Revenue Science's president and CEO mixes sure bets and long shots in his list of behavioral targeting predictions for 2006.
2005 was a banner year for online advertising, and the best year yet for behavioral targeting (BT) with it being about 13 percent of all online media purchases. According to some projections, that share will grow to more than 20 percent next year. That's nice, steady growth and given the latest industry trends, that number may even be a little conservative. However, the success and future of behavioral targeting can't be captured only in the numbers, so I'm taking this opportunity to offer some predictions as well as some potential -- if somewhat unlikely -- developments to be on the lookout for.
Prediction: Behavioral targeting accepted as mainstream
In 2006, impressive campaign results -- for both the buy and sell sides -- will finally force industry holdouts to cease thinking of behavioral targeting as some esoteric combination of psychoanalysis and higher mathematics. They will begin using it as a standard strategy, incorporating it alongside search as a line item on every RFP.
Unlikely Development: Advertisers begin referring to search ads as "one-dimensional behavioral targeting."
Prediction: Advertisers will flock to context-poor sites
Marketers know that about 85 percent of the web is non-contextual, but they also know that that inventory is difficult to use effectively due to questions about audience quality and scale. Forward-thinking agencies and advertisers are already using behavioral targeting to address these concerns and reap the benefits. With network sites like MySpace and LinkedIn continuing to not only grow membership, but also show sustained active usage by those members, advertisers will have to jump on that potential through behavioral targeting.
Unlikely Development: Due to overwhelming response, General Motors shifts 80 percent of ad budget to KittyCatLovers.com.
Prediction: Behavioral targeting goes global
With behavioral targeting now operational in Europe and Japan, the technology has already made impressive global inroads, and that process will accelerate in 2006. You can expect to see BT enabled for more geographies and languages, and rapid growth in new markets where they can learn from and avoid early obstacles experienced in the U.S.
Unlikely Development: 2006 sees Google purchase a 19.9 percent stake in the United Nations.
Prediction: Partnerships create a real behavioral targeting marketplace
With all the opportunity and all of the revenue pressure, publishers of all sizes are realizing the inherent value of using BT to expand their inventory, when warranted. By creating custom partnerships with other high-quality publishers and delivering ads to their audiences on other sites -- especially for high-demand categories -- publishers will redefine how they think of their audience, increasing liquidity in the market and delivering more value to advertisers.
Unlikely Development: Wall Street Journal / National Enquirer partnership reveals hidden link between alien abductions and hedge funds.
Prediction: Users get as excited about BT as marketers and publishers
As users grow more and more frustrated with pop-ups, interstitials and other highly intrusive forms of advertising in 2006, they will understand and appreciate the streamlined and more relevant web experience that BT delivers. I would not be surprise to see some publishers make "targeted advertising" a part of their value proposition.
Unlikely Development: "Cookie controversy" once again refers to whether Oreos should be eaten whole or twisted apart first.
Prediction: Behavioral targeting on other digital media
I've written and spoken quite a bit about behavioral targeting as the solution for aggregating audiences in a world of fragmented digital media. From my discussions with executives in telecommunications, and broadcast and cable companies, I'm confident that development will begin in earnest in 2006.
Unlikely Development: First "wardrobe malfunction" seen on cell phones during Super Bowl.
Prediction: Greater demands to define behavioral targeting
Since Revenue Science pioneered the concept of behavioral targeting in 2001, we have seen many players add what they call "behavioral targeting" to their offering. But what is really being offered? Are comprehensive sets of behavior truly being analyzed or are these companies purely leveraging buzz words? The widely varying level of sophistication among different providers -- and corresponding low-quality audiences that some deliver -- will be exposed and both marketers and publishers will demand better quality measurements.
Unlikely Development: According to new FCC regulations, misrepresenting behavioral targeting capability carries $1,000 fine and one year of dial-up only internet access.
In all seriousness, I expect great things from behavioral targeting in 2006. If you compare adoption of BT to other technologies, you'll see that it is well ahead of schedule, making tremendous advancements in terms of market penetration, campaign volume and overall understanding and acceptance. Happy New Year and happy targeting!