Ad targeting improves as Web sites track consumer habits

NEW YORK (AP) -- Based on the weather reports and restaurant listings you check out online, Yahoo Inc. has a good idea where you live. Based on searches you've done, the Web portal might also know where you want to go.
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Facebook CEO and founder Mark Zuckerberg speaks to advertisers in New York November 6.

Don't be surprised then to suddenly see an advertisement on flight deals between those two places. It's what United Airlines did with an ad on Yahoo earlier this year as people browsed for something completely unrelated to travel.

Elsewhere, online hangout Facebook is mining friends' buying habits, and major Internet portals have bought companies to expand their reach and capabilities for "behavioral targeting" -- all so advertisers can try to hit you with what they believe you're most likely to buy, even as doing so means amassing more data on you.

"When you are online today, you've been labeled and tagged as this type of consumer in milliseconds," said Jeff Chester, executive director of the Center for Digital Democracy. "All of a sudden you are exposed to a vast number of invisible salespeople who are peering over your personal details to figure out the best way to sell to you."

Behavioral targeting, commonly accomplished by depositing tiny data files on personal computers to keep track of surfing patterns, has raised privacy questions and, at least in the case of Facebook, user complaints.

From the perspective of Web sites and advertisers, though, behavioral targeting can bring to the rest of the Internet some of the relevancy Google Inc. and others successfully mined for billions of dollars with text-based search ads.

"Everyone's trying to find the next, best mousetrap to compete with search," said Adam Broitman, director of emerging and creative strategies with ad agency Morpheus Media LLC.

Although behavioral targeting isn't right for all advertisers, it has become increasingly important as companies try to break through the clutter. The research company eMarketer projects that spending on behavioral targeting will nearly double to $1 billion next year and hit $3.8 billion by 2011.

Targeting has been around as long as there has been advertising. Automakers promote themselves in car magazines. Political campaigns send mail to likely voters. As advertising moved to the Internet, ads for diapers clung to parenting sites.

With search came contextual targeting -- the ability to target messages even more precisely based on search terms or keywords appearing in articles. Behavioral targeting brings capabilities to sites without good or reliable keywords -- for example, a social-networking profile that touches on dozens of hobbies and interests at once.

Read enough golf articles online and a data file will be put on your computer labeling you a golf fan. When you're on a Web site on cooking, don't be surprised if ads for golf clubs follow you there.

The concept has been around for years, but enough Web sites are now participating that advertisers can still reach a sizable group even if they target narrowly.

They can also target more smartly using surfing patterns across a broader set of sites, or in Yahoo's case letting United Airlines customize ads by inserting city pairs and prices specific to the individual user.

Consumers are having trouble understanding all that Web sites are up to, said Ari Schwartz, deputy director of the Center for Democracy and Technology.

The Federal Trade Commission recently held hearings at which consumer-protection and privacy groups including Schwartz' called for the creation of a "do not track" list.

The Web portals, particularly Time Warner Inc.'s AOL, are stepping up their educational efforts in response to privacy concerns, trying to sell Internet users on the idea that if they are to see advertising to support free services, a targeted, relevant ad is far less annoying.

They also stress that they aren't capturing sensitive information like names and e-mail addresses, and in many cases consumers can take steps to decline targeted ads.

Indeed, companies aren't going as far as they could.

"At the end of the day, if behavioral targeting is being used and consumers get annoyed, they are going to take it out on the advertiser or the publisher that placed the ad," said Michael Cassidy, chief executive of Undertone Networks, which contracts with a network of third-party sites to run ads.

Most Web sites and marketers have been shunning the ultimate targeting -- ads that greet you by name.

Yahoo could easily do that using registration information, but "I'm not sure people would like that or not," said Richard Frankel, Yahoo's senior director of product marketing.

Many have declined to sell ads based on diseases you've read about.

"We could track them and target ads for sensitive health conditions and get lots of money from pharmaceutical companies for that, but there are certain things we've chosen not to do," Dave Morgan, a senior AOL advertising executive who founded Tacoda, a behavioral-targeting company AOL bought in September.

"Sensitive" includes all targeting to HIV and cancer. Beyond that, health ads are reviewed on a case-by-case basis, Morgan said.

