AUDIO: A behind-the-scenes look at the ad targetting business

All of your web behavior is being tracked by commercial entities, whether you know it or not, if your web-browser software is set (and they are set be default to do this) to enable “cookies” — the storage of tiny files of data placed by the websites you visit.

DeChant finds it all fascinating, and not creepy, because it’s all designed in his view to make our web experience more personalized and efficient. He believes companies like his should be completely open about what they are doing, and why, and he even favors some kind of federal regulation to ensure such openess.

Conference slateboard

The one thing DeChant does not favor is any law that would require consumers to affirmatively “opt-in” before the cookie-based tracking can begin. He says this would devastate the ad-personalization industry.

DeChant spoke June 20, 2011, in Boulder, Colo., at the Colorado Chautauqua Association as part of a two-day symposium on web and printing personalization organized by Peter Vandevanter, the person who brought DeChant into the ad world when they both worked at the Charlotte [Va.] Observer daily. Vandevanter, a former MediaNews Group Inc. web-strategy executive, now works for a Denver-based division of worldwide printer CGX Publishing Solutions, which operates commercial-scale ink-jet printers for personalized books and other materials.

Here’s more of what DeChant said, from the notes he handed out:

“If it were up to advertisers, 100% of the display ads delivered to consumers would be 1-to-1, personalized marketing messages. That is, the content of these banner ads would change – dynamically – based specifically on what we know about the person viewing that display ad. Over the last five years there has been an explosion in the area of personalized display ads.

  • 100% of the top 500 internet retailers have tested some form of personalized display (I know, because I’ve called on all 500 companies over the last 2 years).
  • Dozens of startups have flourished in the areas of retargeting and behavioral targeting.
  • Major media and technology players have invested heavily in these areas: Google, Yahoo, Facebook, AOL, eBay, and Experian, just to name a few.

“Why the boom? Well, quite simply, personalized ads are about 5 times more effective than “static ads”. By static, I’m referring to any ad that doesn’t include dynamic content. The logic behind this is simple: relevance trumps promotion. Any individual is more likely to respond to an ad when that ad is based on their behavior, based on their shopping preferences, or based on their proclivity to buy the items they are seeing in the ad.

“Personalized ads drive consumers to click on the ads more often, return to the site more often, buy more often, and to spend more on those sites. And on top of that, they are more loyal to these brands. So in VP of Marketing jargon, personalized ads drive a higher Click-Though Rate, more Return Conversions, a higher Average Order Value, and a higher Lifetime Value. That’s a pretty powerful story, from a financial perspective.

Retargetting and behavioral targetting

“Now, let’s talk about the two main categories of personalized display ads. I alluded to them before: Retargeting and Behavioral Targeting. Retargeting is the simpler of the two mediums: dynamic display advertising that is based on a consumer’s behavior on a specific web site.

“So, here’s an example: you visit MLBShop, which is the ecommerce site for Major League Baseball. During your visit, you spend almost all of your time browsing among Cleveland Indians products. You search for “World Series Champion” T-shirts, but since this is the Cleveland Indians section, of course there are none to be found. But you browse some other Cleveland items, decide not to buy, and leave the site.

“Now, you begin to move about the World Wide Web – you check your Yahoo email, visit Drudge report, Check you fantasy football team, play some online Scrabble …. etc.

Behavioral targeting

  • Based on a demographic profile.
  • Based on your search behavior.
  • Based on anonymous profiles (Experian)”

About wpdensmore
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