Consumer Attitude towards Behavioral Targeting

A recent report titled Behavioral Targeting Attitudes:The Privacy Issue by eMarketer, explored consumers attitude towards online tracking and behavioral targeting. There was a similar study by TRUSTe in April. This report builds on that study and few other surveys and provides an analysis of the consumers attitude toward Behavioral Targeting.

The conclusion of this report was exactly what I have been advocating. According to the report

online marketers might do well to develop transparent methods of letting the audience know when and how their Web history data will be used, the benefits they can receive in exchange for allowing it to be used and a clear, easy opt-in mechanism for informed consent.

I shared similar views in my post titles 5 Step Process to Ease Privacy Concerns Regarding Behavioral Targeting.

The key question this report tackles are

• What will encourage people to accept more ad targeting?


• Are consumer privacy concerns a deal breaker for
  behavioral targeting?


• How much transparency will marketers need to allay
  consumer concerns?


• Are all methods of behavioral targeting data collection equal?


• Will the government limit how online companies can use
  consumer data?

Some of the highlights of this report are

1. Over 87% of the respondents to TRUSTe survey said that at least three quarter of the online ads are irrelevant


2. 41% of the users are more willing to pay attention to personalized advertising


3. 75% of internet users are interested in receiving personalized ads


4. 59% of the respondents to Harris Interactive Poll responded that they are not comfortable with ads or content targeted to their personal interests based on their internet usage

The above findings create an interesting dilemma for marketers. Consumers want relevant ads but are not comfortable with being tracked. However, it also provides an opportunity for Behavioral Targeting companies to step up and innovate new ways to provide relevant ads while easing the concern about tracking.

Marketers and privacy officer’s need to keep in mind that the negative attitude towards tracking and targeting is not limited to Behavioral Ad networks such as Tacoda and Revenue Science etc but it also applies to content targeting and on-site targeting provided by tools such as Test&Target by Omniture, Optimost/Interwoven etc.

You can get the full report at http://www.emarketer.com/Article.aspx?id=1006407

Comments?


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Behavioral Targeting Standards Consortium

Revenue Science is announcing a new initiative call Behavioral Targeting Standards Consortium (BTSC). The purpose of this consortium is to put some standards definitions and best practices for behavioral targeting. This effort hopes to the form an association of diverse key industry players who will help shape these standards.
According to a press release by Revenue Science
“As the behavioral targeting industry continues to grow, confusion surrounding the technology has also expanded along side it. How does behavioral targeting differ from audience retargeting? What constitutes an audience segment? How are segments constructed and where does all this data come from? How should behavioral targeting be measured? These are questions the industry is hearing more and more. Without standards around these issues, it can be difficult for advertisers to plan and execute behaviorally-targeted media buys or measure performance.“

As ad networks are spring up every day claiming to do Behavioral targeting I believe there is a need for such a consortium because all behavioral targeting companies are making up terms to confuse advertisers, publishers and consumers. Last year Revenue Science touted that are reaching over Billion behaviors a day. “Reaching Billion Behaviors” is something I called confusion because it is not clear how you define a behavior. In a blog post last year I showed how you a network can reach billion behaviors just by having one user view 30 pages on a site.

I am not too sure if a behavioral targeting network like Revenue Science is the right entity to lead this initiative. According to Media Post article, in 2004, Tacoda proposed a set of 22 standard behavioral targeting segments to simplify the media-buying process--ensuring that advertisers who bought "Auto Buyers" as a segment on one site would get an audience that exhibited the same quality of behaviors on another site. Competitors were concerned that the standards would favor Tacoda's operating model. Other companies have also attempted to put forth their own standards since then but still too much ambiguity in the market.

Last year Revenue Science released a site called HowToTarget.com, a site aimed at educating consumer, publishers and advertisers on what Behavioral Targeting is. The sites’ promise was to provide articles, events, and success stories from industry experts and eventually grow to include an interactive section where users can share their questions, ideas and experiences with behavioral targeting. It is almost one year and all I see is case studies and discussion from Revenue Science only and that too is very minimal. Maybe it is lack of coordination in the industry and this consortium will help or maybe it was just a short term marketing ploy.

Let’s hope this consortium does take off. If you are interested you can join the consortium at www.btstandards.org to join, and the consortium's first meeting will be held at OMMA Global Hollywood in March. Keep in mind Revenue Science will have you email (the thank you email come from marketing).

