It Was a Good Year for Behaviorally-Targeted Advertising

Here it is, late December. I can only think 2005 was a good one for behavioral marketing and interest-targeted online advertising.

Here are a few notable changes and improvements (not in any particular order) that are top-of-mind for me.

I’ll try to keep this review market-level, rather than going into too many vendor specifics to cover more ideas.

Publishers Kept up the Momentum

Publishers continued to adopt and build advertising programs on behavioral segmentation and targeting, maintaining their growth momentum from 2004.

A number of publishers introduced interest-based targeting at the site, group, and network levels. And, they expanded the approach beyond just matching ads on Web pages to include interest segments.

For example, search engines started gearing up to make ads more relevant on search results pages based on previous searches.

And site publishers started to allow advertisers to target visitors based on a particular technology usage, such as RSS.

E-mail providers, meanwhile, began layering in behavioral targeting options as well. They’re going beyond just the who-clicked-last-time type of segmenting.

Technology and Service Providers Evolved Their Offerings

Major behavioral targeting players took big steps in 2005 towards improving their offerings.

Particularly noteworthy was Claria’s decision to stop a controversial distribution practice and start moving away from pop-ups to paid ad positions.

Service providers such as Revenue Science and Tacoda announced new networked offerings, and plans to expand their international operations.

Even rich media companies got into the game by offering new features and functions such as behavioral sequencing to enable more-relevant messages based on users’ past interactions.

Marketers Continued to Adopt BT

As fears dissipated around individual privacy and associations with spyware, adoption of behavioral marketing tactics by marketers continued to rise.

Renewed industry efforts, such as the SafeCount coalition, seemed to start to make a real difference in terms of raising awareness of the issues and providing good information about online advertising counting and tracking.

Case studies that more clearly illustrated how behavioral and interest-based targeting yield good results across different types of advertising objectives pulled more marketers to give it a try.

A (Very) Brief Look Forward to 2006

I predict 2006 will bring still more innovation and diversity to the offerings already available in the marketplace.

As consumers’ expectations race past Web pages to multi-sensory, platform-agnostic, highly-personalized digital content, there will be many more opportunities.

But there will be problems, as ever there have been.

Standards such as shared segmentation definitions across this greater availability of content (audio/video, subscribed, mobile, and so forth) will add complexity to an existing dilemma.

Producing and distributing good information and content for consumers and marketers alike, to help them understand and make sense of behavioral marketing, will also continue to be an issue.

And poorly-conceived or executed programs will persist in creating uncertainty, even around the vast majority of those that work well for all main parties involved: consumers, publishers, advertisers, and service providers.

Those reservations aside, I’m optimistic about this area in 2006. And not only because I expect it to be another good year for the internet advertising industry in general.

No, I expect it to be a good year for behavioral marketing specifically. Behavioral marketing improves advertising relevance for consumers, it increases publishers’ potential yield on inventory, and it yields better performance results for marketers, too.