• by Cameron Yuill , August 14, 2008

According to comScore, most of the top 25 U.S. web properties attract more international than domestic traffic, including all of the top five -- Yahoo, Time Warner, Microsoft, Google and eBay. Facebook has over 70% of its traffic coming from international visitors and even NYTimes.com reports in excess of 40% international traffic.

Traffic at most sites continues to grow due largely the growth in international site visitors. So, of course, with the Internet's unprecedented and highly touted ability to identify audiences, these engaged international visitors are seeing precisely targeted ads, right?

Actually, the answer is "no" to a surprisingly large degree.

Although geo-targeting is perhaps the simplest targeting available, it is not being consistently practiced by publishers to segment and better monetize their audiences.

When it comes to international traffic, publishers are:

1. Using ad networks. They've long offered publishers the ability to monetize international traffic as remnant inventory. But those very same units on the very same pages sell for premium CPMs in the U.S. So the obvious question: Why are publishers settling for pennies from the networks when they could be getting dollars?

2. Trafficking Run of Site (ROS). If an advertiser does not specifically state in its insertion order "U.S. eyeballs only," (some) publishers traffic the ad as "run of everything." They deliver international impressions on a domestic campaign, this shortchanges advertisers by delivering their ads to the wrong eyeballs.

For example, a domestic U.S. marketer who wants to reach U.S. sports fans may buy premium U.S. sports sites, but its ads lose significant value if half of those fans are actually located in Europe or Asia. And, the publisher's performance is ultimately diluted by using international traffic to fulfill domestic ad buys as click through rates are reduced because ads are not targeted to the audience.

3. Ignoring it. Some publishers are simply doing nothing with the international traffic visiting their site.

In all three cases, publishers are missing out on literally hundreds of millions of dollars in ad revenues by not seizing the opportunity to directly target overseas advertisers.

This situation is particularly vexing for the struggling newspaper and magazine businesses, which are seeing greatly decreased ad revenues from their print publications and massive increases in site traffic as consumers worldwide make the Web their primary news source. The Project for Excellence in Journalism reported recently that 80% of American adults identified the Internet as a critical source for information, compared with just 63% for newspapers.

The digital versions of those same newspapers and magazines could presumably be the largest beneficiaries from this trend, but their online ad revenues aren't keeping pace with traffic growth.

Consider these examples: according to comScore: Tribune Interactive gets a quarter of its traffic from overseas and New York Times Digital a whopping 43%. Imagine if these sites were able to garner premium CPMs in all markets they are read.

Yet viewers of many U.S. sites in non-U.S. locales will likely see ads that are either of no relevance to them or are the 'cheap' ads of the networks we all loathe. As the Internet keeps shrinking the world, so that even a local community paper in Iowa gets read in seven continents, this is a lost opportunity.

Improved ad revenues alone aren't the only advantage in serving ads relevant to local audiences As visitors see ads that match their local interests, marketers will see their ad effectiveness increase. And a happy advertiser means publishers will see further buys from that advertiser.

For online publishers, the challenge isn't how to grow traffic, but how to monetize their sites more effectively by connecting the right audience with the right advertiser wherever they are on the Web and wherever they are in the world.