ADOTAS – A few months ago at a meeting of online marketing lawyers, Federal Trade Commission Northeast Regional Director Leonard Gordon tried to quell regulatory concerns over behavioral targeting by commenting that the FTC doesn’t want to “kill the golden goose.”
According to the latest research by the National Advertising Initiative, the eggs are more golden than ever. In its first-ever study of the pricing and effectiveness of behaviorally targeted advertising, data from 12 major ad networks showed that such marketing garnered 2.68 times as much revenue per ad as its non-targeted “run of network” cousin.
And fascinating enough, the relative cost of behavioral targeted ads was 2.68 times as much as standard ads — CPM of $4.12 vs. $1.98.
A smaller subset of survey respondents displayed conversion rates of 6.8% for behaviorally targeted ads, compared to 2.8% for run-of-network ads.
Increasing from 16.2% in the first quarter to 19.4% in the fourth, behaviorally targeted ads averaged 17.9% of advertising revenue for the networks in 2009. More than half — 54.6% — went toward the purchase of inventory and was shared with publishers.