ISP based Behavioral Targeting

In an articles titled Watching What You See on the Web Wall Street Journal talks about ISP (Internet Service Provider) based behavioral targeting.

ISP based behavioral targeting idea has been kicked around for some time and NebuAd is one of the first company that made a product know as “deep-packet inspection boxes” for ISP to track user behavior online and then serve ads based on these behaviors.
This kind of targeting enables ISP’s to be a player in growing behavioral targeting market and generate a new stream of revenue.

This kind of technology is beyond simply using anonymous tracking. ISP do have a lot more information than just the browsing behavior. They have name, location, age, social security number (SSN). They know what time users login to their machine, when is the internet being used, what kind of sites are visited at what times, which sites provided information before a user made a purchase etc etc. This is far more information than companies like Revenue Science or Tacoda has and obviously can provide better targeting than Revenue Science or Tacoda can do.
However this also raises far more privacy concerns than companies like Revenue Science and Tacoda raise.

According to the article
The technology does raise privacy issues. The Internet-service providers often know other information about consumers, such as their names, locations and age and income ranges, which can be very valuable to potential advertisers, especially when combined with Web browsing habits. "Some of these [Internet equipment] guys are traveling in dangerous territory," says Emily Riley, an advertising analyst with Jupiter Research. "Should one company have all of that data in one place? It's a little troubling."


Other than user privacy there is another huge issue that this article did not talk about. In a network like Revenue Science or Tacoda publishers and advertisers (data providers) have to opt-in to participate. If a publisher/advertiser does not want to enable advertisers to use their data then they simply do not participate in the network. Advertisers can also choose to just use their site’s data to be used to only power their own advertisements. E.g Delta airlines can choose to participate in a retargeting campaign on a network like Revenue Science. They can retarget all the users who viewed fares to a particular destination but left the site without buying the ticket. To do so they will allow the network to collect information on all those users whom they want to target and then only allow the network to use those behaviors (users) to target their ads only. Alaska airlines cannot use Revenue Science and target their ads based on the behaviors on Delta airlines network. This is an explicit agreement between the publisher/advertiser and network.
However in case of ISP based targeting; data providers (publishers, advertisers and other sites) don’t have to opt in. They are opted in by default. Using the example above, a user’s behavior on Delta airlines site (and also information about who clicked on Delta’s ads across internet) is captured without Delta Airlines explicit approval. Now, ISP’s can use that information to power Alaska airlines advertisement and drive all those users, who could have purchased their tickets from Delta, to Alaska airlines. I am sure Delta won’t be happy about it. This applies to every single site on internet, they do not have an option their data will be used and in most cases to power competitors ads, this is a huge deal. I think it is, what do you think? I am sure there will be advertiser backlash too with this kind of technology.

It is also not clear to me if the ISPs will work with individual publishers or networks and provide behavioral data to power their ads on publishers inventory or if they will override publishers inventory with their own ads (which will probably cause sudden death of ISP based targeting) or if they will do popups (pop under) creating new inventory. NebuAd does however have a service for publishers where publishers can use their services on their own inventory, however I am not clear how ISPs plan to use it.

As I predicted earlier this year Behavioral Targeting has become a very common term among marketers. To cash in on this phenomenon a lot of new technologies and companies are springing up, I expect this trend to continue in 2008, we will see more innovation in coming month. Mobile and TV behavioral targeting is next in line too.

Questions/Comments?

XChange, Web Analytics 3.0 and Behavioral Targeting

I am back from from XChange, a conference organized by Semphoic in Napa last Thursday and Friday. The Conference consisted of many small discussion groups ("Huddles") hosted by facilitator experts in specific topic areas. I felt that this was a great way to have all the attendees participate in the conversation. In most of the conferences it is usually one way communication (speaker to audience), even though there is an opportunity to ask questions still only few participants are involved, but these types of huddles provided a way for every participant to talk about their experiences and voice their opinions.

I lead the huddles on Behavioral Targeting and Practical Approach to Online Campaign Measurement.
Eric Peterson of Web Analytics Demystified was the keynote speaker. As always Eric is fun and informative to listen to. In his keynote he talked about how we are fast moving (already are) in Web Analytics 2.0 era and introduced the concept of Web Analytics 3.0, mobile analytics (see side note). Attached is the pdf of his Keynote presentation.

