CRM - January 2008 - (Page 26)

BEHAVIORAL TARGETING Technology has enabled marketers to tap into behavioral targeting, allowing them to watch how individuals are interacting with the online experience and to predict, in real time, the best message to launch. For all marketers, having the ability to respond “in the moment” has become a crucial strategic advantage. “Companies don’t want to offer consumers products and services they don’t want,” says Richard Howe, chief marketing and strategy officer for data management vendor Acxiom. In the same respect, he says, “consumers are tired of getting stuff that has no relation to what they’re interested in.” What consumers want isn’t a secret anymore—and technology is empowering marketers to deliver. With advanced technology and a wealth of customer data, the growing importance of BT is evident by the burst of acquisitions in the space in 2007, most notably Google’s move in April to acquire online advertising pioneer DoubleClick for $3.1 billion in cash. If the deal goes through—regulatory approval was still pending at press time—Google gains access to an incredible store of information, making it even more at the vanguard of behavioral targeting and advertising. As one industry pundit put it, “The company could know more about Web surfers than they know about themselves.” In the aftermath of Google’s DoubleClick announcement, other acquisitions included Yahoo! snagging BlueLithium for $300 million and AOL buying Tacoda for an undisclosed price in September. These moves and others have led observers to suggest that the next golden age of behavioral targeting is around the corner. good or bad result, what’s interesting is that it’s unchanged from the results of a similar 2004 study, when “16 percent” represented a huge jump. That year, Nate Elliot, associate analyst at JupiterResearch, noted that the share of advertisers using BT went from 10 percent in 2003 to 16 percent—a 60 percent increase. Elliot had a presciently pessimistic view, however: He was quoted at the time as saying that, with the hype and explosive growth, the area would continue to flourish, but “it’ll never be a dominant force in the market.” As big ad servers get in the game, he added, “the technology will be commoditized,” hence making it executive officer of online media network Specific Media, claims that compared to targeting by category (e.g., “sports fans”), or by mere clickthrough rates, behavioral targeting has doubled marketing’s efficiency. Acxiom’s Howe says his firm has seen two to three times the return; one Acxiom user, Andrea Palmer, manager of interactive services at Baltimore-based advertising agency Siquis, estimates 30 percent to 50 percent lower costs of advertising for her client, Spirit Airlines. BEHAVE YOURSELF And there are other drawbacks to having a relatively young presence in the industry: “One of the most important things about behavioral targeting right now is that it’s really ill-defined,” Greene says, especially in terms of execution. (See “How Do You Define Behavioral Targeting?” on page 27.) Much BT is highly dependent on the data that consumers provide through their Web activity. Historically, explains Specific Media’s Vanderhook, companies that delivered adware—advertising-supported software—were the ones most often executing behavioral targeting. Every site a consumer visited was logged, triggering pop-up advertisements bundled within the adware. Not surprisingly, consumers became increasingly frustrated being interrupted by pop-up ads, marking their inevitable demise as a medium. Today, marketers have access to both customer identity (IP address) and customer personality (online behavior). Now, BT often relies on HTTP cookies—small pieces of data used to track and maintain the online actions of a user, such as sites visited and even items stored in an electronic shopping cart. “A company is only as good at behavioral targeting as the amount of data [it has] access to,” Vanderhook observes. So while the cookie history is in place, potentially relevant ads can be delivered, but once it is erased—or if the customer tries to access the same site from a different computer—“it’s like a brand new person,” he says. www.destinationCRM.com “ONE OF THE MOST IMPORTANT THINGS ABOUT BEHAVIORAL TARGETING RIGHT NOW IS THAT IT’S REALLY ILL-DEFINED.” difficult for others to rely solely on BT. Three years later, that’s turned out to be a solid prediction. And the future may be no better: Only 19 percent of marketers anticipate using the technology in the next 12 months. “Behavioral targeting has yet to gain broad usage, but it is certainly on the mind of a lot of online advertisers,” Greene says. As more marketers embark on this new wave, they will hopefully overcome what Greene reports to be their most persistent plague—finding the right audience. Meanwhile, for those who have successfully implemented behavioral targeting capabilities, the payoff has been tremendous. Tim Vanderhook, chief WHO’S WITH ME? How far around the corner remains to be seen. Much of the industry is still lagging behind the early adopters, according to Michael Greene, research associate at JupiterResearch. In a survey of 277 online advertisers, only 16 percent reported using behavioral targeting. Whether that sounds like a 26 CUSTOMER RELATIONSHIP MANAGEMENT | JANUARY 2008 http://www.destinationCRM.com

Table of Contents Feed for the Digital Edition of CRM - January 2008

CRM - January 2008 Contents Front Office Reality Check Customer Centricity The Tipping Point Facebook's About-Face On the Scene: Oracle OpenWorld 2007 CRM Market Set to Double Customers, Meet your Makers Required Reading Oh, Behave! Fine-Tuning the Channel Listen Up! The Master Piece Flying High on Customer Service Let's Get Digital The Big Rigs Get Revved Up Putting Asia in Your Pocket Secret of My Success Connect Re:Tooling Pint of View

CRM - January 2008

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