The Network Advertising Initiative, an industry trade group that counts Yahoo along with AOL and Microsoft subsidiaries as members, began a study about seven months ago to clarify the boundaries.

Carl Fremont, whose advertising agency Digitas handles many pharmaceutical campaigns, said several ideas have been shot down by lawyers at drug companies. He would not name any, and three major drug companies did not respond to requests for comment.

Fremont, the agency's executive vice president, said he sees opportunities in reminding known patients to take their medication or perhaps try a competing drug.

Despite the promises, targeting isn't always appropriate for Web sites and advertisers.

Although sites can charge more per targeted ad, fewer readers see any given one, resulting in less revenue in some cases, said Brian Quinn, vice president of ad sales for The Wall Street Journal's Web site and three other Dow Jones & Co. properties.

"We just end up selling the frosting and not the whole cake," he said.

And while targeting may work for cars and travel, it's more difficult to gauge a person's interest in soda or satellite TV service. In such cases advertisers often prefer mass amounts of cheap, untargeted spots, said Sarah Fay, chief executive of ad agency Carat.

Advertisers and Web sites also have to figure out how far they can push without alienating their users.

Many Facebook users, initially unaware that tracking was occurring, have complained that the site went too far in generating endorsements based on friends' online activities. On Thursday, Facebook agreed to offer better notification and controls, and the company is counting on users to feel more comfortable about the tracking over time.

Users' comfort with data profiling has indeed shifted over the years.

Google faced criticism when it introduced an e-mail service that paired ads with the words inside private messages. Millions of people now use Gmail with scarcely a blink.

Users will eventually embrace the latest tactics, too -- and by then, they'll complain about even deeper levels of intimacy yet to be invented, said Tracy Ryan, professor of advertising research at Virginia Commonwealth University.

"You want to have enough targeting that a consumer notices the message and pays attention, but you don't want it to be so obvious that they are thinking (there) is targeting," she said. "That would be scary."

WunderLoop: a new dimension in targeting

“Integrated targeting”. All options on a single platform.

INTEGRATED TARGETING DEMO GRAPHIC HERE

* Unites all proven and new real-time targeting methods in one system.
* Integrates the most prominent web analysis and
market research applications.
* Is open for integration of customer-specific data from
CRM and Web/data mining.
* Flexible usage options: on-site, cross-site, as a local installation
or ASP, as a standard version or completely personalised.

wunderloop web site
wunderloop's new web design

With the development of the new Integrated Targeting Platform we have redesigned and updated our website at www.wunderloop.com. The site includes useful facts, figures and data and an improved look and feel.


Latest Innovations
Taking Targeting to a New Dimension:

Behavioural targeting is fast becoming standard practice worldwide. But with new developments come new challenges. Our clients now need to combine a range of different targeting techniques.

With wunderloop’s new Integrated Targeting Platform, for the first time, they can.

The unique platform now incorporates all targeting methods, both new and established in one modular and intuitive framework. Key features include:



- Generic Tagging
- Auto Categorisation & Keyword Extraction
- Predictive Targeting
- Typology Targeting
- Geo Targeting
- Standardised Campaign / Brand Impact Studies
- Reaction Analysis
- Relevancy Weighting
- Two options for accessing the wunderloop Integrated Targeting Platform



Generic Tagging:
wunderloop technology enables amazingly quick and simple integration and categorisation of all websites via a single tag.

Auto Categorization & Keyword Extraction:
Manual site classification used to be a long and laborious process. Not any more. wunderloop technology can now classify every web page automatically, yet allow you to specify your own changes. Article keywords are automatically identified and can be used to target specific interest profiles. Whatever your target identification characteristics, they are automatically ready for use. As results are generated, and users interact with those results, the profiles become more and more exact.


Predictive Targeting:
By cleverly correlating market research and real-time online user data we can create ever more precisely defined target groups while at the same time maximising reach.

Typology Targeting:
wunderloop’s tools allow you to connect behavioural and socio-demographic data to target standardised or individually matched target types. Relevant data from analysis of user and client databases can also be added. The types of clients are defined by a comparison of "average" online and offline client data.

