Introduction
BT today: hit or miss
Paradise found: targeting without waste
Requirement 1: an open marketplace
Requirement 2: an open technology platform
Requirement 3: an open mind
To illustrate the hit or miss nature of behavioral targeting as commonly practiced, consider the often-cited example of the Car Shopper, whom we'll define as one who has visited content about new car makes and models at a certain level of recency and frequency. (We'll look at user retargeting another time, but the same principles apply.)
Car Shopper browses several pages looking at new four-door intermediate- and full-size domestic sedans priced under $30,000 on a site that participates in a behavioral targeting network. A data tag on the pages browsed allows the site or a network to drop a bit of code on her browser so that Car Shopper can be identified later as a candidate to receive an appropriate ad for a mid-level four-door sedan.
Car Shopper browses more pages outside the network and eventually lands on a site that has given the network permission to deliver targeted ads when possible. Unfortunately, when she lands on a page that has an available, targetable ad position, the network has in its database ads for convertibles, imports, SUVs, trucks and luxury sedans, but none that match her specific segment.
What happens next? Because this is an inexact science, the network might serve a luxury sedan ad that is out of Car Shopper's price range or an ad for a different body type. More often the network serves an untargeted default ad, a low-priced run of network (RON) ad or public service announcement (PSA).
Another common result is that the network passes the ad call back to the site, which then delivers its own default ad, usually a low-priced RON, house ad or PSA, or another untargeted ad that was sold by the publisher and given a low priority in its ad server.
The point is that instead of a valuable, well-targeted ad being served to an interested user, both the ad inventory and a potential customer go to waste. Adding insult to injury, the publisher usually has to pay for an additional ad delivery for the untargeted default ad.
Multiply this by millions of such lost opportunities every day across dozens of segments and hundreds of sites and you get a portrait of disappointment: a buyer fumbles to explain why an underdelivering campaign has to be cancelled; fingers point and voices rise between an unhappy seller and his "told-you-so" colleagues in operations when the publisher asks why she has to eat the cost of failed expectations.
What if the advertiser controls the targeting across sites using its own ad server? The result may be less waste for the advertiser, but for the publisher it means smaller volume, greater difficulty and more expense to absorb.
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