Behavioral Targeting's Global Frontier

 

If you fly six hours east from San Francisco, you could end up in New York — another American city that speaks the same language and shares the same national holidays. However, if you fly just a little over one hour east from London, you could end up anywhere: Amsterdam, Brussels, or Paris; speaking Dutch or French.

The quantity of American soil is matched by an equally vast population. It forms a fertile domestic market many smaller countries can only dream of. For those markets blessed with large domestic populations, expanding internationally is often not a priority. However, for those with limited land and populations, international trade is a business necessity.

The Internet has created the largest market population in the world. To the younger generation, it is the world. Looking at dot-com poster-children eBay and Amazon.com, one can easily see the international business potential the Internet has gifted companies with.

The Internet has nurtured and contributed to globalization. Globalization, in turn, will take the Internet to the next level as a business platform. After all, if consumers can conduct cross-national and cultural behaviors and actions online. Why shouldn’t businesses that rely on the Internet?

As Internet penetration continues to reach new heights, behavioral targeting, although still in its fledgling state, must plan and expand internationally. Online behaviors are surely to follow the broadband adoption.

An Inevitable Growth

A recent ClickZ News story identified this growing trend of brands’ international online expansion. The trend is also validated by recent global expansions on the agency side, from boutique communication firms, such as The Ingram Partnership, Naked Communications, and Mother, to corporate powerhouses, such as Aegis-owned Isobar.

Regardless of how powerful they are in their domestic markets, media agencies will eventually reach a point where economy of scale is no longer sufficient for price negotiation. They can either look internally to diversify their portfolios or focus externally on expanding business internationally to increase the buying scale. This isn’t an act of corporate aggression; it’s an inevitable growth strategy for all companies with long-term visions.

Similar to any other technology with revenue dependent on online audience volume, behavioral targeting’s near-future growth could mean expanding to where the online impressions are increasing.

If behavioral targeting is indeed about audience management, vendors’ natural growth factor would make certain they have a growing audience to manage. This suggests behavioral targeting vendors must follow the growth of online advertising because it’s a proxy indicator of maturing online user behavior.

Markets such as the U.K. (22 percent broadband penetration, 60 million-plus people); Germany (15 percent broadband penetration, 80 million-plus people); and the Netherlands (41 percent broadband penetration, 16 million people); along with other Western European countries, are ripe for behavioral targeting. Emerging markets, such as Poland and China, should be closely observed by companies that want first-mover advantage in these blossoming markets.

Over There

With English quickly becoming the accepted universal language, U.S. and U.K. content will be even more widely read by a multinational audience. The U.K. is a natural next market to expand into for behavioral targeting.

Nimble, opportunistic companies are quickly realizing capturing global audience data is a competitive advantage. Some of smart U.S.-based companies have already launched U.K. counterparts.

Revenue Science has seriously begun to expand its U.K. presence. It’s recently signed prominent online U.K. publishers Associated New Media (ANM), The Guardian, and Wanadoo, which join Reuters.com and FT.com on the roster.

Advertising.com is established in the market with its own behavioral targeting system, LeadBack. Poindexter signed a technology distribution partnership with Twin London, and MediaBrokers, an acquired U.K. subsidiary of aQuantive, also recently began to offer behavioral targeting using sister company DRIVEpm technology.

What Does This Mean for Online Media?

Online marketing is a business like any other. The only way to grow is to continually expand markets to maintain a healthy revenue-profit ratio.

Once the domestic market is saturated, the natural, viable way to exponentially augment market size is to expand internationally. Behavioral targeting is no exception to the rule. Just because you’re young doesn’t mean you shouldn’t have expansion goals.

eMarketer’s and Forrester’s research on Internet user activities shows no significant differences between an American broadband user and their European counterparts in terms of online activities (e.g., downloading music, watching streamed content, etc.). Research consistently shows online user behaviors are similar across most cultures, regardless of geographical differences. If anything is a factor in behavioral differentiation, it’s the digital divide (broadband vs. dial-up) itself, not language or geography.

Could it really be the Internet has inadvertently spawned a set of universal human behaviors shared by all people who have the full online experience? Or is it a reminder that with new markets and new demands, growth can be methodically engineered if smart companies look internationally?

As the mobile generation traverses internationally even more, behaviors will no longer be limited to a single region but span multiple regions via multiple devices. Globalization is an inevitable growth for the online industry. But just like other industries, only the early birds get the worm.