Initial Hypothesis

Transitioning from an online chat to offline phone call

When chatting, twittering, messaging on facebook or texting, and the conversation gets to the point where you are ready to get on the phone, haven’t you noticed that regardless of who makes the suggestion to move to a call, the FIRST person to type in their phone number (even if you know their number by heart), won’t have to initiate the call? The person who types in their number the fastest never initiates the call.

Think about it - try it on the next chat - you’ll see that I am right.

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ISP Based BT under scrutiny in the UK

There was an interesting article this morning on ClickZ detailing the privacy scrutiny that is being placed on a UK-based ISP-based Behavioral Targeting company.

Some of the interesting tidbits from the article follow - don’t you think they would have been better prepared to deal with the consumer privacy backlash?

If this is the prevailing wind in the EU, would any of the national US-based ISPs every allow a company like Phorm, NebuAd, AdZilla and others to deploy their boxes on the network?

A dedicated protest site has gone live at badphorm.co.uk, and an Web page has been set up to petition the Prime Minister.

“We petition the Prime Minister to investigate the Phorm technology, and if found to breach UK or European privacy laws then ban all ISP’s from adopting it’s [sic] use,” reads the petition, which has been signed by over 1,000 people.

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Behavioral Targeting - what we need to do next?

Curent methods:? Offline, online, cookie-based, ISP-based.? Current issues:? social networking privacy concerns, opt-in, opt-out, standards, relevant guidelines.

What is the impact of consolidation in the industry if traffic is the ultimate commodity.? Over the past couple of years, the acquisitions in the market have been around data and traffic.

If better connecting the advertiser and user is the ultimate goal, what is the ideal method to increase the relevance for? the user?? Many of the prominent BT providers use Age, Gender, Location (which is often inferred or user submitted) as the primary keys upon which they derive their segmentation methodology.? I don’t know where to start poking holes that method - it’s just too easy.

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Is Behavioral Targeting (BT) an invasion of privacy?

I recently asked a question regarding BT on LinkedIn, and received some very interesting responses. Obviously this is a very unscientific survey that is clearly skewed and not normally distributed, but the responses are interesting nonetheless:

I have included a few below:

• “No, I do not think it is an invasion of privacy. It’s no different than your favorite Visa or Mastercard sending you targeted inserts or coupons in your statements based on your spending habits on that card. I don’t complain when Discover sends me 10% of at Home Depot. Do I want someone tracking my online purchase, viewing habits, etc, probably not, but I also don’t want the local Chinesse delivery joint storing my cc# in theit computer. It happens, it’s called technology and it allows companies to more effectively and effeciently target their audience. Basically, I don’t want to see any regulations that limit the ability of the free market system to grow and flurish. I don’t want to see further handcuffs on small or large business trying to operate in the US.

  As a user, I’d much rather see an ad targeted to me based on exhibited behavior than a RON/ROS ad that I have no interest in.”

• “Regarding privacy, BT is not an “invasion” it is an “invitation.” Everyone accepts and understands the quid pro quo of the free internet content world is having ads – lots of them – served up on top, behind and along with the editorial. So my view of the next wave of BT is a manner, method, and process for the user to create a managed ad profile with selective inclusions and permissions. This profile starts very simply with standard gender, age, income, zip code information. It is enhanced with certain data points or beacons linked to multiple ad networks and sites. Importantly these data need to be complied into major classes of customers as already defined by services like Nielsen and comScore so the data becomes actionable and useful information.

• BT is not an invasion of privacy.It infact is a great means for both the advertiser and the targeted user-to keep out stuff / audience which is irrelevant to both. But the big question is that BT in its present state with publishers leaves much to be desired and is not effective due to various loop holes.For BT to be a success,a lot needs to be done by websites offering it as an advertising option,at a premium rate.

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Product Development and Planning

I couldn’t help but laugh when I saw this over the weekend - Scott Adams hit the nail on the head with this one. If you have ever experienced this within an established company, you understand.

