Behavioral Targeting Takeaways From ad:tech SF

I attended ad:tech in San Francisco a few weeks ago and was struck by several things. It was extremely well attended, shocking for an expensive event in a down economy. The tone was also surprisingly pragmatic, if not upbeat: the economy is in the pits and will stay there for awhile; how will we marketers cope? I visited with several vendors in the behavioral space and attended several sessions that touched on the topic. Below are some takeaways.

Epic Advertising

I interviewed Epic Advertising’s CEO at last year’s ad:tech, just as the company had changed its name and relaunched. It had just announced a new, sophisticated product in the behavioral space based on induced visit behavior with a complex proprietary algorithm. I was interested to see how its clients had taken to the product and behavioral targeting in general. Epic is in the enviable position of having one of its strongest quarters ever this year, based partly on the fact that much of the media it sells is on a pay-per-performance model.

Mike Sprouse noted that most clients have moved much of their online budget to performance-based buys. “We are targeting and delivery-platform agnostic,” he said. Epic has a variety of behavioral solutions, and it typically offers a mix in the media spend to ascertain which types will perform the best for each offer and each client. “It may be our [Performance CPM] product that works well; it may be contextual or more demographic based. We will play with the mix until the client is getting the best ROI we can provide,” Sprouse said. Another ongoing challenge in the behavioral area is that many client and media buyers really don’t understand the methodology and shy away from anything that isn’t easy to explain to clients (if they are an agency) or to upper management. But this isn’t a new problem, he continued, and is why Epic continues to educate and evangelize about its many excellent targeting capabilities.

Omniture

Omniture is fully invested in the concept of behavioral targeting and is constantly seeking to expand its offerings. Chris Duskin, senior director of product management, and I discussed the need to allow marketers to become more involved in the targeting process. No more the black-box concepts of before, where the supplier’s technology did all the work and marketers then had to use the results of vendor’s modeling — assuming the vendor’s methodology was the best that it could be. While there’s growing need for automation, enabling marketers to be engaged in the process will improve the outcome. Marketers want to be able to learn from behavioral testing, tweaking the models and apply ingthe lessons from those models to other marketing vehicles and opportunities. The trend and need for truly multichannel testing, marketing, and analytics is driving some of this exploration on Omniture’s part.

Google

Google soft-launched its interest-based marketing in mid-March, through its blog posts and public relations announcements. For example:

    We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching “interest-based” advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest — say sports, gardening, cars, pets — with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads.

But the search behemoth was pitching its program full force at ad:tech. It was quick to proactively address the privacy issue by allowing consumers to see and edit the information it has compiled about their interests and online activity. Google will give consumers and publishers the choice to opt out. All these are good practices and should hold the privacy advocates at bay for a bit.

Google is testing the program with a few dozen advertisers to start but plans to expand eventually. The company’s current plan calls for segmenting users across 20 categories and 600 subcategories. It has made clear that it won’t create categories for “sensitive” interests, such as race, religion, sexual orientation, or certain types of financial or health concerns.

I tweeted both my followers and #adtechsf followers for a reaction to this and saw no real concern in the responses. In one session on search, the moderator asked, “How many of you are afraid that Google is becoming too big and have privacy concerns?” Many hands went up. “Now, how many will take your business elsewhere?” No hands. That about says it all.

In all of my conversations, each vendor alluded to the impact of social media on their activities. Some felt it’s distracting marketers from the nuts and bolts of what they should be doing. Most are developing interfaces with Twitter and other social networking sites to become part of the conversation. Ad:tech 2010 will be even more interesting.

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