Behavioral Targeting Heats Up

In another sign that the behavioral targeting space is heating up, Revenue Science, which enables publishers to target ads to audiences based on their online behavior, has won two new major clients.

The Financial Times, a business news organization with an audience of more than 3.5 million senior level executives for its FT.com site, has signed with the company, along with and global information company Reuters, which operates its Web site at Reuters.com.

The idea behind behavioral targeting is that one can infer, by tracking where visitors go and what they do on a site, what type of advertising a person might be receptive to. For example, a user who visits the employment classifieds on an online newspaper might well be a good target for ads from employment agencies — even if he is no longer in the employment section. Frequent visitors to the automotive area could be good targets for an auto ad. The thinking is similar to that behind growing online advertising sectors like search and desktop marketing. Observe “hand raising” behavior that seems to indicate and interest, and serve ads accordingly.

“The market is going to open up,” said Nate Elliott, associate analyst with Jupiter Research, owned by Jupitermedia, parent of this publication. Elliott cited the interest ad servers such as 24/7 Real Media have shown in the area as a sign that, while still nascent, the area has a future.

“Behavioral targeting is very effective,” Elliott said. “When marketers see the results you get with behavioral targeting, they’ll be interested.”

Revenue Science began offering advertising-oriented behavior targeting about six months ago and since have garnered the Wall Street Journal, Dow Jones properties, CBS MarketWatch, Reuters, FinancialTimes.com and ESPN as clients. Requests are coming in fast and furious, according to Omar Tawakol, senior vice president of marketing for Revenue Science.

Tacoda, Revenue Science’s chief competitor, has signed up eight new companies in the last six months. CEO David Morgan noted that the pace of adoption is quickening significantly, with more and more inquiries and signups every month.

“We have about half of the top 15 newspaper companies in the U.S. [as clients],” David Morgan, CEO of Tacoda, told ClickZ News. The Tribune companies’ Web sites, Business Week, Weather.com and iVillage are all clients, as well as USA Today.

Tacoda debuted a starter version of its services in early March tailored toward the growing number of new adopters.

“What’s more important than signing new customers has been their success in the marketplace,” Morgan noted. “It matters less about whether publishers sign a contract. It has much more to do with our advertisers paying premium rates and buying advertising campaigns for targeting.”

Advertisers including Sony, Best Buy, BMW, Mitsubishi, Delta, Lufthansa, Sheraton, Macy’s, Victoria’s Secret, Verizon, GlaxoSmithKline, Allstate and Wachovia have deployed Tacoda’s behavioral targeting in the last couple of months, Morgan said. He estimated that about 500 campaigns are currently running using the technology.

Revenue Science’s Tawakol named Computer Associates as one of the advertisers using his company’s behavioral targeting. “Dozens and dozens” of the largest advertisers, top airlines, hotel chains, technology companies, financial services and technology companies “have started to play in this game,” Tawakol said.

“It’s a brand new market,” said Morgan. “It’s a very early market. We’re excited there’s a lot of interest.”

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