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OMMA Behavioral: “The Hot Zone: The State of the BT Market”

David Hallerman, Senior Analyst, eMarketer

• Spending and where it is going
  • US Internet Advertising Spending - $50B in 2012
  • US BT Ad Spending, $3.5B in 2012
    • As share of spend, 9.6% of total US Internet Advertising Spending in 2012
  • BT will get a 27% budget increase in 2008
• Why dollars don’t deceive - stats for 2008
  • Google net revenue (US Only) 8.4B
  • Retail ecommerce - $161B
  • Internet Advertising - $26.7B
  • BT advertising $925mm
• Forces for change
  • US Marketers say BT among one of the most important tactics (online and offline)
  • BT - top performing tactic for great ROI -outperforming contextual, affiliate, rich media
  • 79% of most ad execs agree “Long tail always existed, technology makes it easier”
  • Advertisers and Agencies prefer specific publishers over networks for targeting

• Less change than you might think
  • In general, 80% of respondents think that data accuracy makes web analytics and ad tracking problematical
    • 40% had concerns with the validity of cookie-based measurement
  • Top three marketing trends in 2007:
    • Marketing Basics
    • SEO
    • Personalization
  • 74% of respondents only put between 1% and 20% to new media properties and experimentation
  • The largest US advertisers still (mainly) put small share of spending online
    • 3.1% share among top 100
    • Top 10 all less than 6%
      1. P&G - 1.1%
      2. AT&T - 5.1%
      3. GM - 3.6%
      4. Time Warner - 2.9%
      5. Verizon - 4.4%
      6. Ford 3.8%
      7. GlaxoSmithKline - 0.6%
      8. Disney - 5.7%
      9. Johnson and Johnson - 1.5%
      10. Unilever - 1.3%

• What people really want
  • People don’t want to be targeted
    • Call people, “people”, not consumers, Internet users, target audience
  • Relevancy - but they’re not crazy about being targeted
  • Privacy - and yet they want personalization
  • Transparency - think of it as marketer ultra-honesty
  • Control - not just in word - and difficult indeed

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OMMA Behavioral: “Are You In or Are You Out?: Targeting the Social Network”

Moderator: Rob Graham, VP of Creative and Technical Training, The Laredo Group

Panelist: Molly Hop, Group Media Director, Critical Mass;
Jeff Freedman, Director of Business Development, MillionsofUs
Davis Brewer, Lead Digital Strategist, Spark Communications
Arnie Gullov-Singh, VP, Product Management, MySpace/Fox Interactive Media
Basem Nayfeh, Chief Technology Officer, Revenue Science

Overall, the panel agreed that this is a tremendously exciting time in advertising. As users are adopting social media, we increasingly have the ability to make advertising both effective and more efficient. through increased relevance. Social networks gives us a massive platform for self-expression. When consumers raise their hands and indicate their interest, it creates very powerful opportunities for targeting.

There seems to be a clear opportunity to utilize outside data on top of existing user submitted information. It was mentioned in the previous session with regard to the work that [x+1] is doing, and continues to be raised in most conversations on the stage and in the room. Rather than just targeting on what someone has just told you, it has been discussed that actual behavioral data acquired from other places on the web should be utilized on top of existing user-submitted information. The reverse of that can also be true - now can we take that profile data and actual conversions and analyze the efficacy of targeting methods - these feedback loops (if in place) will drive advertisers, publishers and service providers closer together.

There was a consensus that increased relevance of advertising would reduce some of the current privacy concerns. People are sharing a significant amount of data about themselves, especially for those that are using social media.

Let’s assume that BT, appropriately integrated with offline behavior and online user submitted profile data, will drive up CPMs, increase CTR, and reduce advertisers CPA.

Tags: behavioral targeting, privacy, social networks

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Hyper-targeting without the Hype

Peter Horan, CEO, IAC Media and Advertising

For as much interest and success as we have had in BT - what we are seeing and doing now is the very very early stages.

“What is the business of Media and Advertiisng really all about?”

Media is the business of offering marketers access to audiences of influential and affluent buyers.

The Pendulum Swings - we are heading into an age of intent-driven media.