It was a great event and I congratulate Gary, Grace and other members of Semphonic team for arranging such a great event. I look forward to the next year’s event.



Gary Angel and I at XChange


Picture courtesy Eric Peterson

In case you could not make it to XChange and missed my great huddle on “Behavioral Targeting”, you have another opportunity to listen my views on Behavioral Targeting at eMetrics in Washinton D.C. eMetrics is another great conference that brings the participants from all around the world. Last eMetrics in San Francisco was the largest to date, the one is D.C. is expected to bring even more attendees.

Side Note: Eric and I later discussed how I did some early mobile analytics work for one of my clients, a leading mobile services provider, while I was a digiMine (now Revenue Science). At that time we were still trying to figure out the whole mobile analysis. Our solution was a hack; we used wap gateway logs and converted them into web logs format. Phone number was used in place of a cookie. It was not the best solution but given what we had it was great and helped us analyze and meet our business goals. Now the technology is changing and I am sure web analytics tools will become sophisticated enough to cater to the measurement, analysis and optimization needs. I even put together a presentation on how Behavioral Targeting can be deployed combining the web and mobile data; however, this never reached anywhere (long story) but I know it was coming. Revenue Science just announced Mobile BT, more on this later (Disclaimer: The presentation I put together has nothing to do with Revenue Sciences new Mobile BT offering, like I said my presentation never reached anywhere except one person).

Behavioral Targeting better than Contextual Advertising

Finally a new study is out showing the value of Behavioral Targeting. AOL and Revenue Science commissioned
JupiterResearch to conduct an independent unbiased study to find the effectiveness of Behavioral Targeting.

The results were based on 2035 respondents answering 25 questions.
Key Findings of this study

1. Behavioral ads outperform contextual ads by up to 22% (I think it is the CTR that was compared).


2. 66% of the online user acted as a result of viewing online ads).


3. 14% more online consumers are more receptive to behaviorally targeted ads than to contextual ads. That is 63% of the total audience.


4. 93% of the BT receptive audience shop online


5. BT receptive audience




• Spend more online


• Shop online more often


• Have higher income




6. Online Shoppers (Frequent, Infrequent) and Non Shopper are all more receptive to BT ads as compared to Contextual Ads.


7. At least 10% more purchase intenders across 14 categories noticed BT ads as compared to contextual ads. The categories used in this survey were financial services, Auto, Travel, Health Products, Consumer Electronics, Computing Products, Telecommunications, Entertainment, Classifieds, Pharmaceuticals, CPG, Fashion/Style, Education Services and Government Services
   

"We're glad to see that the voice of the online consumer echoes our position that behavioral targeting is more effective -- for advertisers, publishers, and for consumers --than contextual advertising," said Marla R. Schimke, VP of marketing at Revenue Science, in a statement. "This study also reaffirms our belief that Internet users favor advertising relevant to them personally and that advertisers should employ behavioral targeting campaigns to maximize their return on investment."
Source:Information Week

Further Consolidation in Behavioral Targeting

Remember my 2007 prediction about consolidation in Behavioral Targeting space?

In July AOL bought Tacoda , earlier this year Google acquired double click, Microsoft acquire aQuantive and Yahoo acquired RightMedia. The latest is the purchase of BlueLithium by Yahoo. All these acquisitions bring three main things to these companies:

1. Display advertising capabilities


2. Reach (Number of user they can reach on the internet)


3. Behavioral Targeting capabilities

Unlike behavioral-targeting-only networks such as Tacoda and Revenue Science, BlueLithium leverages all major targeting capabilities to produce optimal results.
BlueLithium targets ads based on (source: BlueLithium.com):

• Behavioral targeting


• Demographic targeting


• Contextual targeting (choose from 16 content channels)


• Geotargeting


• Zip code


• Day part


• Operating system type

So far yahoo has been involved with Behavioral Targeting on their site. With this acquisition yahoo’s display advertising (and behavioral targeting) will extend beyond their own network.