Geo Targeting:
Users can be targeted right down to district and city level, without threatening data privacy - wunderloop never saves an IP address.

Standardised Campaign / Brand Impact Studies:
wunderloop’s integrated standardised analysis enables straightforward assessment of advertising effectiveness. Net result: you can spend the time you save further optimising profiles and making your campaigns still more effective.

Reaction Analysis:
With wunderloop you can now analyse who has actually reacted to an ad and therefore which of the characteristics of your target groups are really important. Similarly, a Pre-Flight allows you to check out different configurations in advance in order to find the most effective formula.


Relevancy Weighting:
Alongside the new, tried and tested wunderloop features such as relevancy weighting are of course still available. The relevance of current user behaviour is assessed and weighted in relation to historical data and in real-time context. Relevancy weighting can be used in targeting to define the strength of interest e.g. in the purchase of an automobile

Media Buyers Give Thumbs Up To New AOL Ad Network

by Gavin O'Malley, Tuesday, Sep 18, 2007 7:45 AM ET

WITH ITS CONTINUED FOCUS ON advertising, AOL has established a new division for its ad networks--including Advertising.com and Tacoda--and named Curt Viebranz, former CEO of TACODA and a one-time Time Inc. executive, to lead it. The unit, called Platform A, will reach an estimated 90% of Web users. AOL also announced that it's moving its headquarters from Dulles, Va. to the media capital of the world--New York City. "Over the past eight months, we have put together a network with unprecedented reach and state-of-the-art solutions," said Randy Falco, Chairman and CEO of AOL. Platform A will encompass Ad.com, the direct-response network AOL acquired in 2004; Tacoda, the behavioral ad network it recently bought for $275 million; the video ad network named Lightningcast; Third Screen Media, a mobile ad network, and AdTech AG, an international online ad-serving company based in Frankfurt, Germany. "With the launch of Platform A, we are unleashing this powerful network to deliver unrivaled transparency and return on investment for our marketing partners," said Falco. Viebranz has been named the president of Platform A--while Mike Kelly, president of AOL Media Networks, is leaving the company. Lynda Clarizio will continue to head up Ad.com, and Kathy Kayse, senior vice president of sales at AOL Media Networks, will now run AOL brand advertising. Dave Morgan, who was rumored to be getting a new title with within AOL, will hold on to his position as chairman of TACODA. Media buyers were positive on the news, adding that AOL's recent spate of ad network acquisitions would have been pointless without their eventual integration. "It wouldn't have made sense otherwise," said Steve Ustaris, group media director at Aegis Group's Carat Fusion. "This will make it much easier to manage inventory." The reorganization comes amid criticism that AOL has so far failed to meet some media buyers' expectations, and less than two months after parent company Time Warner released slower ad growth numbers for AOL--news that sent its stock price down 3%. Still a force to be reckoned with, AOL has plenty of admirers in the agency world. "They've done a good job responding to sales leadership, and it's great to see them focusing their efforts in this area," said Ed Montes, executive vice president-managing director of Media Contacts, a digital media agency owned by Havas. "They very recently came to us with some interesting new products that combine several of their new ad networks." Selling advertisers both performance-based and branding programs, AOL plans to eventually have a single data platform that would give it the ability to target ads across its different network businesses. AOL is not alone in its focus on ad networks as a way to fend off a slowing ad market overall. Yahoo, Microsoft, and even holding company WPP Group have invested in ad networks over the past year. "With the increasing fragmentation of online audiences, the best way to serve advertisers is to enable them to harness massive advertising networks that reach across the entire Internet, not just our AOL Web sites," said Falco. AOL, however, might do well to concentrate less on new ad networks, and more on its own ad inventory, commented David Moore, chairman and CEO of 24/7 Real Media, the online ad firm acquired by WPP Group in July for $649 million. "It's interesting to watch all these portals buying up ad networks when they're not sold out on the inventory they've got on their own sites," Moore said. Separately, AOL on Monday said it has signed an agreement with HP to offer co-branded, localized versions of its portal, toolbar and search on HP desktop and notebook PCs sold worldwide. Under the agreement, the co-branded portal will be set as the default home page, and the co-branded toolbar and search will be default settings in various countries worldwide. The agreement extends and expands the existing relationship between HP and AOL, which provides consumers with a co-branded AOL/HP portal as the default home page for HP consumer PCs sold in the U.S. Gavin O'Malley can be reached at gavin@mediapost.com

