There has been a lot of buzz lately about behavioral targeting and its far-reaching implications in the online ad world. A few weeks ago, I covered behavioral and demographic targeting technology launched by Aptimus, Inc. These enhancements offer web advertisers targeted, qualified leads that focus on different audience segments. Google, MSN, and Yahoo! have also rolled out demographic targeting technology because media giants have figured out that the key to online advertising success is pinpointing who the face is behind the web surfing.
mSpoke, the Pittsburg start-up, whose technology has gone live since I explored their product back in March, is taking a slightly different approach to behavioral targeting by enticing consumers to rate the ads placed before them while they are rating online articles. But, in the end, the goal is of course to still increase online revenue for publishers.
But what about those other types of ad targeting? Are they still useful to the online advertiser? A report published in April by eMarketer, entitled “Online Ad Targeting: Engaging the Audience,” concludes that although online ad targeting is beneficial because it reaches an increasingly fragmented audience, reduces wasted impressions, and improves relevance for a campaign, the key disadvantage to targeting is it reduces reach.
But, the study explains that “if the ads are delivered to a high enough percentage of interested individuals, that same reduced reach can also greatly reduce wasted impressions and, thereby, cost.” The numbers somewhat support these pros and cons with the 29.7 percent growth in spending on behavior targeted online advertising in the U.S. in 2006, down from 42.7 percent in 2005 but predicted to rebound to 40 percent in 2008. Furthermore, the percentage of behaviorally-targeted online ad spending in the U.S. as a proportion of all online ad spending in 2008 is 9.6 percent, which is up from 7.7 percent in 2006.
Although the type of ad targeting that a marketer employs depends on the campaign, the study suggests that advertisers should utilize a mixture of targeting methods for best results. With 35.9% of senior marketing executives stating that 30% or more of their budgets are earmarked for targeting, it’s no wonder that 84% of U.S. advertising professionals cite the Internet’s more precise targeting of fragmented audiences as a prime benefit of online advertising.