The digital advertising market continues to grow but intelligent advertising is still dragging its feet. The founder of one major behavioural targeting firm speaks out.

This year, new records continue to be set in online marketing. In January, a lot of social communities were able to break page impression records on the fly. The European trade association, the Interactive Advertising Bureau, also announced at this year's 'Interact' congress in June that Europe is seeing on average a 40 per cent rise in online advertising revenue -- with the United Kingdom belonging to the top two countries in this category. However, sufficient monetisation for diverse forms of advertising has so far still failed to appear. Being in the online media business day by day, I consider a paradigm shift in online advertising as long overdue. 

The online advertising market is growing, as is the range of choice on the internet. Both of these developments are positive because they are indications of the potential of the internet, which has only been developed superficially so far. But just because something is online, this does not mean that it is exempt from the laws of supply and demand. To put it bluntly: the extreme upsurge in the availability of choice has clearly created a situation where supply has outstripped demand, especially since advertising continues to focus exclusively on reaching quantitative masses. To counter this, internet advertising companies are offering completely new methods of communicating with customers.

What this means, among other things, is a channel for feedback, unique to the world of online advertising. This feedback channel is often confused with the click-rate, i.e., the instant response to an advertisement, when in reality it is much more than just this: it is an opportunity to react to the interests of the user and to provide them with more relevant advertising information. Amazon is the pioneer of this approach with their comparative tool whereby 'readers who have purchased this book are likely to be interested in this article', so that the focus is initially centered on the users themselves. This constitutes a clear paradigm shift from logically sorted content, towards user interests and the clear clustering of interest groups.

The rules have not been changed. Advertising seeks to awaken an interest and must always be relevant to the beholder.

A simple but not particularly effective method of awakening interest is to place advertising in identical thematic contexts. However, advertising can be more effective when it is placed in an unusual context, for example, when advertising for organic yoghurt is directed at fitness-interested users on sports pages.

Modern technology and the integration of market research data now makes this conceivable. We see that the internet is vastly superior to all other media when it comes to addressing target groups. Implementing predictive targeting methodology allows you to identify your target group firsthand and in real time so instead of delivering a campaign with a high penetration rate to all users; advertisers can now consciously direct their advertising at relevant users only. Therefore the internet provides a real opportunity for brands to use qualitative behavioural data to really hit the nail on the head.

Instead of continuing to conduct mass advertising on ever-newer platforms, the advertising industry should perhaps be focusing more on reaching the correct audience. Instead of just increasing the number of mouse-clicks, it would be more valid for the advertising message to present the product and to win potential customers, i.e., to raise the brand profile in the consciousness of the users. In the longer term, advertisers as well as website operators and users stand to benefit from this intelligent form of advertising targeting.

Frank Wagner is founder & director, nugg.ad AG.