2005 A Year of Growth for Behavioral Ads

Behaviorally-targeted advertising campaigns grew to double the impressions of the year before, while click-through rates increased by 166 percent in 2005. That’s according to data 24/7 Real Media gathered from its OnTarget behavioral targeting network, which the company believes can shed light on the industry as a whole.

Over the course of the year, behavioral targeting (BT) providers improved their targeting techniques, advertisers became more versed in its use, and publishers warmed to the idea of BT, according to Jack Smith, 24/7 Real Media’s VP of product strategy.

“2005 was a key year for behavioral targeting. It’s a concept that was pioneered in the direct mail world, but when those tried and true concepts are combined with the accountability and immediacy of the Internet, it becomes even more powerful,” Smith told ClickZ News.

According to the report, campaigns targeting “Techies” consistently generated between 12 percent and 18 percent of impressions each quarter. Overall, the most growth came in the “Women” and “African American” segments, which each grew to exceed 20 percent of all impressions during the third quarter. These segments reportedly achieved above-average click-through rates, combined with modest effective CPMs.

Despite growth in the standard targeting segments, some of the most successful campaigns came from customized segments, where advertisers “retargeted” customers or prospects with relevant advertising when they appear on 24/7’s network after they’ve visited the advertiser’s site.

Retargeting can be used to cross-sell to customers who bought something, or to contact a prospect again in an attempt to lead them to a conversion event, such as a sale, download, or newsletter signup, Smith said. It’s most effective when used in conjunction with other kinds of advertising, such as a run-of-network ad buy, he said.

In a campaign for imaging products reseller Polaroid2go.com, Fulgent Media used retargeting in conjunction with other types of ads, and found that retargeting, which accounted for 7 percent of the ads in the campaign, produced 25 percent of sales and 50 percent of revenue.

A campaign for Sugarshots, which markets a liquid sugar product for high-end coffee drinkers, used a BT campaign on 24/7’s network to help shape its marketing plan and test messages which resonated with each target audience, according to Doug Schumaker, president and creative director of Basement, the agency which ran the campaign.

“Sugarshots was an interesting opportunity: a new product in a new category. We had some hunches about how it would turn out, but the product had never been marketed here in the U.S. before,” Schumaker told ClickZ News.

The results proved Schumaker’s hunch that the product would resonate more with women, who make more decisions about consumer packaged goods. They also helped Basement determine how the variables would work together. The agency’s creative focused on dissolvability or tasted, was targeted to either men or women, and was delivered to sites on either entertainment or health.

The results showed that audiences are more receptive to BT ads when they are not contextually targeted to the content of the target site. For instance, BT ads targeting the ‘Women’ segment performed below average when served to sites in the Women’s Interest vertical, but performed significantly better on sites in other segments.

“When the ads appear out of context, they help set your message apart. If someone sees a Sugarshots ad next to three car ads and a movie ad, it’s going to be unique,” Schumaker said. “You’ve got to differentiate your message in any way you can.”

A similar study that looked at a Snapple campaign on iVillage came to similar conclusions about targeting users outside the contextually-relevant content area.