New Buzzword: Behavioral Targeting, at Ad:Tech 2006

The biggest new buzzword by far at Ad:Tech was "Behavioral Targeting." Suddenly every company had a "behavioral targeting" solution. Sure, and I have a bridge to sell you.... These days "behavioral targeting" can mean at least three things -- and you need to know the difference between them.

1. Major Search Portals, such as MSN Search, followed closely by Google AdWords and Yahoo! Search Marketing, are introducing ad targeting based on the demographic information they have on those who have MSN/Hotmail, Yahoo! Mail, or Google/GMail.com accounts. The way this works is that a cookie identifies you when you appear on one of these sites and ties your session to the demographic information they have on you.
   
   My Yahoo! ID Card under my account, for example, contains such data as gender, birthdate, industry, occupation, home address.
   
   Potentially, advertisers will use these main search portals to show ads based primarily on demographic information, and not show an ad where the desired demographic profile wasn't present or there was no information. Advertising for general consumer audiences could really benefit by this kind of targeting. It may not be here quite yet, but it's on the way.
   
   When you delete your identifying cookie for one of these search portals, no one will know who you are, but as soon as you login again, the connection is reestablished and cookie placed again.
   
   
2. Large Ad Servers that serve banners on hundreds of top sites are able to develop demographic information about individuals who surf through several of their clients' sites. Identified with a cookie tied to an online database, every time an individual went to a different website, that information would be added to a developing profile of that person's likely age, gender, and interests. As the profile becomes more mature, advertisers can use that information to select the desired demographic characteristics to be present for their ad to be shown. When an individual deletes the ad server's cookie, the connection between that individual and their profile in a database is lost, but will be rebuilt from scratch as the individual continues to surf, but now with a new cookie.
   
   A few years ago DoubleClick got bad publicity for collecting personally identifiable data. This time around, companies such as BlueLithium.com aren't collecting personal identifiers, but will know who is most likely to respond to their inventory of ads, and show those with the best potential for a response.
    
3. Ad and Affiliate Networks (which seem to be merging) claim "behavioral targeting." But as I inquired, I found that this meant something like the following. Publisher websites in their network are studied to see what kinds of ads respond the best on which sites. As this profile develops, the ads are only shown on the sites where they get the best response. Apparently, they don't use cookies to tie individuals to individual profiles.

In my opinion, this third category of Ad and Affiliate Networks have wrongly claimed the term "behavioral targeting." Before you advertise through companies that claim "behavioral targeting," inquire so you know precisely what they mean by the term. Ad and Affiliate Networks aren't necessarily bad and may be quite effective for your company, especially if they are true CPA (cost per action) or CPS (cost per sale) models (such as traditional affiliate programs).