The Aim of Behavioral Targeting

The Aim of Behavioral Targeting

JUNE 12, 2008

Why isn’t behavioral targeting a hit with advertisers?

Behavioral targeting offers many potential benefits:

  • For advertisers, effective behavioral targeting leads to ad campaigns that are more likely to sway their audience.
  • For publishers, it can mean making more money from undersold or unsold ad inventory.
  • For the public, it means the ad-supported Internet might become more relevant.

The promise of behavioral targeting is huge, but overdue.

eMarketer estimates that US spending for behaviorally targeted online advertising will reach only $775 million in 2008.

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"The growth of behaviorally targeted online advertising has been
delayed by incomplete development of technology, brand marketers that
prefer to have their ads appear with relevant content and concerns over
violating consumer privacy," says David Hallerman, senior analyst at
eMarketer and author of the new report, Behavioral Targeting: Marketing Trends. "But a number of things are changing."

In fact, eMarketer projects that behaviorally targeted ad spending will reach $4.4 billion by the end of 2012.

Behavioral targeting segments the audience based on observed and
measured data, such as the pages or sites users visit, content viewed,
search queries entered, ads clicked, information share on social
networks and products placed in online shopping carts. This data is
combined with the time, length and frequency of visits.

"Recency counts a lot, too," says Mr. Hallerman, "data from
two weeks ago is far less accurate at predicting interest than that
from two days ago."

Behavioral targeting is getting increasing attention from
advertisers, publishers, the public, politicians and mainstream media.
For now, though, it contributes little to total US Internet ad
spending—only 3% for 2008.

"When pegged against the display online ad formats that are
typically used for behavioral targeting, however," says Mr. Hallerman,
"the importance of behavioral targeting to non-search advertising
growth becomes clearer."

Nearly one in 10 content-site ad dollars will flow from
behaviorally targeted advertising in 2008. That will rise to roughly
one in four by the end of 2012.

"It is unclear how much display ad spending will increase
behaviorally targeted ad spending, in contrast to how much behavioral
targeting capabilities will increase display ad spending," says Mr.
Hallerman.

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