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Intelligent behaviour: a new era for online advertising

Intelligent behaviour: a new era for online advertising Dirk Freytag
Behavioural targeting was a popular topic of conversation in digital marketing circles around three years ago. But, mainly because it was a complex subject for a new industry still getting to grips with the fundamentals, such as the art of selling online inventory, it disappeared off the radar. However, with the development of the market it resurfaced in the U.S. in the early part of 2006, and is now back on the agenda in Europe.

Not only is it being discussed, it has been adopted by most of the major U.K. publishing groups including Associated Newspapers, FT.com, The Guardian and News International. But despite that, behavioural targeting in the online advertising world is still a very new concept and is being treated with the caution one would expect for something that is breaking new ground.

A discussion on the subject therefore needs to be clear as to what behavioural targeting is -- and equally what it isn't.

Behavioural targeting is about analysing where and to whom an online advertisement is served. Put very simply, cookies are used to track consumer behaviour on the web and identify their tastes and interests. This information is then used to segment audiences to enable advertisers to make informed choices about where they buy space. For example, someone looking online for holidays would then be served advertisements relating to travel. More specifically, if they had shown an interest in a particular destination, the material would be relevant to that location.

The idea of segmentation is obviously not new -- print and broadcast media have relied on it for years. Where the web differs is that results are based on actual consumer behaviour, not on surveys of what they say they do.

What behavioural targeting is not is a Big Brother-style tracking device. Consumers are free to disable their computer's cookies so their surfing activity cannot be traced. Increasingly, they also have a choice as to whether or not to be involved due to new opt-out measures being introduced in the industry. However, whilst these factors are obviously essential to maintain the web's neutrality, a key point to remember is that behavioural targeting gives the user a better online experience because it results in the provision of information that is relevant to them. And, recalling the early days of intrusive and irrelevant banner advertising, it seems likely that this will be welcomed.

From an advertiser's perspective, behavioural targeting has the potential to be a valuable tool because it allows the delivery of messages to audiences that have already shown they are interested in relevant areas. Advertisements can therefore be really tailored to this readership, making them more effective and increasing ROI. This enhancement of online advertising is also of huge benefit to publishers because it significantly increases the value of their untargeted inventory.

So it would seem that the outlook is rosy for this new phenomenon-- and, in principle, it is. But, as with anything with the potential to be so sophisticated, there are some caveats.

First of all, the versatility of the internet makes it an ideal tool for both mass dissemination and one-to-one communication. However, marketers need to remember that advertising is not about the one-to-one experience -- its aim is to reach as many in the target audience as is possible with one message. The technology that enables behavioural targeting offers the ability to segment users into numerous, highly-specific groups. But the danger then is that audiences are narrowed down so severely that money spent on advertising to these minute groups is not effective-- put into basic terms, it doesn't make financial sense to create and produce an advertisement that is seen by too few people.

It is also important to remember that, whilst behavioural targeting is really useful on big portals, on single-interest sites it is less relevant. For example, a user looking at a property website is obviously interested in property. (Although the specific property information in which they are interested can be used to further streamline their profile.)

Finally, the importance of real-time cannot be underestimated. Returning to the travel example, a user looking at holiday websites today may well book their break there and then. So an advertiser who cannot target them with relevant information until tomorrow potentially misses a sale. Even with products and services that have longer buying decision times, it is essential to get relevant information to the prospective customer while their research is fresh in their minds.

Overall, behavioural targeting is one of the most advanced, interesting and exciting things in the digital marketing industry. But just because it can be made to be complicated, doesn't mean it should be. Consumers will not appreciate over-complexity, and it will severely impact ROI. Everyone involved in this nascent trend of online advertising has a duty to use it with the intelligence it deserves and -- perhaps paradoxically -- that means keeping it simple.
 
Dirk Freytag is the CEO of ADTECH.

Mr Freytag has more than 10 years of experience in the external and internal strategies of communication including his last position at Bull AG (Germany, Austria and Switzerland). Since 1982 he has been responsible for various positions at agencies,...

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Comments

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Commenter: Jeremy Mason

2007, October 05

I applaud this article, and think it makes good points. Revenue Science is proud to enable behavioural targeting on all of the UK sites Dirk mentions (along with many others like Sky, Telegraph, Orange, Reuters, Channel4, emap, etc). But I would argue with the point that it is less relevant for non-portal sites. Certainly big portals benefit from behavioural targeting, but our vertical publishers like being able to target further, and have seen a lot of agency enthusiasm for granular targeting. Of course, they will weigh the balance of reach and relevance, but this is always part of a media buy. I also agree that real-time targeting is critical for success on short-term purchasing decisions like travel or insurance. But it's also true that if the campaign/target is a longer term cycle, like automotive or property, then reaching the user in the following days or even weeks is just as valuable.

Commenter: Gordon Mattey

2007, October 01

Amazing! My first comment (and second here) posted the day before (1st Oct) the article publish date (2nd Oct). No, I don't have a time travel machine!

Commenter: Gordon Mattey

2007, October 01

People have always opted out, not necessarily through disabling cookies or by going to the "xyz industry association" website that its' members are loathed to be part of. People simply ignore ads. Why is the advertising industry so scared about asking people to opt-IN? Why is the advertising industry still treating people like a mass-audience? Behavioural targeting provides a perfect platform on which to start engaging with people, having a conversation.. Why is the industry continuing the ways of the past and continuing to be surreptitious? I think you'd all be surprised by people if you let them in the door.