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Beyond Search

  |  March 1, 2004   |  Comments

Search marketing doesn't hold all the answers. Find other forms of targeting that complement search.

When I was at DoubleClick several years ago, the marketing department introduced a new slogan: "Delivering the right message to the right consumer at the right time."

Now I hear it everywhere. The line's lost much of its impact. During the boom years, it summed up online marketing's allure: the Internet could help advertisers find just the users they wanted to reach, deliver an ad tailored to their precise interests, and do it just when those users were most receptive. It was a marketing panacea predicated on targeting.

Plenty of companies thought their products were best suited to handle this targeting: DoubleClick, Engage, Real Media, NetGravity, MatchLogic, and a host of others. It turned out a small firm in Los Angeles, one most in the industry shrugged off at first, found the most popular way to deliver the right message to the right consumer at the right time: GoTo.

GoTo, now Overture, figured the easiest way to learn a user's interests was to let him tell you. A simple observation in 1998 grew into a $2.1 billion marketplace by 2004. Today, Overture, Google, and scores of other search marketing companies compete for nearly a third of the total online ad spend.

With simplicity and effectiveness, search is winning the targeting race. Although it will continue to be a force in online advertising, search marketing alone doesn't hold all the answers. Its ability to build and refine brands is unproven and likely imperfect. More important, search marketing is limited to promoting products and services users know they want. That's not a limitation most traditional marketers welcome. These shortcomings mean it's important to seek other forms of targeting that complement search.

Behavioral Targeting

Pioneered by Engage and MatchLogic in 1998, and famously attempted by DoubleClick a couple years later, behavioral targeting technologies anonymously track the sites a user visits. Once users are tracked, advertisers can target them based on their interests. It's ideal for marketers who know their audience, even if their audience doesn't know them.

Since the large adservers bowed out of behavioral targeting, Tacoda Systems has become the major player in the space. Working mostly with newspaper Web sites, it generates impressive results.

Tacoda doesn't share behavioral data across clients, so the targeting can only be applied to prohibitively small audiences. To reach more users, the company must help sites combine their data into behavioral targeting networks. They must act soon. Some major adservers, including 24/7 Real Media, are looking to move back into this market.

Reach isn't a problem for adware firms such as Claria and WhenU. They've installed tracking software on tens of millions of desktops, creating a mass audience for behavior-targeted ads. Many advertisers and publishers find adware recruitment techniques unsavory (a valid concern in some cases). Yet these vendors offer the only scalable behavioral targeting currently available. Advertisers who want to use behavioral targeting and don't mind a potential ethical dilemma should turn to adware.

Contextual Targeting

Rather than track where users have been, contextual targeting considers only where they are at the moment the ad's delivered. Major sites and adservers have long offered a form of contextual targeting, selling site inventory by broad content category. A news site typically allows advertisers to run ads only on sports, travel, or business pages.

The practice reached a new level last year when Google introduced its AdSense program. Overture and Kanoodle quickly followed suit. Each indexes a page and assigns it a keyword, then places relevant text-based ads into banners, skyscrapers, or other ad units. Context-targeted listings often don't perform as well as keyword-targeted listings. Advertisers don't always have the option of bidding less on these ads, as many would prefer.

When priced correctly, contextual-targeted ads can greatly extend the reach of a paid listing while still meeting an advertiser's return-on-investment goals. They can also reach users who aren't specifically looking for a marketer's products or services. Until they have the ability to make separate bids for contextual ads, advertisers should carefully measure and analyze the performance of these units.

As we celebrate and debate search marketing this week, it's important to evaluate other forms of targeting, too. Each can help deliver the right message to right consumer at the right time.

Want more search information? ClickZ Search Archives contains all our search columns, organized by topic.

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Nate Elliott Nate Elliott covers online advertising as an associate analyst for Jupiter Research. He is regularly cited in the media as an expert on rich media, search marketing, and ad serving technology. Prior to joining Jupiter, Nate was DoubleClick's Senior Manager for Rich Media and manager of the DoubleClick Studio design team, roles in which he worked with clients such as AT&T, Kraft, General Motors and IBM. Nate founded and co-chaired the IAB Rich Media Task Force, the group that set the first industry standards for rich media advertising. He has also worked for Macromedia, driving the Flash Multi-Tracking Kit as de facto industry standards for tracking clickthroughs and other interactions within Flash ads. He isregularly cited in the New York Times, the Wall Street Journal and elsewhereas an industry expert.

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