In January, behavioral targeting network and technology provider Audience Science released a report, conducted by Forrester, suggesting 56 percent of U.S. online marketers use behavioral data to inform display ad buys. Despite the fact the technologies have been available in Europe for a number of years, it appears marketers there are more reluctant to use it.
Of course that figure does not indicate what portion of actual spend is being assigned to the practice, but it does suggest a level of awareness among U.S. agencies and advertisers of the claimed advantages of buying audience rather than inventory.
By contrast a similar study covering the European market, released last May, suggested that 58 percent of respondents there were just considering the use of behavioral solutions in 2009. Speaking with ClickZ this week, Nate Elliott, the author of that report, suggested the discrepancy remains, thanks largely to the relatively limited availability of the technology in Europe, the smaller scale of the audience there, and a more strict privacy atmosphere compared with the U.S.
"Most of the early innovators in this space have been in the U.S., so it will take time for Europe to catch up. Privacy and scale provide further hurdles, but probably the biggest one is access to the technology," he said.
Direct media buys still account for around 90 percent of the inventory VivaKi buys in the U.S., according to Kurt Unkel, SVP, director at the Publicis-owned operation. The remainder comes from third-parties including networks and exchanges, of which a portion may be targeted using behavioral data, he said.
Within VivaKi, he notes a continued shift towards the use of aggregated inventory through exchanges and networks as segmentation data becomes more readily available. "We're seeing a significant shift," he said. "We have more and more clients trying out these types of targeting and retargeting, particularly in relation to purchases with a longer consideration period, such as those in the automotive, travel, and financial verticals." Acknowledging that brand marketers require more education in the area, he added that many direct response marketers already grasp the benefits of such targeting.
However, the U.K. market isn't quite up to speed, despite a number of behavioral firms operating there, said Nick Burcher, Vivaki's head of products and partnerships for the EMEA region. "The U.S. market really leads the U.K. in this area. That's not to say it's not happening in the U.K., but the technology and practices are really being driven by the U.S.," he said.
Burcher suggested a key factor in that differentiation is the smaller scale of the market, and the lack of quality data as a result. "Europe is a big market, but language barriers and the localization of brands means you have to buy media market by market. As a result, the pools of users are much smaller than in the U.S.," he said, suggesting the data could be less useful to advertisers.
As Elliott phrased it, "The more specific your audience gets, the more of the overall audience you're throwing away."
AudienceScience CEO Jeff Hirsch suggested that discrepancy is simply a result of the relative maturity of the U.S. when it comes to behavioral targeting. As he pointed out, in the U.S., the practice of behavioral targeting evolved from site publisher-side setups, to audience networks incorporating inventory from a range of publishers. He sees the U.K. and Europe following that trend. "We're starting to see the availability at scale of both inventory and data, and demand is starting to catch up with the U.S.," he said.
In a recent example of behavioral adoption in the U.K., the Financial Times and Bauer Media announced last month they would share their on-site data to better serve automotive advertisers on their respective sites. According to Bauer, none of their inventory - even remnant or non-premium - is released into any behavioral networks; yet, the relationship demonstrates demand from advertisers for richer, highly qualified behavioral data.
Another factor is the regulatory scrutiny and press attention the practice has received within Europe over the past two years. The introduction of controversial ISP-level targeting technologies from companies such as Phorm and Nebuad turned attention to the practice of ad targeting based on user behavior more widely. Although vendors such as AudienceScience rely on cookie-based tracking and stress their data is not personally identifiable, many advertisers and publishers deemed it safer to steer clear of advanced targeting altogether.
With regards to privacy, Elliot said the issue was still a prominent one in Europe. "Most agencies are comfortable with it now, but it is still taken into account," he said. "There seem to be more concerns and greater regulatory fear in Europe than in the U.S."
He suggested that constant pressure from privacy advocates and self-regulatory efforts from organizations such as the IAB U.K. are doing "just enough" to stave off formal regulation. "Privacy is always going to be a factor, but it's fading as something that keeps marketers out of the practice," he said.
Meanwhile, behavioral technology companies continue to expand across Europe. For example, Specific Media announced the launch of a Swedish operation this week, and claimed it saw 97 percent growth in its network's unique users across the Nordic region during the six months ending January 2010. That kind of sustained investment in the space suggests continued demand for behavioral solutions on both the publisher and advertiser side.
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Jack Marshall was a staff writer and stats editor for ClickZ News from 2007 until August 2011.
March 19, 2014