MySpace to Discuss Effort to Customize Ads

By BRAD STONE
LOS ANGELES — Members of the booming social network Web sites treat their individual profile pages as a creative canvas for personal expression.
The social networking companies see those pages as a lush target for advertisers — if only they could customize the ads. Although Internet companies have talked about specifically aiming their ads since the inception of the Web, so far advertising on social networks has been characterized by mass-marketed pitches for mortgages and online dating sites.
But MySpace, the Web’s largest social network and one of the most trafficked sites on the Internet, says that after experimenting with technology over the last six months it can tailor ads to the personal information that its 110 million active users leave on their profile pages.
Executives at Fox Interactive Media, the News Corporation unit that owns MySpace, will begin speaking about the results of that program this week. They say the tailoring technology has improved the likelihood that members will click on an ad by 80 percent on average.
“We are blessed with a phenomenal amount of information about the likes, dislikes and life’s passions of our users,” said Peter Levinsohn, president of Fox Interactive Media, who will talk about the program at an address to investors and analysts at a Merrill Lynch conference in Los Angeles on Tuesday. “We have an opportunity to provide advertisers with a completely new paradigm.”
MySpace’s rival, Facebook, also says it is experimenting with ad customization with the help of Microsoft, which signed with the up-and-coming social network last year to provide display ads on the service. To the consternation of privacy advocates, who say Internet users are unaware of such activity, the social networks regard these detail-stocked profile pages as a kind of “digital gold,” as one Fox executive put it last year.
The companies hope that customizing ads to their members’ stated enthusiasms will improve the effectiveness of the ads and recruit new advertisers who want to pitch their messages to refined slices of the online audience. Fox executives also hope the technology can help MySpace recapture some of the momentum and attention that has recently gone to Facebook.
Richard Greenfield, the managing director of Pali Research, predicts that MySpace’s fledgling program will help increase MySpace’s current revenue to $70 million a month from $40 million a month by next year.
“This is a critical evolution of the MySpace business model envisioned from the day News Corporation bought it,” Mr. Greenfield said.
A 100-employee team inside the Fox Interactive Media offices in Beverly Hills, called the “monetization technology group,” has designed computer algorithms to scour MySpace pages. In the first phase of the program, which the company calls “interest-based targeting,” the algorithms assigned members to one of 10 categories that represents their primary interest, like sports, fashion, finance, video games, autos and health.
The algorithms make their judgments partly on certain keywords in the profile. A member might be obvious by describing himself as a financial information enthusiast, for example. But more than likely the clues are more subtle. He might qualify for that category by listing Donald Trump as a hero, Fortune magazine as a favorite publication or “Wall Street” as a favorite movie.
The system also looks at the groups members belong to, who their friends are, their age and gender, and what ads they have responded to in the past. “Our targeting is a balance of what users say, what they do and what they say they do,” said Adam Bain, executive vice president for production and technology at Fox Interactive.
MySpace evidently does not completely trust the technology. Every two weeks, 200 temporary workers, which the company calls “relevance testers,” come to Fox Interactive’s offices to manually check member profiles against the categories they have been assigned to.
The company said that several national advertisers are trying out the service, though they declined to name them. Fox Interactive executives say that some kinds of ads benefited more than others. Clicks on tailored auto ads more than doubled and clicks on music ads jumped by 70 percent.
For the last two months, Fox Interactive has also experimented with the second phase of its targeting program, called “hyper targeting,” in which it further divides the 10 enthusiast categories into hundreds of subcategories. For example, sports fans are divided into subgroups like basketball, college football and skiing, while film enthusiasts are further classified by their interest in genres like comedies, dramas and independent films, and even particular actors and actresses.
For now, Fox’s advertising sales representatives are selling the new kinds of ad abilities. In November, according to Michael Barrett, Fox Interactive Media’s chief revenue officer, the company will set up an automated online system to allow smaller companies to aim at MySpace users with their ads without ever talking to a human being at Fox.
A punk band performing in Seattle, for example, could publicize a performance by looking up all the people on MySpace who live in that area who are punk fans.
MySpace also plans to give its advertisers information about what kind of people its ads have attracted. “We want them to leave knowing more about their audience then when they came into the door,” Arnie Gullov-Singh, vice president in the advertising technology group at Fox Interactive.
That is precisely the goal that worries some privacy advocates. They argue that users of social networks like MySpace and Facebook are not aware they are being monitored and that current ad-targeting is only the first step in what has become a huge arms race to collect revealing data on Internet users.
“People should be able to congregate online with their friends without thinking that big brother, whether it is Rupert Murdoch or Mark Zuckerberg, are stealthily peering in,” said Jeff Chester, executive director at the Center for Digital Democracy in Washington.
His organization will ask the Federal Trade Commission, during a planned hearing on Internet privacy in November, to investigate social networks for unfair and deceptive practices, he said.
MySpace and Facebook executives argue that they are harming no one. They say that they are using information their members make publicly available, and contrast their ad targeting with efforts by Yahoo, America Online and Microsoft, whose advertising technologies follow people around the Web and try to deduce what they are interested in based on what sites they are looking at.
Fox executives also say they are planning on letting users opt-out of the ad-targeting program on MySpace, though it means those members will see fewer relevant ads.
At least one MySpace member has no problems with the new technology. Mark Gong, a 26-year-old photojournalist from Washington, runs the 3,000-member Wanderlust group on MySpace and on his profile expresses an interest for foreign films like “Lost in Translation” and “The Spanish Apartment.” Not surprisingly, that has defined him as a prime target for travel ads on MySpace from companies like ShermansTravel.com, a travel deal site. “I’m not opposed to advertising,” Mr. Gong said. “They have got to make money.”
But he also says he hopes MySpace spends the extra cash on making the site more reliable and fending off the Facebook threat. He says many members of his group have flocked to Facebook in the last two months and that even he is logging into Facebook more often.
“Everybody I know is switching to Facebook,” he said. “MySpace has its work cut out for it.”

