Study: Behavioral Ads Convert Better Out of Context

  |  October 16, 2006   |  Comments

A study from BlueLithium's BL Labs found behaviorally targeted ads get more clicks when served in the same context, but convert better when served in unrelated contextual categories.

Behaviorally targeted ads can generate a higher click-through rate when shown in a contextually relevant category, but are more likely to lead to a conversion when viewed out of context, according to a report from BL Labs, the research division of behaviorally targeted ad network BlueLithium.

"We set out to prove that behavioral targeting performed better than contextual, and we wanted to see if that was true across the board," Dakota Sullivan, BlueLithium's CMO, told ClickZ. "What we found was it's more complicated than that, and it depends on the goal of the marketer."

BL Labs looked at more than 400 million impressions across numerous sites in its network over time, evaluating click-through rates (CTR) and conversion, or "action-through" rates (ATR), across several behavioral segments and contextual categories. It also analyzed more than 10 million impressions served to users in nine behavioral segments to find patterns across various contextual categories.

As a result, BL Labs analysts found that ads shown in the same context as behavior had a higher CTR in seven of the nine categories. Ads shown in a different context had a higher ATR in five of the categories.

"As a top-line recommendation for advertisers, if your goal is traffic, use behavioral targeting in context. If your goal is conversions, use behavioral targeting out of context," Sullivan said.

For most advertisers doing direct marketing, it makes more sense to serve behaviorally targeted ads in a different context than the behavior, such as serving ads targeting golf enthusiasts on a cooking site, he said. For behaviorally targeted ads shown in a different content category than that of the behavior, overall CTR is 108 percent higher and overall ATR is 19 percent higher than ads shown in the same category. ATR was higher in 5 of the nine segments with more than 10 million impressions.

If an advertiser is primarily concerned with driving traffic, then behaviorally targeted ads in the same category will perform better. CTR for ads shown in the same content category as behavior is 56 percent higher than ads shown in a different category. This was true in 7 of the nine segments.

There were some segments that did not conform to these results, Sullivan said. For instance, the "shoppers" segment showed the highest CTR from ads on career sites and the highest ATR on female-oriented sites. "Travelers" had the highest CTR on food sites and highest ATR on career sites.

"Previous research from others indicated an across-the-board rule of thumb, but we found it varies widely by category," Sullivan said.

A December 2005 report by Tacoda and Next Century Media found that behaviorally targeted ads served out of context got more "looks" from users than contextually targeted ads. Another Tacoda study, this one conducted in May 2004 with advertiser Snapple, found visitors targeted outside of diet & fitness sites scored higher for key brand metrics than those who saw ads within the channel.

'Marketers need to think twice before acting on a knee-jerk reaction to advertise in-context," Dave Zinman, BlueLithium's SVP of products, told ClickZ. "In traditional media, there has never been a way to target behaviorally, so they had to target contextually. They can get more efficiency out of their media buy if they use custom segmentation for each campaign."

This is the first research report to come out of BL Labs that has been made available to non-clients, but the company expects to release more research as well as allow marketers and agencies to use its data to test out new ways of using media and challenge common assumptions, Sullivan said.


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ABOUT THE AUTHOR

Kevin Newcomb

Kevin Newcomb joined ClickZ in August 2004, covering search marketing and other online marketing topics. He has been reporting on web-based businesses since 2000.

Before the bubble burst, Kevin was a marketing manager for an online computer reseller, handling copywriting, e-mail marketing, search marketing and running the affiliate program.

With a combination of real-world marketing experience and years of business journalism, Kevin brings to ClickZ a unique ability to deliver news and training materials that help online marketers do their jobs better.

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