Why behavioral targeting works and a glimpse into the future.

Several explanations
The initial idea behind behavioral targeting is that you can reach the same audience as with content targeting, but you can do so in a place where the CPMs aren't as high. And there's clearly a lot of value in that, presuming the response rates are comparable.

But there's another angle to this worth exploring.

From a creative perspective, a big part of our job is to develop advertising messages that stand out from their environment. You can take it all the way back to the Hierarchy of Effects, also known as response model AIDA-- Attention, Interest, Desire, Action.

The model goes that before anything else can happen, the consumer has to notice the piece of communication. If the ad doesn't get their attention, everything after that fails, too.

What behavioral targeting does is move a message to a place where it's not as likely to compete with other messages all circling around the same general subject matter.

Think about it. If the viewer sees three CPG product ads, and then sees my CPG ad, that's a little cluttered. But if they see two auto ads and an apparel ad, then see my CPG ad, my ad is simply going to have that much more differentiation.

And keep this in mind: Legendary San Francisco adman Howard Gossage said, "People don't read ads, per se. They read what interests them. Sometimes that's an ad." Your ad is not only competing with other ads, but its also competing with the content of the publication you're placing it in.

Now let's consider another angle to this phenomenon. It regards the immersive quality of the content.

Some content types are naturally going to be very involving. Complete content categories could be more or less captivating than other categories. If the viewer is deeply engrossed in the subject matter, it would take more to distract him, whether it's for an awareness, interaction or clickthrough objective.

However, if the person sees the same ad on a site in which he views the content as lighter and less involving, he might be much more inclined to mentally leave what he's doing and experience the ad.

Another point along these lines involves viewthrough activity. Anyone who has monitored online ad activity closely for the past few years knows that a significant number of 'respondents' never click on the ad, but simply view the ad. And these people are often the highest converting visitors. That makes sense, because they've noted the brand and taken time to visit the site later, at their own convenience. I'm curious if, due to its media differentiation, behavioral targeting produces a higher rate of viewthrough visitors. In our Sugarshots tests, the data was a little thin to be able to make the call, but I think it's an interesting hypothesis to a test.

Into the future
There's a delicate balance in this industry between internet usage and advertising response rates. And while broadband is our friend, it also causes people to do many more transactional tasks online, burning through more pages, and thus viewing more ads. As their internet time skyrockets, it's unreasonable to expect that response rates will remain the same. Those broadband users simply don't have the hours in the day to respond to ads at the same rate as when they viewed far fewer ads.

It's technologies like behavioral targeting, and the rich media solutions we're seeing from the streaming providers, that will enable us to continue offering compelling messages that both attract the viewers' eyes, and gain their interest.

We need to embrace these tools and better understand how they work. They give us differentiation, and keep the industry moving in a positive, creative direction.

Additional resources:
View 24/7 Real Media's latest report on behavioral targeting.

Doug Schumacher is president/creative director for Basement, Inc.