Behavioral Targeting: A Brave New World... Maybe

PHOENIX -- Behavioral targeting promises to bring an unprecedented degree of efficiency to ad spending, provided it's done appropriately --and that means not alienating consumers with perceived violations of their privacy, according to a panel of Internet ad executives speaking Monday afternoon at the Interactive Advertising Bureau's Ecosystem 2.0 conference.

There's no question that behavioral targeting is the wave of the future, according to moderator Matthew Wise, president and CEO of Q Interactive, who said opponents of BT are "Luddites, trying to protect a business model that has gone by."

Fellow panelist Heidi Browning, the senior vice president of client solutions for Fox Interactive Media, cited some impressive results from behavioral targeting using data from MySpace--including a 733% lift in brand awareness, 800% lift in recall, 152% increase in brand favorability, and 179% increase in purchase intent.

She added that social networks like MySpace are ideal places to harvest data for behavioral targeting because consumers voluntarily provide detailed information about a host of behaviors and attitudes--including, for example, media consumption and brand preferences as well as simple demographic descriptors, age, education, and geographic location. From these, Fox assembled a number of enthusiast and lifestyle segments, broadly grouped in 10 super-segments, with at least 3 million and as many as 10 million members each.



According to Browning, MySpace data can tell marketers when a user "is moving, having a baby, going to college"--but also more subtle information including receptivity to ad messaging at different times of day. With other data sources, like DVR records, she said MySpace information will allow "hyper-targeting" of consumers, delivering the right kind of ad message via the right medium at the right time of day.

Meanwhile, the IAB is moving to address concerns about consumer privacy. On Sunday the organization released new interactive advertising privacy guidelines. Rather than specific directives, however, they represent "high-level concepts" dealing with consumer notice, choice and data security, and are intended to serve as a "roadmap" for industry players who collect and/or use data to deliver relevant ads online or via other platforms.

While some government bodies and consumer advocates insist behavioral targeting violates consumer privacy, two weeks ago Eileen Harrington, a deputy director with the Federal Trade Commission, told a conference organized by the Direct Marketing Association's Email Experience Council that the FTC "isn't so sure." More to the point, the decision by Congress not to consider proposed legislation governing behavioral marketing means the FTC has turned its focus "to cases where there's not just chance, but actual harm to consumers."

Nonetheless, Harrington said the industry must still move to adopt voluntary rules for behavioral marketing. Although it's not an official proposed rule-making, in late 2007 the FTC posted a series of sample rules online for discussion and comment, and extended the comment period to April.

The new IAB guidelines, according to Randall Rothenberg, the organization's president and CEO, are "more flexible" than those suggested by the FTC. The IAB said the new guidelines would be submitted officially to the Federal Trade Commission by the end of February.

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