Behavioral targeting grew both in breadth and depth in 2006, with new capabilities and new players fueling the growth of one of the most successful online marketing approaches. The areas of growth were diverse, reflecting a rise in both technical capabilities and awareness among media players and their customers. As media properties pore over numerous case studies of marketers who touted their programs’ behavioral components and received RFPs (define) specifically requesting this capability, they stepped up to include or enhance similar options in their mix.
The Resurgence of the Ad Network
Not only have a number of new ad networks been introduced, many networks and portals have evolved and refreshed their technology and targeting capabilities. In an increasingly crowded field, many networks are trying to find their point of differentiation. Right Media introduced an auction-based media management system, for example. Specific Media delivers a premium network with top 450 sites, as reported by comScore. Several networks have newly offered retargeting, including Vendare Media, Undertone, and Tacoda. Some have gone for sheer spending, adding sites to their lists and impressions to their inventories.
Additional Targeting Options in Portals
Portals adopted and refreshed behavioral targeting competencies in 2006. In September, MSN began utilizing behaviorally targeted ads across MSN sites, and Yahoo revamped its behavioral targeting platform in the summer to include a new matching system, which identifies the various stages of the purchasing process. Further segmentation options are giving portals a decided selling point against the reach of networks.
Individual sites are now stepping up and offering more advanced behavioral targeting capabilities within their sites. This allows them to profile site user behavior and present relevant ads to users outside the related content areas. This may be Behavioral Targeting 101 to some, but it’s new to many standalone sites and a significant advancement now seen even in smaller sites. Behavioral targeting allows individual sites to monetize inventory on less trafficked pages and helps substantiate their CPMs (define).
Mobile carriers are adopting behavioral ad technologies. Sprint Nextel displays ads on its deck with home-page advertising that allows it to target cell phone users by their behavior. In the past few weeks, Verizon Wireless and AT&T announced similar offerings. We may still be a long way from effective mobile advertising in the mode of Europe or Japan, but 2007 will be a year to watch in the U.S. A lot depends on hardware and infrastructure advances in the space.
What’s New for Advertisers and Agencies?
- Increasing control over the planning process and improved visibility. Networks are beginning to offer greater transparency, for instance, with site opt-out lists. This change came about partially because of the different needs of the brand marketers using networks for behavioral targeting. Behavioral targeting isn’t just for direct marketers anymore.
- Increasing competition. Growth cuts both ways here. More opportunities exist for behavioral targeting, but many, many more advertisers and agencies have jumped on the behavioral bandwagon in the past year. Yes, price pressure inevitably follows increased demand, but the growth of new suppliers has diminished the effect.
- Enhanced targeting segmentation. Marketers now have a greater ability to exclude certain cookie pools and certain behaviors and are offered additional targeting channels and subcategories. DRIVEpm offers targeting based on PRIZM clusters, for example. Also new this year is search retargeting, which places a pixel in the search stream, allowing creative served to each user to be more relevant.
- Behaviorally targeted video. In this year of YouTube, how could we forget video? In June, BlueLithium launched AdRoll, a video-streaming ad network with behavioral targeting capabilities for in-stream and in-banner placements. In May, Tacoda partnered with Tremor Network to develop behaviorally targeted in-stream video ad roll, similar to Blue Lithium’s product. Advertising.com and AOL each also introduced similar behaviorally targeted video over the summer.
Where will all this growth take us? Will networks continue to overlap, giving us strangling duplication, or will they coexist to offer extended reach? Will the industry come together to establish standards, including language commonalities, to dispel the confusion surrounding the space? We’ll explore the challenges and obstacles in the second part of this column. Stay tuned.
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