• by Steve Smith , Staff Writer @popeyesm, March 3, 2006

As many agencies continue merely to dabble and test, test and dabble in behavioral targeting, others are amassing case studies and moving to the next level of BT campaigning. John Gray has been making behavioral part of his media planning for over a year and a half, first at JWT Detroit and, more recently at his new post as director of interactive marketing, Enlighten. His experience is that BT works best when the creative blends with the user's alternative context. And the real worth of BT often is realized only when you ask the right questions of the metrics. We were also joined by Tom Beck, Enlighten's vice president-coporate development.

Behavioral Insider: At both JWT and now at Enlighten, why have you been exploring BT so much?

Gray: We have been testing it for the past year and a half...with all types of variables...across all different properties and vendors. Here at Enlighten we had experience with Hunter Douglas window treatments We did some BT through Tacoda across the network.

BI: In your real-world planning, how effective was BT in relation to standard contextual and ROS buying?

Gray: The highest response rates were contextual-based advertising. For Hunter Douglas, if you were in a home furnishings area on HGTV.com, we were going to see the highest response rates in terms of initial response. And that was true when I was at JWT across the automotive category. Where BT has better response is over run of site... always.

And where there was a little bit of a difference was on the conversion rate on the back end. The initial response rates were [highest] in context, but then... on the back end we saw higher conversion rates from some of the behaviorally targeted inventory.

BI: Where does it become problematic?

Gray: If you started to look at the cost metrics...a pricing problem. Let's say the response rate of BT was two times higher than ROS, however the cost of BT was three to four time higher or even more than ROS inventory. If you looked at it on a cost per response basis, it actually didn't pan out on the back end. It's incumbent on the advertiser to understand their back end metrics well enough that they can dictate the pricing model. You can't just go with what the BT companies are selling you. As far as CPM goes, you have to let what you see on your back end dictate what the pricing should be.

BI: What role did creative have in BT effectiveness?

Gray: We saw the greatest response rates across all campaigns by targeting a message [based] on the context users were in. For a Hunter Douglas window treatment, if we found those people within sports-related content, we found a way to tie in sports in the ad messaging.

On Yahoo you capture a segment of people that were shopping for new cars, then hit them when they are on Yahoo sports or music, [with] a message related to [the car brand], but probably talk about [the brand's] best-in-class stereo system. We saw [that] response rates for those types of ads, targeted in context using the underlying behavior segment, were the highest.

BI: Was it still-cost effective with multiple creative executions?

Gray: Yes it was. But that's auto, and there's a lot of new car buyers out there--17 million units sold a year.

Beck: It's also an equation that in autos it might work in five different categories but not in ten. There's a level of too much creative differentiation that will break the bank in terms of production costs.

BI: Are you to the point where BT is figured into every campaign?

Gray: Absolutely. There should be a BT element and there should be a run-of-network, run-of-site element, with every campaign you run. They need to be either high volume or mass appeal products. You want to amass enough inventory on the back end.

BI: What is the biggest weakness in BT today?

Gray: Pricing for the inventory is way out of whack. I think a lot of publishers see this as an opportunity to really get a lot of value for what is otherwise run-of-site or worthless inventory. They're looking at this as an opportunity to price it as close to that contextual advertising as they can. But I think the price point for this stuff should be a lot closer to run-of-site--maybe double or triple the rate of run-of-site--but not near what you find on contextual-based advertising,

BI: Are you surprised that BT buys aren't as commonplace for most agencies as for you?

Gray: I think more analytical agencies are more on board. They have a strong focus on back end analytics and are able to see the value of that inventory a little easier than others that may be looking at the very front end.

Beck: One perfect example is if you're seeing twice the response rate on BT inventory relative to run of site, but it costs four times as much --and that's all you're measuring as an agency--you're going to say, this doesn't make sense. What we might find on our end is that we get twice as many clicks, we pay four times as much, but then we also get twice as many conversions on the back end, in leads, or these leads tend to close at a higher rate. We still think there is an issue with the pricing being where it needs to be. But when you start to factor in these post-click behaviors I think that is where you start to see the value of some of the BT audience relative to run-of-site.