• by Ross Fadner , September 13, 2004

A battle is brewing between the two major providers of behavioral marketing database analyses for online marketers over whether and how to standardize classifications for Web users based on their online behavior. On Monday, New York-based Tacoda systems announced that it established basic guidelines for classifying Web users based on which sites they visit.

But a rival behavioral targeting company says it's skeptical that Tacoda's guidelines will yield useful marketing information.

Interactive ad shops have long requested that behavioral targeting firms define standard audience segments across their network of publishing partners, in hopes of assessing whether particular Web users are likely to purchase products.

Tacoda's system, called "Tacoda Targets," divides Web users into 22 marketing segments, including auto buyers, business, cooking and food, diet and fitness, golfers, job seekers, newshounds, nightlifers, parents, and sports fans. The targets are defined by recency--or how recently they've gone to a Web page that would place them in one of those categories--and frequency--how many times in a given time frame they went to the page.

Many other behavioral targeting firms have defined audience standards for their own systems, but have not reached a consensus about coming up with universal classifications for Web users.

Omar Tawakol, senior vice president-product marketing for rival behavioral targeting firm Revenue Science, noted that while his company is not opposed to the idea of a universal standard, it would rather see a standard that measures the output quality of segments for advertisers than define them by a minimum set of behaviors. He says that advertisers' number one concern is: "Is my audience at that site?" Creating definitions based on Web page views, he says, does not necessarily ensure this.

For example, he said a user who visits the car-related information section of a local newspaper is probably not looking to purchase a new automobile. Car enthusiasts who are not in the market to buy may visit info sites just to keep up to date on the latest industry news. With Tacoda's defined segments, an "auto buyer" is anyone who has visited an auto-buying, auto news and info, or auto lease site in the last 45 days. He says that advertisers would rather know that 25 percent of their audience is in-market to buy a car than know that they've been labeled as auto buyers by a system's minimum criteria.

Nevertheless, GartnerG2 Research Director Denise Garcia applauded Tacoda's efforts, saying that defining a minimum audience standard is something that "absolutely needed to be done." She said that the standards are an attractive proposition for advertisers who now have a common ground to start from when negotiating deals with publishers. Also, because the standards apply to all Tacoda clients, advertisers can expand their reach to make large-scale buys across multiple sites, according to Garcia.

Sean Finnegan, director, digital products for Chicago-based interactive shop OMD Digital, expressed a similar sentiment. "Without standards, it is difficult to plan and execute behaviorally targeted media-buys across multiple sites," he said, adding that defined segments will facilitate both the buying and negotiating processes with publishers.

Gartner's Garcia emphasized that audience standards primarily facilitate the conversation between publishers and advertisers, who often go into negotiations expecting greater granularity than some publishers can offer, causing talks to break down. "The beauty of it," she added, is that "Tacoda lets the advertisers define the audience segments themselves," which she noted is an important first step, because they needed more active participation in the development of the new ad platform.

Tacoda, which collects data for 700 targeting-enabled Web sites, says the categories will be further refined by a task force of advertising representatives from the agency, client, and research markets. Dave Morgan, Tacoda CEO, claimed that "by turning over control of the standards to the market participants, [Tacoda enables the] development and refinement of the best and most useful segments. In addition," he added, "this will make it easier to transition the effect to one or more trade association-driven efforts as they develop and eventually take over the standards development process."