Behavioral Targeting Gets Close Up and Personal

  |  August 29, 2007   |  Comments

Consumers are divulging personal information in exchange for more targeted advertisements.

The information people divulge about themselves finally appears to be relevant to behavioral targeting.

Last week, "The Wall Street Journal" reported that Facebook plans to develop an advertising system to let marketers target users with ads based on personal information revealed by the users themselves.

If you've closely followed the growth and evolution of behavioral targeting over the years, this report is both a blessing and a curse.

It's a blessing to know the industry finally takes behavioral targeting seriously. Facebook appears to be the first social network site to openly deploy a behavioral targeting mechanism combining self-opt-in information and user clickstream data to predict what products and services users might be interested in based on historical data. It clearly legitimizes the importance and effectiveness of behavioral targeting as a critical component in advertising and media communications.

But it's a curse because after more than three years from the first suggestion of including such consumer data, the ability to increase messaging relevance by adding user's self-opt-in information is just now being recognized as a key ingredient in the targeting mix.

For a technology-based industry that thrives on change, adaptation, and innovation, this is long awaited and slightly overdue.

From on Guard to Avant-Garde

Since the dot-com days when online behavioral targeting was first conceived, the industry has debated the practice's perceived infringement on privacy.

At the time, privacy groups and the FTC hammered Gator, a behavioral targeting company, for capturing user private data without clear permission. The company eventually rebranded itself under the name Claria to evade the association with spyware, they have also built a fortress around anything that's remotely related to using personally identifiable information (PII).

When "The New York Times" launched the revolutionary surround-session targeting in 2002, many had already discussed and even explored the powerful potential in combining real-time behavioral data capture with consumers' self-revealed information in their personal profile (since most paid-subscription sites require a lengthier, more detailed application).

However, consumers' unwillingness to provide such personal information at that time, let alone sharing them with friends, would probably make Facebook look like the '60s sexual revolution.

The Standard for All Targeting

No one would dispute that advertising is all about relevance and that modern targeting technologies exponentially increase marketers' ability to deliver more appropriate and desirable messaging. Not only is the relevance factor crucial to communication between brands and consumers, but it's also the differentiator between waste and efficiency in media planning and buying.

Choice is a liberating, democratic way to show respect to modern-day consumers. There's a striking similarity between social behavioral evolution and software development in which "open sourceness" is a natural metamorphosis and progression.

As more companies enable people to express themselves in an open way, we are aggressively moving toward a transparent communication model in which consumers must choose between what they want kept private and what they share. Integration of site-based user opt-in profile and click-stream data should be the standard for all targeting.

What This Mean for Online Media

EMarketer said it best: "Internet advertising is no longer all about paid search. Targeted online display advertising is exploding." In fact, the market research firm predicts that spending for online advertising with a behavioral targeting component will soar from $575 million this year to $1 billion in 2008. Although this only represents just 11 percent of the U.S. display, rich media, and video market, it will undoubtedly mark the pinnacle of behavioral targeting to date.

As online branding's important rises, targeting will play a even more critical role for advertisers to ensure efficient message delivery and effective communications. According to the same eMarketer report, behavioral targeting spending will grow at a significant rate, peaking at nearly 74 percent in 2008, due to greater advertiser acceptance, publisher support, and overall online ad spending with the national elections, Summer Olympic Games, and brands' digital migration.

Whether the combination of self-revealed user profile and real-time data capture will lead to the ultimate behavioral targeting is difficult to predict. But it's clear that as our generation realizes that open disclosure about our interests actually represents a better media experience with tangible benefits, we are indeed at the crossroad of a new communications standard.

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Andy Chen

Based in London, Andy Chen is vice president of digital solutions for Viacom Brand Solutions(VBS) International. Prior to Viacom, Andy was the media strategy director at Carat International/Isobar, which handles global media and digital strategies for Philips, Renault, Adidas, and various other multinational clients.

A true advocate for global integration and strategy, Andy has lived and worked in Copenhagen and Stockholm, where he was a management consultant for the Swedish Advertising Association. He received his BA from University of California, Berkeley; and a MBA in international marketing and global management from Stockholm University, School of Business. Named one of the "20 Rising Media Stars to Watch in 2004" by "Media Magazine," Andy is a frequent international conference speaker on digital and interactive media. He published his first collaborative book, "The Changing Communication Paradigm," in November 2005.

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