focus on getting the "right person" is where the value of Behavioral Targeting begins.

Omar Tawakol is senior vice president of marketing at behavioral marketing firm Revenue Science.