ADOTAS EXCLUSIVE — Online privacy issues around behavioral targeting (BT) for display advertising are causing chagrin among advertisers, leading some to look elsewhere. Yet with the uncertain economy and crowded theater for customer mindshare, they need more than ever to reach their audiences, engage them effectively, and drive additional return on ad spend. So what to do?
As soon as Charter Communications voiced concerns about the controversial NebuAd behavioral targeting system, two other ISPs immediately distanced themselves from behavioral as well. In many ways, behavioral has become the “hot potato” issue around targeting for Internet advertising. The privacy issues surrounding BT are nothing new either and go back as far as 2005, or even earlier. In a recent survey of online consumers conducted by Burst Media, only 2 out of every 10 respondents approved of having their information tracked, even if it meant more relevant advertising.
Another factor is that there remains a great deal of confusion around what BT actually does versus some of the other, historically more negative approaches like spyware and certain forms of adware. Add to this the fact that Internet users are not always fully aware of the role that things like cookies play in the targeting food chain. According to a study by JupiterResearch, 40% of Internet users delete cookies from their primary computers on at least a monthly basis. Other studies have put the figure as high as 55%. This behavior stems from an innate desire users have to retain control over their computers—and this has big implications for advertising and marketing firms that depend on cookies for BT.
Luckily for organizations that are bumping into these kinds of issues, there are a bevy of solutions in the marketplace that can perform as well (or even better) than BT when it comes to performance and efficiency lift for both direct response (DR) and brand advertisers. Now don’t get me wrong, I am not anti-behavioral, and many companies deploy unobtrusive behavioral methods that are working very well. However, if and when BT-related issues rear their ugly head, there are safe harbors from them in things like contextual targeting and other avenues. Marketing Sherpa’s 2008 Online Advertising Handbook surveyed almost 600 online advertisers from a range of companies and found that 40% of the advertisers surveyed felt that contextual targeting yielded a higher return on investment (ROI) while 36% preferred behavioral.
It is worth reiterating that while the invasive forms of behavioral advertising that have drawn the ire of companies like Charter and numerous other organizations and individuals, there are very legitimate and useful forms of behavioral advertising. As commonsensical as it may seem, I would advocate a mix of tactics that bring together the best elements of non-intrusive behavioral, contextual, ‘traditional’ search marketing and banner advertising and more. So while I’d prefer the industry find multiple ways to target for efficiency and performance, including non-intrusive behavioral methods, which many companies do well, there have long been targeting solutions that completely side-step the subject of privacy.
In addition to tried-and-true search marketing and traditional banner advertising, contextual can be sublimely elegant in this aspect, as it can draw its relevance directly from the impression in real-time to match the perfect ad to the user based on what they happen to be reading at the time. This avoids saving any bits from the user’s historical actions, yet can serve up an even more relevant ad at a time when users are interested in learning more about the subject and they are most receptive to a company’s message.
Contextual solutions can also bring a level of brand safety to the game that no other targeting mechanism can match today. When you take the time to deeply analyze the content and subsequent meaning of a particular impression, you have as a byproduct the ability to filter out undesirable content—be it hate or pornography or even simply competitive messages. And the inverse becomes true, as well.
With a deep contextual engine in the process, advertisers can also go out and target very specific competitive content. With the true meaning of the impression in-hand you have a safer bet to find a clean, clear, well lit space for your brands to live. This is especially important as advertisers try to leverage the long tail of exploding user generated content, sometimes referred to as the passion tail, where the real engagement lives.
And the applicability is as broad as the industry. Not only can advertisers and their agencies of record leverage these new technologies to lift performance and recognition, even the ad networks, exchanges, publisher optimizers and publishers themselves are already seeing great benefits from contextual analysis. Ad exchanges are the perfect example as open, free market ecosystems of display advertising partners all coming together under one umbrella. When you plug a contextual analysis engine into the mix, everyone from the advertiser to the publisher can benefit from targeting that is both unobtrusive and very focused.
In one case study we recently performed, we found a 76% lift in click through rates (CTR) for a direct response advertiser in a contextual environment that determined meaning down to a page level, but we also saw publishers’ yield increasing when advertisers could more accurately target their inventory. Historically, categorization has been at the section level and self-declared. But when you take the extra millisecond to determine true meaning on a page level, publishers can begin to expose much more highly targeted content to advertisers who, upon seeing the performance lift, are generally willing to pay more per thousand (CPM) because their campaigns are working much better.
So if behavioral issues begin to make you rethink your targeting needs, there exists a sound safe harbor for advertisers and publishers in contextual solutions. You can get all of the benefit of the most relevant ad possible—and with it the ability to drive up yield for publishers while creating a safe environment involving both traditional and social content in which brands can flourish.