Implicit in the desire to target advertising is the recognition that its opposite, mass-market advertising, is no longer as viable as it was in broadcast television's heyday. Only 28.7 percent of respondents in an American Association of Advertising Agencies (AAAA) survey believe that such untargeted advertising will be "very effective" by the end of the current decade vs. the 58.2 percent who believe it will be "somewhat effective."
Of course, the internet has multiplied audience fragmentation far beyond what cable has done to the broadcast networks. The hundreds -- if not thousands -- of niche markets found online not only create the need for greater ad targeting to reach the splintered audience, but all those niches make targeting more feasible, too.
That is why 84 percent of U.S. advertising professionals cite the internet's more precise targeting of fragmented audiences as a prime benefit of online advertising.
Marketers typically employ online ad targeting -- especially through behavioral, contextual, geographic and search methods -- for direct response goals more so than for branding ones.
The focus is shifting, however, according to Advertising.com's ongoing survey of U.S. web publishers. While only 19.2 percent of respondents cited branding as the main objective of online advertisers in 2005, that figure more than doubled to 41.5 percent this year.
Just as direct response dominates for online advertising in general, it has been the main objective for ad targeting as well. As Dakota Sullivan, chief marketing officer of ad networking company BlueLithium, told MediaPost recently, "Behavioral targeting was first adopted by direct marketers, who are by nature test-and-learn marketers. Like with search a few years ago, the first companies to really jump in with both feet were those who could see the most immediately tangible benefits-- and with direct marketers, it's lower cost per customer acquisition."
Looking at the priorities for target marketing alone, acquiring new customers (generally a direct response objective) was cited by nearly half the respondents in the CSO Insights survey as the first priority.
However, among those advertisers using paid-link contextual ad targeting on content sites (the black bars in the following chart), 46 percent cited brand exposure as a primary goal compared to the 33 percent who listed immediate sales, according to a February 2005 survey sponsored by search site Kanoodle. So even with these ads generated by search engines (a predominantly direct response medium), the target objective is more on the branding than the direct response side.
In fact, the growth of branding online furthers the call for more ad targeting. Take online video, probably the most costly method of internet advertising. According to 50.2 percent of the advertisers polled by the AAAA, video advertising is the form of new media that will grow the most in 2006.
Furthermore, of the 35.4 percent of U.S. publisher websites that support any type of video, more than half support all three types of video advertising, with more than three-quarters supporting the costly and effective pre-roll format or the lower-priced but ubiquitous in-banner format.
With its greater costs than, say, static display ads, video becomes a better ROI citizen when its impressions are targeted more accurately. Wasted impressions for expensive advertising are no longer supportable.
At its best, relevance -- targeting's prime promise -- also boosts the bottom line. However, much like beauty, relevance is in the eye of the beholder. And in the case of effective targeting, the beholder is the individual-- not the advertiser.
Remember that "ad targeting" is marketer language. And while from the audience's perspective, "relevance" would better describe well-targeted advertising, most people would likely not use that term. Instead, when individuals are presented with ads that speak to them, the relevance is more subtle and tends not to be as blatant as the concept of targeting implies.
In this context, relevance turns advertising into information or, in some cases, into entertainment. And while online advertising advocates would like to claim the interactive medium as the most relevant, 32 percent of the more than 2,000 U.S. internet households surveyed last year by Parks Associates say TV ads provide them with the most relevant information vs. the 12 percent who say the same about internet links or search-based ads.
That may be only one survey and it does not look at targeted ads alone-- but in that light, internet marketers have a long way to go.