April 20, 2006

Behavioral targeting is a bit like seeing inside the minds of your potential customers before you decide to advertise to them or not. Looked at another way, it can sort of predict what their actions might be given a certain situation.

"Behind search advertising's great success is self-targeting. Users reveal their interests by the keywords they enter," says David Hallerman, eMarketer Senior Analyst and author of the new report, Online Ad Targeting: Engaging the Audience.

"As with search, self-targeting rather than media manipulation is the key to engagement marketing or behavioral advertising."

eMarketer estimates that marketers will spend $1.2 billion on behavior targeted online advertising in 2006. And in only two years, spending on behavioral targeting will pass the $2 billion mark.

These spending gains are being driven by three factors:

Behavioral targeting helps marketers get better results from fewer impressions.

Publishers like the fact that behavioral targeting delivers more revenue from some lesser pages.

Users tend to find ads targeted by their actions to be more relevant to their needs.

Of course, marketers have always employed targeting of some kind in their advertising. In a CSO Insights survey of senior marketing executives conducted last year, over 60% of respondents cited the use of demographic and geographic targeting.

"Implicit in the desire to target advertising is the recognition that its opposite, mass-market advertising," says Mr. Hallerman, "is no longer as viable as it was in broadcast television's heyday."

In fact, only 28.7% of respondents in a recent American Association of Advertising Agencies survey believe that such untargeted advertising will be very effective by the end of the current decade versus the 58.2% who call it somewhat effective.

That may be why 84% of US advertising professionals cite the Internet's more precise targeting of fragmented audiences as a prime benefit of online advertising.

"Advertising online offers marketers more ways to target than they get with most other media," says Mr. Hallerman. "While digital ad targeting methods all have their analog counterparts, the interactive and dynamic tools that the Internet adds to the game give targeting a new face."

Source: eMarketer