Contributor Robert Moskowitz gets under the hood of DRIVEpm, AQuantive's new targeting division.

AQuantive seems poised for success with its new division, DRIVEpm. The new division buys advertising from only the top 250 publishers and re-sells it to advertisers with the added value of extremely tight targeting.

Increasingly, advertisers are eager to make their ad buys on the basis of different factors for different programs, and they appreciate that DRIVEpm's system can handle as much complexity as they are likely to request.

But Scott Howe, president of Drive Performance Media, won't label his company a behavioral targeter. "Many people," he explains, "believe that behavioral targeting is what TACODA and the others do. But we have a different approach. It doesn't fit the conventional definition. So we call it just plain 'targeting'. Whatever you call it, we work closely with advertisers to offer the right tactics for their various opportunities and situations."

For example, advertisers can use DRIVEpm to selectively serve ads to consumers based on single-publisher surfing profiles. But they can also arrange their advertising programs to take advantage of iterative interactions with consumers, factoring in measures of recency and frequency, as well as conventional demographics, such as the consumer's gender, age, connection speed (broadband or dialup), SIC code and domain name. Ads can also be selected for serving on the basis of other criteria, including: five parts of the day, the day of the week, the surrounding content (gleaned from a real-time page scrape and keyword analysis of what consumers are reading when the ad is being served), and the 62 different PRIZM clusters that marketers traditionally use to divide America into a spectrum of discrete socio-economic neighborhoods including everything from Elite Suburbs and Landed Gentry to Urban Cores and Working Towns.

This level of complex decision-making capability gives advertisers a lot more freedom to target their creative materials as precisely as they want. A simple example: Manufacturers and retailers are learning to serve more ads between 10 AM and 3 PM, when people do the bulk of their buying, while entertainment vendors and charities increasingly shift their promotional emphasis to the evenings, when people are in a more receptive frame of mind.

Interestingly, Howe believes today's online targeting capabilities and the traditional segmentation as practiced by direct marketers in the '70s and '80s exist along the same continuum. In those early years of computerization, catalogers spent millions developing relatively robust data mining models and began sending catalogs to consumers based on many characteristics. Today, computers are more powerful, the data are more robust, and the decision-making is far more complex. But then, as now, the most important variable is whether or not the consumer has already made a purchase.

"We're applying those kind of established direct marketing principles," says Howe, "except we're not getting so personal that it becomes 'creepy.' We don't want to be creepy."

One example of DRIVEpm's success is the campaign for a national global coffee company that rolled out a stored-value card to college students. Recognizing that they didn't have stores on every campus, and that students are a small fraction of all internet surfers, the company wanted to avoid a broad campaign that would waste a lot of money. Instead, DRIVEpm targeted 80 specific ".edu" domains (such as USC, and the University of Washington). This made sure the ads were seen only at universities where the company had a retail presence.

"We made a $30,000 spend perform like $30 million," chuckles Howe, with more than a little pride.

Another successful campaign allowed a home mortgage company to sequence its advertising messages over a 30-day period. Assuming that a person visiting its site is considering a mortgage, the company hired DRIVEpm to target people who had been on its site within the past 30 days, and to serve them ads in sequence, regardless of where they showed up on the DRIVEpm advertising network. The sequential ads offered follow-on information for people advancing through their consideration cycle.

This kind of targeting can eliminate much of the waste, and bring an advertiser's messages to only the most interested and active segment of the general audience.

"Theoretically," says Howe, "we could narrow to a segment of one. But operationally and ethically we think there are limits. We won't serve ads to a segment smaller than 5K, and generally not smaller than 50K. The beauty is that, once you understand your segment, you can tell much richer and more interesting stories. And consumers appreciate seeing ads only for things they might actually want to buy, instead of the hundreds of ads they see for things they don't want or already have."

Howe is quick to acknowledge that such tight targeting will never replace general advertising. Everyone in the United States is a potential cola drinker, for example, so Coca Cola will always want to do broadcast, run of site, and run of networks advertising just to build a basic desire for the soft drink. But there is room for them to target specific groups -- such as 20-year-olds and 60-year-olds -- with different and potentially more appealing messages.

DRIVEpm is careful to partner only with high quality sites, the top 250 sites (in terms of traffic and name recognition, excluding sites that might be too controversial, offensive or otherwise questionable). It's also owned by AQuantive, parent to Avenue A, i-Frontier and Atlas DMT-- which serves about 40 percent of all third-party advertising. This affiliation with Atlas gives DRIVEpm significant scale, as well as access to significant performance information, both of which add power to its ad-serving decisions.

The results for advertisers can be ROI increases from 1,000 to 10,000 percent. For example, an airline initially established a CPA of $8 for one part of its online advertising program. DRIVEpm's approach of initial awareness messaging on the airline's site and then remessaging the prospects, when encountered on other sites, with benefits keyed to their most recent ticket search, has driven this down to $1.50.

Launched in April, 2004, DRIVEpm became profitable within five months, and currently is on track to generate more than $20 million in business for 2005. "We're scaling faster than we expected," says Howe.

"More than anything, we're just going to get bigger and better," he predicts. "We're staffing up, perfecting our systems and adding new clients. Then we're thinking about other digital media: video on demand, and so forth. In terms of the advertising content, there's no reason you can't have a much more relevant user experience there, too."

Robert Moskowitz is a consultant and author who speaks and writes frequently in the United States and abroad on such topics as white collar productivity, knowledge management, practical use of the internet, telecommuting, caring for aging parents, and business applications of information technologies. He has authored several books, including "How To Organize Your Work and Your Life," and "Parenting Your Aging Parents," and teaches several online courses.