Study reports more advertisers are trying it
By Heidi Dawley Jun 27, 2006
It's one of those smart internet ideas that's been surprisingly slow to catch on: behavioral targeting. It's where the advertiser places the message in the path of the user, based on the user's past behavior. That's opposed to traditional targeting, where the ad is placed against content the advertiser assumes the user will be interested in.
But at last behavioral targeting is showing real acceptance among advertisers. A new study reports that nearly one in four online advertisers, 23 percent, plan to use behavior targeting in 2007, up from 14 percent this past year.
"Advertisers are starting to embrace behavioral targeting," says Emily Riley, advertising and marketing analyst at JupiterResearch, which conducted the study. "For some it is just another tool in the tool box. But for others, particularly advertisers with long purchase cycles, it can really be an important tool."
That may well be because of the results it delivers. Jupiter's researchers found that 88 percent of agencies that used behavioral targeting in the last 12 months were somewhat to very satisfied with the effectiveness of the campaigns. That's compared to 56 percent of agencies that relied on traditional targeting methods.
Behavioral targeting, which relies on sophisticated tracking technology, is still only offered by a handful of companies. Among those offering the service are Tacoda Systems and Revenue Science. There are also companies, such as Yahoo, that offer aspects of the service across their own properties.
In effect, there are two basic types of behavioral targeting, known as extended-content targeting and purchase-intent targeting.
Extended content targets users who have shown an interest in a subject, say flyfishing or golf, by placing the advertiser's message, say for a new, light-weight reel or a putter, when the user has moved on to new content, even unrelated content, as Riley explains.
So, for example, through the behavior software we know that someone has read at least three golf articles in the last month. The putter-maker can then arrange to place his or her ad against whatever new content our golf fan pulls up, whether it be about golf or investment banking or the weather, for that matter.
The advantages are pretty obvious. The advertiser is reaching consumers known to be interested as opposed to consumers who he has reason to think may be interested, which should produce higher results at less cost. Extended content is generally used for branding.
The other form of behavioral targeting, purchase-intent targeting, allows advertisers to direct their messages at users who are about to make a purchase. For instance, someone that has been researching convertibles on an auto site could be targeted with relevant advertising when they are elsewhere on the internet.
"Purchase-intent targeting pinpoints someone that is about to buy something, not just someone that is interested in a particular subject matter. So for advertisers that is like magic," says Riley.
Jupiter's study found that in 2007 behavioral targeting will close in on content targeting and demographic targeting, the two traditional targeting methods. Content targeting will be used by 25 percent of advertisers next year, while 28 percent will target by demographic. That’s not far ahead of the 23 percent of advertisers that intend to use behavioral targeting.
Riley credits the change to the increasing sophistication of the tracking technologies and advertisers' increasing faith in their reliability. Behavioral targeting is expected to see its biggest gains among advertisers of products with long purchase cycles, such as cars, supplanting traditional content targeting in the next 12 months.
Meanwhile, in online ratings for the week ended June 18, Microsoft was the top parent company, followed by Yahoo, Time Warner, Google and News Corp., according to Nielsen//NetRatings. Top brands were Yahoo, Google, Microsoft, MSN and AOL.
GUS Plc once again retained the top spot among advertisers, delivering 5.27 million impressions to No. 2 Vonage’s 3.74 million. Yahoo served up the most ads, 18.96 million, followed by MySpace at 7.37 million.
Sessions per person averaged 16, and domains visited per person were at 37, with the average PC time per person at 16 hours, 5 minutes and 5 seconds for the week.
Top 25 parent companies Through June 18
#
Parent
Unique Audience (000)
Reach %
Time spent per person (hh:mm:ss)
1
Microsoft
81,122
61.0
0:41:06
2
Yahoo!
74,056
55.7
1:09:34
3
Time Warner
69,521
52.3
1:38:13
4
Google
63,333
47.6
0:20:10
5
News Corp. Online
33,621
25.3
0:43:59
6
eBay
32,539
24.5
0:42:20
7
InterActiveCorp
27,684
20.8
0:13:20
8
Amazon
20,629
15.5
0:11:49
9
RealNetworks, Inc.
