Behavioral Marketing’s Coming of Age

In less than two weeks, I’ll be celebrating the four-year anniversary of my move to Dallas. Much has changed; I’m no longer in my 20s. I took the plunge and become a homeowner. Along with the changes in my personal life, the industry I work in has also experienced some upheaval.

With major advertisers becoming more convinced online is an integral part of the media mix, we’re once again enjoying a bull market when it comes to online spending. Though we’ve seen what search has done for our industry, behavioral targeting is still trying to fulfill the promise we heard four or five years ago. So what has changed in the behavioral marketing space in the last four years? Is it any wiser, or is it just older (like that carton of soymilk sitting in my fridge)?

From the initial looks of it, behavioral targeting has begun to deliver on some of its promise. In particular, research studies released by Tacoda Systems for Snapple and Revenue Science for American Airlines show that when done correctly, behavioral targeting really helps advertisers identify and convert consumer segments. But beyond the good PR and hype, has anything really changed?

While trying to figure this one out, I came across a ClickZ column by (no less than) Tacoda Systems’ president Dave Morgan that does a great job breaking out behavioral marketing’s “then and now.”

Beyond the hype, timing, technology, and business models, for me the differences really boil down to separation of church and state, or publisher and technology vendor.

If you were an early adopter who dabbled in behaviorally targeted placements back in 1999 or 2000, chances are you did so with heavyweights such as DoubleClick and Engage.

They were the heavyweights of their time all right, of ad serving, ad networks, and technology; the very things that, when mixed in a blender, could cause major headaches from privacy group advocates. Today’s behavioral targeting heavy hitters are less likely to run into the issues that plagued DoubleClick and Engage because their businesses focus on the technology of helping publishers create viable behavioral segments. No longer do they tinker in trying to create their own networks (hold that thought for a later column) or being ad servers (hold that thought, too).

In addition to working with publishers to help create behavioral segments, today’s behavioral marketing companies realize their job doesn’t end with agreements between themselves and the publishers. They know they must also educate marketers and agencies on behavioral targeting’s benefits. In some respects, it’s similar to how rich media vendors such as EyeBlaster and PointRoll started their businesses.

As a direct result of this separation, selling behaviorally targeted inventory is currently now under the publishers’ control. Branded sites such as The Wall Street Journal Online and NYTimes.com have always sold their inventory based on their brands’ value, regardless of ad format. In the old days, DoubleClick and Engage provided site representation but had little ability to speak about the brands they sold.

The fact publishers are now on board may be the biggest difference between the “then and now” of behavioral marketing. This past weekend, I saw a wonderful movie, “Garden State,” a coming-of-age movie about a 20-something actor. It just may be behavioral marketing is having such a moment.

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