This space is becoming interesting. Like I said earlier this month , It’s a Targeted Targeted Targeted World, you can run but you can’t hide. Behavioral targeting is also coming soon to the TV in your house. (Another company that uses BT is eBay, yes they also are engaged in Behavioral Targeting, you can read about it at Media Post’s Behavioral Insider

Want to talk more about Behavioral Targeting? Come to X Change conference organized by semphonic, I will be leading the huddle on Behavioral Targeting. Can’t make it to the conference but still would like to know how to engage in Behavioral Targeting? Contact me at batraonline at gmail.com.

Consolidation in Behavioral Targeting Space: AOL buys Tacoda

In my 2007 Predictions I predicted
“Only few main behavioral network players will be left and some of the existing ones with poor networks will either go out of business or be sold.”

Well, since then we have seen consolidation in this market earlier this year, Google-Doubleclick, MSN-Aquantive, Yahoo-Rightmedia now the latest is AOL-Tacoda.
According to NYPost’s article Aol has an Eye on Your Business, AOL is moving into the behavorial-targeting ad market with a deal to purchase Behavioral Targeting Firm Tacoda.

“Tacoda, which will operate as a wholly owned AOL subsidiary, is one of several online ad firms that use "behavioral targeting" techniques to track Web surfers' habits. Through its so-called "Audience Network," Tacoda helps marketers tailor ads to individual users for such things as cars or computer equipment. “
“…While not referring to any company in particular, [Andy] Falco did concede to The Post that Tacoda "did have other choices, but they choose to come to AOL."

I am sure this puts Revenue Science (Tacoda’s biggest rival) in sort of an odd position because AOL was one of their biggest customers and were probably competing with Tocoda to be acquired by AOL.

Next acquisition target: Revenue Science. We will have to wait and see who buys them? Any takers? Valueclick?

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Behavioral Targeting: Audience of One

This morning Washington past had an article titled “Web Ads with An Audience of One” discussing the growing use of Behavioral Targeting.

I have been writing about
Behavioral Targeting since I started this blog and have been predicting growth of behavioral targeting. MSFT/aQuantive deal did not come a s a surprise to me, I expected it. Behavioral Targeting is going to be very prevalent especially now when all three MSFT, Google and Yahoo have built their capabilities are building them.

This article resurfaces the privacy concerns, as I wrote in my article Google Doubleclick Deal concerns Privacy Advocates the best way to deal with privacy is to move from opt-out to opt-in model.

…."I believe that if consumers are provided proper education (I will write about consumer benefits in one of my future posts) than they can infect benefit from Behavioral Targeting. It will be a win-win situation for all the parties involved. Proper education and disclosures by advertisers, publishers and networks will ease the concerns regarding Behavioral Targeting. Consumers have the right to opt out of Behavioral Targeting but what is lacking is proper education on how to do so. The networks currently opt-in users by default; however, in my opinion the proper process should be opt-out by default and opt-in if user chooses to opt-in, just like we do for emails and newsletters. This process will move the burden from users to the advertisers, publishers and networks.

In short run this could result in a lower reach for BT providers. But if the benefits to consumers are properly stated then most of the consumers will be willing to participate. If you (network or advertiser) tell a consumer that he/she does not need to go looking for deals or offers of products/services that he/she is in the market for, these deals/offers will be provided to him/her based on her online behavior no matter where in the network she is in, I think consumer will love it. If a consumer knows the process and she knows that she is willingly participating in the BT, the click-through rate on the ads will be higher too. Why force users into Behavioral Targeting and raise privacy concerns when you can offer them what they want (when they want) and make them your raving fans.

This article gives an example from DrivePM where a user who visits a hotel chain site but does not complete the booking can be reached at later point in time but this time the user gets a 10% off coupon as an incentive to complete the booking. Knowing the benefit won’t users allow networks to track them? I am sure those who see the value in this 10% will surely do. As I said above give users what they want and they will give you what you want. If users know that they can have offers tailored to their needs by just letting a network track them, chances are very good that users will let them do it. Users sign up for grocery card rewards program just to get few cents off then how is it different online? Let users decide what and how they want you to track.

One another note: I am puzzled by the quote from Curt Viebranz of Tacoda “…….. we’re literally collecting 10 Billion behaviors a day”. In my article titled Calculating Behaviors on your Site I questioned a similar quote from Revenue Science. Can somebody from Tacoda or Revenue Science please clarify how you calculate behaviors or quit using such meaningless stats.