19,850
14.9
0:21:08
10
Landmark Communications
19,224
14.5
0:23:44
11
Walt Disney Internet Group
17,742
13.3
0:25:36
12
Apple Computer
17,625
13.3
0:30:40
13
New York Times Company
15,357
11.5
0:07:31
14
United Online
13,938
10.5
0:28:55
15
Verizon Communications
12,490
9.4
0:14:35
16
Bank of America
11,800
8.9
0:24:22
17
AT&T Inc.
11,145
8.4
0:17:50
18
CNET Networks
10,393
7.8
0:07:24
19
E.W. Scripps Company
10,109
7.6
0:07:42
20
Wikipedia
10,001
7.5
0:09:33
21
Gannett
9,675
7.3
0:08:53
22
Viacom
9,129
6.9
0:31:36
23
Comcast Corp.
8,404
6.3
0:25:16
24
EarthLink
8,376
6.3
0:32:52
25
Wal-Mart Stores
7,875
5.9
0:07:56
Source: Nielsen//NetRatings
Top 25 brands Through June 18
Parent
Unique Audience (000)
Reach %
Time spent per person (hh:mm:ss)
1
Yahoo!
73,342
55.1
1:10:00
2
Google
62,068
46.7
0:19:40
3
MSN
62,063
46.7
0:37:50
4
Microsoft
60,899
45.8
0:16:09
5
AOL
48,777
36.7
2:07:23
6
eBay
28,616
21.5
0:43:06
7
MySpace
24,166
18.2
0:53:45
8
Real Network
19,812
14.9
0:21:11
9
Weather Channel
18,382
13.8
0:24:35
10
Apple
17,625
13.3
0:30:40
11
MapQuest
17,319
13.0
0:07:04
12
Ask Search Network
16,766
12.6
0:14:23
13
Amazon
16,678
12.5
0:11:22
14
About.com
10,390
7.8
0:03:11
15
CNN
9,993
7.5
0:18:48
16
Wikipedia
9,913
7.5
0:09:21
17
Bank of America
9,590
7.2
0:27:37
18
Blogger
7,611
5.7
0:07:24
19
ESPN
7,488
5.6
0:27:02
20
Comcast
7,353
5.5
0:27:42
21
Disney Online
7,332
5.5
0:30:38
22
Lycos Network
7,159
5.4
0:03:06
23
EarthLink
7,041
5.3
0:34:36
24
PayPal
6,947
5.2
0:11:53
25
IMDb - Internet Movie Database
6,940
5.2
0:07:45
Source: Nielsen//NetRatings
Top 25 advertisers (excludes house ads) Through June 18
#
Company
Impressions (000)
1
GUS Plc
5,273,916
2
Vonage Holdings Corp
3,740,748
3
NexTag, Inc.
2,476,671
4
Reunion.com L.L.C.
1,421,792
5
Netflix, Inc.
1,394,841
6
United Online, Inc.
1,294,741
7
Verizon Communications, Inc.
1,109,417
8
Time Warner Inc.
1,060,487
9
Echostar Communications Corporation
1,025,934
10
YourGiftCards.com
996,545
11
HSBC Holdings plc
817,498
12
Skype Technologies S.A.
659,383
13
E*TRADE FINANCIAL Corp.
653,990
14
Monster Worldwide, Inc.
584,485
15
Low Rate Source
571,124
16
Bank of America Corporation
477,800
17
Providian Financial Corporation
451,856
18
eBay, Inc.
443,042
19
OnlineRewardCenter
442,066
20
Microsoft Corporation
354,159
21
Scottrade, Inc.
339,595
22
InterActiveCorp
321,600
23
TD Ameritrade Holding Corporation
321,104
24
American InterContinental University
304,696
25
General Motors Corporation
303,416
Source: Nielsen//NetRatings AdRelevance
Top 25 advertising sites (excludes house ads) Through June 18