This month, we speak with Nick Johnson, chief revenue officer of Revenue Science. He’s just returned from Europe with increased enthusiasm for the role of behavioral targeting across the globe.
Q: What’s Revenue Science’s position been in the international space?
A: All along, our belief has been that for mature online markets, behavioral targeting is a critical part of future media plans.
Revenue Science has led the international and multicultural expansion of behavioral targeting. For example, the U.K. digital advertising market is forecast to be worth £2 billion in total in 2006, and Revenue Science has been present there since 2004. Our clients in the U.K. include FT.com, Guardian Unlimited, Reuters, Associated New Media (“Daily Mail“), “The Times,” and leading ISP Wanadoo. Year to date, over 100 advertisers have run behavioral targeting campaigns through our U.K. publisher base.
We also brought behavioral targeting to Japan for the first time through an exclusive agreement with Digital Advertising Consortium (DAC), a Japanese advertising business integrator that represents major Japanese Web sites, including Yahoo Japan, MSN Japan, and Infoseek. DAC started the trial service on 10 select publishers across DAC’s original ad network that will deliver about 90 million page views per month.
Domestically, Univision is a client that, though based in the U.S., is an important example of the cross-cultural growth of behavioral targeting. The site boasts nearly 200 million visits and 3 billion pages over past 12 months.
Q: How did you determine there was international need?
A: Our key metric for expansion internationally is to target the top 10 media markets, which all show consolidated online media budgets and strategic publishing partners. U.K. and Japan were the first to move, but we’re seeing great interest across the other prime markets in Europe, namely Germany, France, Italy, and Spain.
Q: Why did you start with FT.com in the U.K.?
A: “The Financial Times” deal was our first transcontinental partnership. There was great interest driven through North America, while the European sales and operations team quickly saw the value and were anxious for the capability to be deployed in their headquarters. Though based in the U.K., FT.com is a global financial brand with a large international readership, much of it here in the U.S. The financial audience is one we went after aggressively with clients like Dow Jones, Reuters, MarketWatch, etc., FT.com was a major part of that effort.
Q: What were the results from this partnership, and is it still in place?
A: FT.com is a longtime customer and has achieved some great results for its advertisers with behavioral targeting. One example is a campaign for Japanese telecom giant NTT DoCoMo, designed to raise brand awareness among opinion leaders and business decision makers. The behavioral targeting component generated significantly better results — some nearly 200 percent better — than run-of-site ads in key metrics such as aided brand awareness, online ad awareness, and aided ad recall.
Q: How do you go about expanding internationally? Is the demand coming from the publishers? If yes, do you know why?
A: It’s coming from the buy side and the sell side. Demand for behavioral targeting is very strong, and, due to our successes in North America, international markets were primed for expansion. Global holding companies have been able to read about and research the growth of behavioral targeting and give a lot of thought to execution in advance of the technology being available in market. Additionally, they’ve been able to compare notes with their peers about executing behavioral targeting buys as they anticipate building the capability in market. Our U.K.-based footprint is quite broad, so agencies are prepared to use behavioral targeting and able to make campaigns work across publishers at scale.
Q: What have results been with non-English entities?
A: Our relationship with DAC enabled us to localize our product for double-byte characters. This was critical to our proprietary behavioral targeting technology that enables publishers to create segments based on page-level content. The same holds true for Univision.
Q: How is behavioral targeting different internationally compared to the U.S.?
A: In the U.K., the adoption rate is outpacing the U.S. This is in large part due to the excitement that has been generated in the press and from live campaigns over the last 24 months. In addition, we worked through some slight growing pains in the U.S. so by the time we rolled out behavioral targeting to U.K. publishers and advertisers, all implementation and logistical issues were handled very smoothly.
Q: What are the major developments that you foresee internationally in the next 12 months?
A: As more ad dollars make their way online around the globe, the demand for a solution to expand constrained quality inventory will grow. There’s substantial competition for all media dollars, and, as more money moves online, the prevalence of quality inventory is becoming scarce. Further, the ability to more deeply target content will enable publishers to build more customizable segments. We see steady, impressive growth in all international markets where behavioral targeting is available and new interest coming from markets where behavioral targeting hasn’t yet penetrated.
Q: What are the major challenges internationally?
A: Aside from cultural differences, many challenges are the same as those we faced in the U.S.: the need for education, slight resistance to something new, a wait-and-see attitude, etc. Those are really the same wherever you go.
One key distinction between the U.S. and international markets is that the U.S. is the largest media market in the world. There’s substantial competition for all media dollars. Internationally, the markets are seeing the same growth, but it’s earlier in the curve. This is driving the conversation about the need for behavioral targeting. However, as stated above, they soon find the same challenges we have in the U.S., just at a slightly different pace.
There’s also the education issue. For example, most behavioral targeting stops at the section level of a site (like Automotive or Sports). [Our] technology is more effective because it looks at every word on a page, regardless of the section, to generate deeper and more accurate information on user interests. We have to make sure that’s understood and valued correctly.
Q: What’s consumer reaction been like?
A: Again, we’ve seen it follow relatively the same path as in the U.S; some initial low-level skepticism, some privacy concerns, and then a growing acceptance as consumers understand their privacy will never be compromised and as they find more relevant advertising really enhances their overall online experience.