New Facebook Ad Platform Targets Users by Keyword

Facebook: now more ad-friendly Faced with ad options that didn't meet advertiser expectations, Facebook has introduced new payment and targeting options for its Flyer ads, reports ClickZ. Facebook will now offer Flyer ads, its most ubiquitous format, on a cost-per-click auction model. It will also allow advertisers the ability to target their ads based on keywords in a user's profile. The new offerings have been dubbed Flyers Pro, with older offerings now labeled as Flyers Basic. Reports of Facebook mulling keyword-based ad-buys first surfaced late last month. Facebook hopes the new ad format spurs use of the ads for goals other than just visiting a sponsored group or other more traditional use. By giving offering CPC as an option, Facebook hopes to appease those who need solid metrics, as well as others focusing more on building a community of followers on the social network.

Custom Targeting With Tribal Fusion Service

Written on
August 29th 2007


Tribal Fusion, an ad network under Exponential Interactive has announced the launch of Dynamic Ads. Dynamic Ads gives advertisers the ability to create customized messages using one creative to target users based on behavior, location, demographic and other profiling components.

The company has reported an increase of up to 80% in conversion rates for some campaigns due to this refined model. The goal of Dynamic Ads is to streamline the customization process in a sort of one-stop-shop structure for marketers looking to create the most relevant ads for their consumers. Using Dynamic Ads, marketers are able to customize landing page links depending on the offer.

Exponential’s vice president of strategic marketing, Alistair Goodman remarked on the unique quality of the program Tribal Fusion is providing, “I’m not aware of others that are providing such robust targeting capabilities with this level of message customization. Dynamic Ads enables advertisers to instantly create communication with much greater relevancy and efficiency.”

Dynamic Ads has only been offered to a few partners, but with the positive results Tribal Fusion is planning on extending the service to more of its clients.
Tags: ad serving, dynamic ads, exponential interactive and Tribal Fusion

Textwise.com Semantic ad targeting

http://www.textwise.com/semanticSignatures.html is a very interesting page with interesting info. Espcially when you scroll over the images on the left hand side that show data regarding the difference between "contextual targeting" and their "semantic signature matching". Interesting use of the word DNA in reference to content and ads. Similar to our use of

"Dynamic triangulation = particles (behavior,context,tags,keywords,attention data etc) = digital DNA = content/user/ad = relevance targeting "

for the new version of advario to be released going into adtech NYC. Below is some further info from their site.

