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3 factors improving BT's aim

Bob Dykes
3 factors improving BT's aim Bob Dykes

In his new book "Meatball Sundae," Seth Godin defines old marketing as "the act of interrupting masses of people with ads about average products." The problem with this approach is that it's incredibly expensive, wasteful and ultimately, inefficient. Godin recognizes that it's not about how many people see your ad; it's about getting the right people.

I can't agree strongly enough.

Godin rightly points out that, for many advertisers, it no longer makes sense to pelt the masses with advertising that is irrelevant to most of them in hopes of reaching the right few of them. It's not efficient to interrupt hundreds of millions in hopes of reaching thousands of buyers in a given campaign. For example, at any point in time, only about 5 percent of the population is interested in thinking about another car to buy.

For years, marketers have tried to address the relevance issue by honing in on those folks who are most likely to buy. They bought ads in magazines or on web pages whose readership matched with their target customer. They sent emails or direct mail pieces targeted specifically at their customer base, or at people that looked just like their customer base. And they developed rudimentary behavioral segments, based upon basic web surfing information.

This approach essentially moved their programs from mass marketing, where everyone gets the same message, to macro targeted marketing, where the message is customized based upon rudimentary audience segments. Sure, with the latter you're able to create some efficiency by narrowing your target market a bit, but you're still a long way from pinpointing the people who actually want to buy from you. So with macro targeted marketing, you are reaching out to millions instead of tens of millions in order to find the right thousands.

Working under the assumption that Godin is correct (and I think he is), what's the answer?

If online is really going to continue to take advertising dollars away from television and other forms of media, we need to be more than a mass medium. As advertisers are increasingly embracing the long tail they are looking to us in online media to provide them with the ability to reach those people efficiently.

We know where we need to be. The question is how will we get there? Here are a few trends that are beginning to emerge:

Trend 1: AdWords plus 1
We all recognize that Google AdWords offers the quintessential right ad at the right location to the right person at the right time. Now advertisers can place relevant display ads on web pages based on their search keywords. So advertisers aren't restricted anymore to a few words and a link but get a nice big Skyscraper or Medium Rectangle to message the customer.

For example, if someone is in the market for "cheap flights to New York," she searches and clicks an organic link or maybe even an AdWords ad, and we know she is interested in flying to New York. So, when she's on the next page, or the one after that, why not show her your American Airlines ad offering discounted flights to the Big Apple? It's all about accurately identifying your target market and getting your brand in front of it.

It makes sense for the consumer. And as a practical matter, it really makes sense for the advertisers who are finding it more expensive or even impossible to buy certain keywords given skyrocketing keyword prices. This is here now -- but look for this idea to build steam once the EU approves the Google/DoubleClick merger.

Trend 2: Smarter! faster! better!
Since its inception, behavioral targeting has lacked the scale to deliver on the promise of true "precision targeting." There just hasn't been enough data available to develop anything more than rudimentary segments. While you certainly can infer something by virtue of the fact that someone visited the travel section of an online newspaper, it really doesn't provide enough information to increase relevance any more than marginally. And it certainly doesn't help much in terms of getting the ad to someone at the right time.

The good news, however, is that this capability is or will soon be available, via networks, via web-wide behavioral advertising and via data sales. Let's take a look at all three.

Over the past 18 months, consolidation has significantly altered the BT landscape. For example, as Tacoda is gradually rolled out across the AOL network, and Blue Lithium is integrated across Yahoo, we're potentially seeing larger and larger pools of information being leveraged for behavioral and other forms of targeting.

Of course, potential is the operative term here. Acquisitions always look good on paper. Only time will tell how well the networks are truly able to integrate BT into their overall mix. But if they're able to execute, the networks will significantly increase the scale of their BT platforms.

Web-wide behavioral advertising
This is the type of solution being offered by my company, NebuAd, as well as others, such as Adzilla. The web-wide behavioral advertising companies are able to leverage a large proportion of user surfing habits and their searches. So while portals such as Yahoo may collect information on a fraction of user surfing behavior, web-wide behavioral advertising companies are able to observe most of a user's surfing behavior. Having such rich information allows companies in this space to build much larger, and define more meaningful audience segments, which in turn will enable advertisers to tailor their offerings to their specific desired audiences.

Moreover, having instant access to user surfing behaviors means that profiles can be developed quickly -- really quickly. Web-wide behavioral targeting can develop detailed profiles in a single surfing session, something it would take "traditional" BT players weeks or even months to do. And as profiles are developed almost instantaneously you get a clear picture of what the user wants now -- not what he was interested in a while back. Ultimately advertisers want results, and this means they need to reach web users with a relevant ad at the exact moment they are in the market for their goods and services.

Data sales
For over a generation, companies such as Experian and Acxiom have provided businesses with the opportunity to enhance their offline data. And while that concept really hasn't taken hold in the online space with regards to non-personally identifiable information, recent events suggest that it's coming. Acxiom's acquisition of Echo Target and Experian's purchase of Hitwise are likely just the beginning of what's to come as direct mail budgets wither and ad dollars shift online. It will be interesting to see whether any of these acquisitions evoke the same controversy as DoubleClick's purchase of Abacus did nearly a decade ago.

In any event, as the large data companies begin to develop online profile segments, it's only a matter of time before they look to sell those profiles to online advertisers and publishers to use as behavioral segments.

A few of the networks are also getting into this business. And there are certainly online-only companies such as Exelate and Rapleaf that appear to be heading in this direction as well. This type of data -- and lots of it -- will eventually enable micro target marketing. The challenge for companies in this space will be to develop profiles in a way that is both transparent and privacy safe.

What does this all mean?
There has never been a better time to be part of the online advertising value chain. The opportunity to deliver the right ad at the right time is finally here. So long as it's collected and used responsibly, having access to richer non-personally identifiable information drives benefits for the entire value chain, including consumers. The trick of course, is to set standards for the responsible way to hold and use data.

There's a lot going on when it comes to targeting, and things are moving quickly. I encourage anyone reading this to take an active part in these exciting discussions.

But I also encourage the agencies and advertisers to embrace what Godin refers to as the new marketing, and to recognize that the new marketing is going to evolve over time. What worked for you in the past may not in the future. Over the next year or so, you'll have many more powerful tools at your disposal. And your ability to leverage the right tools to deliver the right message to the right person will have a positive impact on your programs, and our industry as a whole.

Robert Dykes is founder, chairman and CEO of NebuAd. Read full bio.


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