• First, media planning by approximation
  • Targeting based on the audience demos of a medium
  • Placement on context not the behavior of a specific consumer
  • Balancing comp, coverag, creativity and impact
• Then came behavioral targeting - and everyone went crazy with hyper-targeting

What’s so wrong with Hyper-Targeting?

• A trip to Detroit that made everyone unhappy
• Efficiency at the expense of effectiveness
  • Transforming an audience of millions into a tiny club that you could call on the phone
• The job of advertising to convert not to just preach to the converted

BT is not enough by itself

The goal is a targeting strategy that balances efficiency and scalability - driving enough leads to make a difference profitably

Long term effectiveness, though is still dependent on building brands

• Brands (like people) are still known by the company they keep
  • There is rub-off from the environment where your ads run

A strong brand makes everything work well. With the goal of ROI and selling product, never discount brand. Context still matters - the environment still matter.

What is IAC working on now?

• Environmental Targeting
  • Advertising on commerce sites
    • Closer to the transaction
      • And, yes, this is a behaviorally targeted ad
  • Vertical ad networks

• Audience Targeting
  • Zip+4
    • Inheriting fuller profiles
  • Persistent profiles

There will be news ways to engage with audiences - [x+1] is using PRIZM clusters at the edge of your network - who are these folks coming in, how do I market to them - it gives you a much richer profile. Back to the notion of scalability - everyone that comes to your site will have a profile attached. Content, monetization, targeting will all be based on Zip+4.

They can will also have certain non-PII based information that will be cookied and carry across the network. direct marketing conventional wisdom is that if I know what you buy, that is the best information - actual purchase behavior.

And ten years from now, we will migrate to 1 to 1 targeting - “an audience of one”. One man, one woman, one family. We are heading toward a world where relevance is important. Where you are speak to relevant consumers in context. It is a much better experience and much more powerful from a marketing perspective.

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OMMA Behavioral - Keynote

Keynote: Steve Smith, MediaPost Columnist and Emcee

1. Increased audience fragmentation is one of the key reasons why behavioral targeting is going to be a key technology and advertising enabler in the immediate future
2. Multiple channels and relevance is of nearly equal importance

“The Heat is On” - we are at an interesting point in the history or targeting, and we have to come up for breath and realize the promise of the industry.

Video, Content Optimization, measurement, mobile, gaming are increasingly benefiting from better targeting, better media utilization, increased CTR and reduced CPA.

Behavioral targeting is one of the keys that will enable advertising to an increasingly fragmented audience. A fragmented world needs a better use of tracking, polite targeting, optimization. Over the next couple of years, BT will be integral to the ways that we converge media. Better profiling, recommendation engines are but a few of the immediate uses. We haven’t made the case very well for how this improves the customer’s experience.

For us to not be perceived as ruthless behavioral scientists, we need to better communicate to users the benefit. If we are able to articulate the benefit, many of the barriers and concerns around BT will likely go away.

Tags: behavioral targeting, OMMA

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FTC Proposes Online Behavioral Advertising Privacy Principles

I received an email from our attorneys this past week soliciting comments on the new FTC policy proposing increased visibility for consumers regarding behavioral advertising.

The FTC is proposing a whole host of things regarding consumer control, length of data retention, adherence to privacy policies, and use of sensitive data usage. Their key tenets are encapsulated in the bullets below - is this going to regulated by the FTC, or can we control ourselves?

• Every Web site where data is collected for behavioral advertising should provide a clear, consumer-friendly, and prominent statement that data is being collected to provide ads targeted to the consumer and give consumers the ability to choose whether or not to have their information collected for such purpose.

• Any company that collects or stores consumer data for behavioral advertising should provide reasonable security for that data and should retain data only as long as is necessary to fulfill a legitimate business or law enforcement need.

• Companies should obtain affirmative express consent from affected consumers before using data in a manner materially different from promises the company made when it collected the data.

• Companies should only collect sensitive data for behavioral advertising if they obtain affirmative express consent from the consumer to receive such advertising.

The biggest question I have is whether or not there are more effective methods of targeting that will surface as a result of this increased oversight.

Tags: advertising, behavioral targeting

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