iMedia's editor at large breaks down the eight key types of behavioral targeting and their respective strengths.
Online ad targeting is all about delivering the right message to the right person at the right time and, critically, at the right cost. The traditional alternative, mass marketing, is less effective than it once was, largely because of today's highly fragmented marketplace.
In its new report, "Online Ad Targeting: Engaging the Audience," eMarketer projects that U.S. spending on behavioral targeting alone will exceed $2 billion per year by 2008.
Three key reasons will continue to drive the appeal of a targeted approach:
- Marketers get better results from the impressions they buy.
- Publishers appreciate the opportunity to earn revenue from less popular web pages.
- Users find ads targeted by their actions to be more relevant to their needs.
Put another way, the benefits are well known…
…and the types of data available for use are well established.
Any online advertising that is directed by knowledge of the client or prospect can be described as "targeted." A closer look at such activity reveals that there are essentially eight key types of targeting, used on their own and in various combinations:
Behavioral: Ads served based on user actions, observed on a single publisher's site or across a network of sites.
Contextual: Ads based on content, such as cosmetic ads on iVillage or brokerage banners on a newspaper site's financial pages. Contextual ad targeting is also keyword based, such as with Google's AdSense or Yahoo!'s Publisher Network programs, which serve text-only links based on an automated analysis of content.
Daypart: Ads displayed according to the time of day, day of the week, or season of the year. For example, show coffee ads in the morning, leisure-related ads right before the weekend, and stow away the ski vacation ads in summer.
Demographic: "Classic" ad targeting, using factors such as age, gender, education level and household income in order to identify desirable market segments. Many publishers and portals gather this data through registration-and while they hope these efforts create a robust marketing database, enough people fib about this info to make demographics somewhat suspect.
Engagement: By joining the conversion with influential individuals on social media sites such as blogs and community networks, marketers use word-of-mouth and consumer-generated content to reach those people who self-target their interest in the company's offerings.
Geographic: Essential for local advertising, and also used by larger companies who want their ads delivered to only the U.S. audience, for instance.
Permission: While not always thought of as a form of targeting, permission-based marketing-such as an opt-in email list-is much like search marketing because the people who say "yes" identify themselves as interested in a particular product, service, or category. In that light, engagement's word-of-mouth is another form of permission targeting.
Search: The act of entering keywords in a search engine, and then clicking on paid ads or organic listings, is the internet's primary form of self-targeting.
These techniques all help maximize the relevance and the effectiveness of advertising and thereby boost the bottom line.
However, no one should think that choosing online ad targeting as a tactic is a no-brainer. A key drawback is reach, or rather the lack of it that results from narrowing down the list of recipients of marketing messages. The more you slice and dice your potential audience, the more likely your campaign's reach will become, as one ad network exec told eMarketer, "pathetic."
This impact can be finessed using broad definitions of actions and contextual keywords. In addition, the best ways to blend targeting methods will mix the large-scale, such as demographic, with the more fine-tuned, such as behavioral. But whatever techniques or mix of techniques is deployed, a smaller audience is inevitable and, given the youth of this approach, deployment of targeting is best kept simple.
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