• by Mark Walsh  @markfwal, November 15, 2006

Ad industry executives believe that behavioral targeting is more effective than other types of online targeting, according to a study released Tuesday by the American Advertising Federation.

More than half of 168 surveyed industry executives (52.4%) said that behavioral targeting--or serving consumers ads based on their Web-surfing history--was the most effective targeting method, followed by demographic (32.9%), contextual (30.5%), geographic (14.6%), and other (4.9%).

More than seven in 10 respondents (71%) also believe that the Internet is "very effective" or "most effective" for direct response advertising. Most (60%) indicated that the Web is only "somewhat effective" for brand advertising.

"Online advertising provides nearly instantaneous metrics, which has led most of us to view online as a direct response medium," one agency told researchers. "We know that online ads also have solid brand building power, but this is often overshadowed by TV and other media that promote brand building power because they can't claim more measurable results."

Researchers asked respondents how they planned to allocate their online/new media budget next year among search and seven types of emerging media--online video, blogs, podcasts, social networking, RSS, mobile and video games. Within those categories, executives said that search would receive the largest proportion (27%) on average, followed by online video (14.9%), blogs (8.4%), podcasts (8%), social networking (7.7%), RSS (5.5%), mobile (5.2%), and video games (3.6%).

Most respondents (71%) described search as "very effective" or "most effective," but also thought highly of emerging media. Among newer forms of media, online video was deemed very effective or most effective by 40% of respondents, followed by social networking (38%), video games and podcasts (23%), mobile (20%), blogs (19%), and RSS (11%).

When asked to name the marketers that had delivered top integrated campaigns, respondents chose Dove, Burger King, Volkswagen, Honda and Nike.

Also, a majority of respondents said they expect 20% or more of their TV advertising budgets to shift into online video by 2010.

The study, which was prepared by Atlantic Media Company, is the fourth annual survey to be issued by the AAF.