Monday, October 16, 2006

Size of Your Segment and Network Reach Matters in Behavioral Ad Targeting

Size of Your Segment and Network Reach Matters in Behavioral Ad Targeting

Recently I came across a company who invested a lot of effort (time and money) in behavioral ad targeting. At the end, they were not happy with the results and were wondering if it was worth continuing with this effort. Further discussion revealed that they did not get enough clicks on their behaviorally targeted ads and hence their discontent. Since they were paying for clicks only, money was not an issue, but the clicks on behaviorally targeted ads were not enough to justify the efforts they were putting.

So what happened, isn’t behavioral ad targeting suppose to provide you more click-throughs?

The problem was that their behavioral targeting vendor showed them great case study but did not set the realistic expectation about what this customer should expect. I am sure; there are a lot of companies in the same boat. So, in this article, I will explain how to set realistic expectations about what to expect in terms of clicks on your behaviorally targeted ads.

Let's take an example of a Cruise site which sells cruises packages for travel around the world.

This site participates in Behavioral Ad network to target visitors who had shown interest in cruise package to Alaska when they visited their site but wandered-off without making a purchase. These visitors will be targeted when they arrive at other publisher sites participating in the behavioral ad network.

Here are some stats on this site and target audience (visitors)

Traffic: Let’s assume they get 1,000,000 visitors a month (This is for illustration purposes and you can use your own multiplier to see the effect on your site).

Target: Visitors who viewed details and prices about cruises to Alaska. Let’s assume this customer base is about 250,000, 25% of the total site visitors. (Most of the segments I have seen actually are way less than 25% of the total visitors)

Behavioral Ad Network Reach: For this example, the network, the site is participating in, only reaches 30% of the internet population. Let's assume the site’s visitors are a good sample of the total internet population.

By participating in this network the customer will able to reach 75,000 visitors (30% of 250,000), assuming you were able to get impressions on all the sites participating in the network.
Note: This is a big assumption because even if you network reaches 90% of the internet population you will not reach 90% of your target audience. You will be competing with other advertisers (both participating in this network as well as the advertisers directly advertising on the publisher’s site) for the available inventory. Most of the network do not get premium inventory, what they get is Run-of –Site or Run-of-Network inventory which further reduces the reach.

Click-Through Rate: Assuming the click through rate without targeting is .5%. With behavioral ad targeting it is expected to increase to 1.0% (100% increase, this has yet to be proven the % increase is all over the board and one study even said that click through rate declined)

So let's say you show 75,000 impressions to these 75,000 visitors (1 impression each). So the clicks you get will be 750 visitors (1% of 75,000)

So For every 1,000,000 visitors on your site you can only expect 750 visitors from Behavioral Ad Targeting (.075% of your total site visitors, not a huge number).

No let's assume your network reached 80% of internet population. In this case you will be able to reach 200,000 (80% of 250,000) visitors and with 1% click through rate you can expect 2,000 clicks (167% increase). 0.2% of your total site visits, still not a huge number but still better than a network with 30% reach.

By choosing the right network marketer would be able get more clicks for the same efforts.

Your Behavioral Ad Networks (vendor) should have a way to forecast the clicks you can expect. Talk to your account representative; get all the facts, talk to their customer (not just read case studies) so that you have realistic expectation about the clicks. If they can’t provide you this information then time to move on to a new vendor.