Tacoda Proposes Behavioral Targeting Standards

In an effort to speed the growth of behavioral targeting, technology vendor Tacoda is proposing a basic set of standardized behavioral audience segments, which it calls Tacoda Targets.

“It’s become pretty clear that both buyers and sellers are interested in some sort of standardization,” Tacoda CEO Dave Morgan told ClickZ News last week. “Our objective is to create the most open and transparent building blocks for comparability, quality assurance and scale in the application of behavioral targeting. We’re using this as a good place to start a dialogue.”

The 22 segments are designed to make it easier for advertisers sites to understand and use behavioral-based audience targeting. By having a standard taxonomy of segments, advertisers can more easily compare behavioral targeting buys between sites, as well as make large-scale buys across multiple sites, Morgan said. Tacoda is building the standard segments into its technology to make it easier for its customers to use them.

Industry watchers say standardization is a major hurdle that must be overcome before behavioral targeting can see any significant growth.

“Standardization is a big issue for this industry. If every site uses behavioral targeting differently and defines segments in different ways, it’s too confusing for marketers,” said Jupiter Research analyst Nate Elliott. “Effective standards would go a long way toward making this sector more advertiser-friendly.”

The first 22 segments are simple by design, intended to be building blocks for a future framework. Categories range from Auto Buyers to Golfers to Small Business and Business Travelers. These segments are not newly defined, as Tacoda used its customers’ experience as a starting point.

“I’ve worked for the better part of three years trying to make things more complex,” Morgan joked. “It turns out that simpler is better. What’s needed to be successful is to be simple, intuitive, and transparent. Most importantly, it has to perform.”

By codifying these segments and hard-coding them into the Tacoda software, Morgan expects these targets to be widely adopted by publishers looking to make things easier for existing advertisers. He hopes they will help open up opportunities with new advertisers who have so far balked at spending their ad dollars on something they don’t quite understand.

“Some advertisers think it’s a science project. A lot of them have been slow to adopt online advertising in general, let alone targeting. This will show them that it’s simpler than they thought,” Morgan said. “It won’t be adopted unless it’s simple. Search took off not only because it performed well, but because Overture and Google made it easy to buy.”

Advertisers are accustomed to this sort of standardization in offline media, with television’s standard dayparting, radio’s standardized demographic breakdowns, and direct marketing’s Claritas PRIZM clusters. Tacoda looked at all available models and came up with its own version, which is aimed at helping speed the adoption of behavioral targeting, Morgan said.

Morgan points out this isn’t an attempt to diminish publishers’ unique offerings. Although standards establish some similarities, there’s no question each publisher presents its own unique package, he said.

“One thing that nobody wants is to put a segment standard out there that does nothing but commoditize the media. The segment is always secondary to the quality of the brand, the content, and the presentation by the publisher,” Morgan said.

While different vendors in the space have different methods of identifying a certain user with a certain segment, that does not affect the way the segments themselves are defined, he said, noting these segments are defined as fully open standards, with no proprietary technology involved.

“We’re not trying to put a stake in the ground. We’re thinking of this as a sounding board. Wherever the standards go, Tacoda will follow,” Morgan said.

Omar Tawakol, senior VP marketing at Revenue Science, a competitor of Tacoda in the behavioral targeting space, warns that the wrong kind of standards — like Tacoda Targets — could set back the industry instead of help it grow. “It puts the market at risk. What we need is to create standards based on output. Advertisers care about audience composition, not just common naming standards.”

Tawakol points to the difference in quality of an audience made up of people who have visited an auto research site like Edmunds.com and researched a particular model compared with an audience of people who read a story in a local newspaper’s auto section. While both groups could be called “auto buyers”, they are not likely to produce the same result, he said.

Morgan expects at some point, the standards will be taken over by an independent trade organization. Until then, the standards will be shepherded by a task force of Tacoda customers, as well as representatives from the advertiser, agency and research communities.

“By turning over control of the standards to the market participants, we believe that not only will this result in the best and most useful segments, but it will also insure maximum openness and transparency in the process,” Morgan said. “In addition, this type of process will make it easier to transition the effort to one or more trade association-driven efforts as they develop and eventually take over the standards development process.”

While having a trade organization control the standards is the end goal, it may not be as easy as it sounds. Of the leading industry organizations, the Online Publishers Association (OPA) has so far shied away from creating standards, and the Interactive Advertising Bureau (IAB) has many other standards to address before this one.

“Creating standards is really difficult, and nearly impossible,” said Elliott. “If Tacoda can at least standardize what their own clients are doing, that will be a good first step, but there’s still a long way to go.”