24/7 Real Media summarizes the results of its first network behavioral targeting study.
In fall 2004, 24/7 Real Media launched its network behavioral targeting product, OnTarget. The first results are in.
Among the biggest challenges for advertisers has always been reaching their desired audiences. Until now, online advertisers and agents had to deal with multiple sites, coordinate creative and gather data from reports using widely varying criteria. And when single-site behavioral targeting first emerged, it was criticized as unable to deliver enough reach to make its greater precision valuable. The arrival of behavioral targeting networks, if large enough, promises a solution.
With OnTarget, therefore, we focused first on creating segments to meet advertiser requirements for both reach and precision. From a taxonomy of 600+ anonymous behaviors, we established eight initial segments, tunable using “FIT”-- Frequency of (User) Interaction (with specific content) over Time -- to achieve more or less granularity as needed.
Publishers were slower than advertisers to sign up, but the evidence is that they shouldn’t be. OnTarget produced great results for publisher participants. The average CPM of publishers’ low-end inventory rose dramatically, with some of it selling for as much as five times its contextual CPM. And since over 75 percent of behavioral targeting impressions were served in the lower two tiers of inventory quality, this meant significant publisher gain.
What about the advertisers? To succeed for them, behavioral targeting had to not just deliver more ads, but also to increase ROI -- requiring an improvement in the ratio of CPM to Reach and/or Conversions.
Most campaigns did this. A large web hosting company, combining behavioral targeting with site sponsorship, saw a CPA for behavioral targeting impressions 70 percent lower than for sponsorship impressions -- a result of lower CPM, higher click-through, and an unchanged ratio of conversions to clicks. Other campaigns met with similar success.
Behavioral targeting is, however, no panacea. If the creative is poor or the offer a dud, it is powerless. Indeed, I doubt that it will ever be the only element in a campaign, while for some advertisers it will not work at all. One of these, a DSL brand in search of domestic customers, tried it, and finding early in the campaign that CPA actually <I>increased<I>, sensibly pulled the plug. The 50 percent of surfers without broadband had no other identifiable common behaviors, while the DSL brand had no more easily targeted subset of them that it wanted to reach. We did what we could to match segments to audience, but there was in fact no need, and it would have been far easier to target them based on their easily identifiable use of a dial-up connection.
This is virgin territory, and while in retrospect it might seem obvious that the DSL campaign would flounder, it was less clear beforehand. No advocate of caution would have predicted that click-through rates might be significantly higher in some cases for ads served out of context than in. But in 12 of 17 non-gamer content areas, gamers clicked through on gamer ads more often than they did on gamer sites. At the same time, while clicks-through across this campaign were down relative to those for Run of Network impressions, conversions were higher and so was ROI. For some markets non-contextual targeted advertising may be more effective -- probably because of decreased competition and “clutter.”
These effects will become clearer in time. The metrics for measuring network behavioral targeting campaigns are only now beginning to emerge; as they do, and as they become more sophisticated, the picture will become clearer and our ability to refine the process even greater.
All in all, it was a great start: Most of our clients renewed, and most increased the behavioral targeting element of their campaigns. This market is heating up, and will only get hotter as more networks emerge and more advertisers enter the fray. Expect to see behavioral targeting campaigns growing quickly over the coming months, and taking an important position in any good media plan.
Additional resources:
Read the press release on the survey results
Robert Tas is Senior Vice President of Technology & Media at 24/7 Real Media. The company is headquartered in New York, with offices in other major U.S. cities, Canada, Europe and Asia.