The Behavioral Targeting Stimulus Plan

  |  March 25, 2009   |  Comments

The economy isn't the only thing relying on consumers to shop till they drop. A conversation with Akamai's Matt Karasick.

The economy is relying on consumers to shop 'til they drop. It isn't the only one. Akamai's Advertising Decision Solutions (ADS) is also relying on consumers to shop and, hopefully, drop data along the way. I recently connected with Matt Karasick, product director of Akamai ADS, who updated me on recent developments at Akamai and how they're helping advertisers connect with in-market consumers.

Anna Papadopoulos: Akamai recently acquired acerno; what was the reason for this and how has it been working so far?

Matt Karasick: Akamai's Advertising Decision Solutions line exists to enable behavioral targeting segments at scale for buyers and sellers of online advertising. The acquisition of acerno brought a unique online data cooperative of shopping and purchase data to Akamai that is the underpinning of these behavioral segments.

The integration of the two companies has been going great so far. The addition of the acerno team brings a ton of expertise in the field to ADS. As the teams have gone about integrating the data and technology assets, we are excited that the segments that we are bringing to market will be a huge win for the industry.

AP: What role does behavioral targeting play in shopping?

MK: Shopping data is the most reliable indicator of what someone is in market today to buy. We're able, with the use of predictive analytics, to determine what someone's in market to buy. For example, someone who's shopping for board games, home furnishings, and/or baby bottles is likely in-market for diapers, children's toys, and home entertainment items.

Online retailers are among the most ROI-focused advertisers there are. Each dollar spent must yield a profitable return in sales. Behavioral targeting is the only way to drive transactions at scale using display advertising. We have found that shopping behavioral data is the best predictor of when someone is in-market and what they are in-market for. Using predictive analytics on top of this shopping data, we identify in-market consumers and enable targeting that drives incremental transactions through retailers' Web sites.

AP: How do most advertisers use your platform?

MK: Advertisers contribute blind data to the retail data co-op. We're able to aggregate our advertisers' data and look at it in its entirety. We apply predictive modeling to the data that then helps our advertisers put their message in front of in-market shoppers for the specific products they, or their competitors, sell.

Akamai enables three types of behavioral segments: predictive segments are used to drive online transactions. Descriptive segments are used to create brand awareness and consideration, [while] retargeting segments...keep an advertiser top of mind with consumers who had previously expressed an interest in their brand. Akamai will enable the relevant segment on one of our channel partners (e.g., Yahoo, acerno, IAC) where the campaign will run.

AP: Who are your top advertisers?

MK: We are working with top advertisers in nearly every industry, including retail, travel, automotive, telecom, financial services, dating, and education.

AP: What kinds of shopping behavior can one target? Can an advertiser reach shoppers of competitive products? How granular can one get?

MK: Similar to offline catalog data cooperatives, Akamai enforces rules that protect the interests of the contributors to the data cooperative. As such, an advertiser cannot target competitive products. Predictive segments use advanced predictive modeling techniques that look at over 2,000 shopping behavioral variables to understand who is in market at any given time. Each retailer interested in driving transactions gets its own set of models to identify who is in market for its products.

AP: What are the major e-commerce areas right now?

MK: Probably the sectors that are experiencing the biggest in-store difficulties are the ones who are most open to developing the next e-commerce initiatives. For example, consumer electronics, online apparel, toys, big box retailers.

Nearly every flavor of e-commerce is getting more and more involved in behavioral targeting. Given the current economic climate, this push is even more important. Consumer electronics, apparel, toys, automotive parts, sporting, luxury, furniture, and housewares are a few examples.

AP: How do we set up quantifiable metrics to gauge success (or failure)?

MK: Ultimately, this is where the advertiser and its agency comes in. The metrics of success vary with the campaigns objective. For retailers, it ends up being a simple ROI calculation given the cost of transaction. For advertisers more focused on creating brand awareness and consideration, there are typically proxy actions they are looking at, such as click-through rate, dealer locators, or coupon downloads.

AP: Whom do you consider your major competitor?

MK: For online retailers specifically, behavioral targeting is often competing for budgets from other channels, such as search, affiliate marketing, and other offline marketing, such as catalogs.

AP: What do you see as your limitations right now?

MK: Given the recent acquisition, we feel as though we are extremely well positioned to have a big impact on advancing behavioral targeting. We have spent the recent months outlining our plans, and now we will just have to continue to execute.

AP: Let's talk privacy. How do we go about treating consumer privacy while still making this work for marketers?

MK: We are a member of the NAI, and we ensure to operate within its guiding principles. All of the data that we work with is completely anonymous, in that there is no personally identifiable information. Additionally, we ensure that each of our partners has a clear privacy policy which gives the consumer notice and choice with respect to data and targeting.

AP: What is the selection process for your e-commerce partners?

MK: Any site that has an online transaction is a good fit. In general, we focus on retailers that have at least 250,000 unique visitors to their site per month.

AP: Who are some of your e-commerce partners?

MK: Most of our e-commerce partners are contributing data to the data cooperative. As you see with the offline data cooperatives, our data cooperative is blind and therefore we do not disclose the names of the participating companies.

AP: Where do you see all this going in the next 12 months?

MK: We're working hard to combine the best aspects of the acerno and Akamai businesses to greatly expand the data cooperative. In addition, we will be continuing to roll out our behavioral segments to more of our channel partners.

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Anna Papadopoulos

Based in New York, Anna Papadopoulos has held several digital media positions and has worked across many sectors including automotive, financial, pharmaceutical, and CPG.

An advocate for creative media thinking and an early digital pioneer, Anna has been a part of several industry firsts, including the first fully integrated campaign and podcast for Volvo and has been a ClickZ contributor since 2005. She began her career as a media negotiator for TBS Media Management, where she bought for media clients such as CVS and RadioShack. Anna earned her bachelor's degree in journalism from St. John's University in New York.

Follow her on Twitter @annapapadopoulo and on LinkedIn.

Anna's ideas and columns represent only her own opinion and not her company's.

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