Semantic SignaturesSM are TextWise's patented contextual targeting technology. They innovate beyond simple keyword-based or category-based models currently used in so-called "contextual advertising" and deliver a new level of context-driven advertisment matching. MEET YOUR PERFECT MATCH, EVERY TIME, AUTOMATICALLY Semantic SignaturesSM is the only contextual advertising solution with: Precision that outperforms our competitors to obtain significantly higher ad-to-web page relevancy Speed/Scalability powering real-time placement Automation to support a dynamic environment Universal Appeal going beyond the English language to capture the global market Semantic SignaturesSM capture meaning through concepts, not keywords — including multiple meanings and topics within a single document. As a fully automated and real-time contextual targeting system for both advertisments and web pages, they provide a robust, scalable, and easily maintainable solution for advertisers. Request a White Paper

MORE:::Yahoo Debuts Behavior-Based Advertising with SmartAds

What you see is your invention Yahoo has officially unveiled its behavior-targeting SmartAds, reports Search Engine Land. SmartAds combine a variety of factors to deliver a super-relevant ad to the user. Behavioral tracking analyzes the user's location and other information on one side the interface. On the other is the dynamic assembly of material provided by the advertiser. They may upload various backgrounds, text and other individual components. Those components are then assembled on the fly to create endless variations on the same ad that can be targeted to individuals rather than groups. Yahoo is hoping this customization and targeting combination will lift its status as a mere display ad server. The ads were tested on Yahoo Travel and reportedly performed two to three times better than other display ads. Behavioral advertising has become a topic of heated discussion, even as firms like Google, Microsoft and AOL. While some look at it as a gross breach of privacy, others - particularly advertisers - perceive it as a way on improving their services to provide customers with more tailored options. This can be considered a means to improve the online user experience. Behavioral targeting is also expected to be one of the defining characteristics of web 3.0, or the Semantic Web.

Will 'SmartAds' Give Yahoo An Edge In Online Display Advertising?

Existing Assets For B2B SEO »

Aug. 15, 2007 at 9:18am Eastern by Greg Sterling

The Wall Street Journal explores Yahoo's recently debuted "SmartAds" (prior coverage here), which mix behavioral targeting with other forms of targeting and dynamic elements to deliver a reportedly better response to display advertisers. The new ad platform was tested in Yahoo Travel and reportedly performed well (2x to 3x CTRs of normal display ads) and will be rolled out to other areas of the Yahoo site over time.

From the WSJ article:

Using SmartAds, advertisers provide Yahoo with sets of backgrounds, images and text that can be mixed and matched on the fly to create an all but unlimited number of different ads. The approach combines technologies Yahoo developed itself with others it acquired. Bringing together this creative zip with the ability to target users based on interest and location, brings to display advertising the flexibility and direct-response qualities that have fueled the boom in search advertising. Yahoo hopes SmartAds will help it gain ground in the rapidly expanding market for behaviorally targeted ads, which is expected to jump to $1 billion in the U.S. in 2008 from $575 million this year, according to eMarketer.

Yahoo recently consolidated search and display advertising under David Karnstedt, who runs North American ad sales at Yahoo. The company also recently released research showing a lift when search and display ads are used together as part of an online ad campaign.

The "creative assembly platform" described in the article excerpt above is perhaps the most interesting aspect of SmartAds. But behavioral targeting, which is the current rage in online advertising (AOL recently bought Tacoda), is gaining new scrutiny even as its stock is rising. In November, the U.S. US Federal Trade Commission is holding a forum in Washington, DC to address consumer and privacy groups' concerns "raised by the practice of tracking consumers’ activities online to target advertising."

Targeted Ads Coming to MySpace

Targeted Ads Coming to MySpace

Fox Interactive has begun testing targeted ad delivery on MySpace, reports Business2.0.
Testing ad targeting technology has been underway for about two weeks. Based on tweaks made to the algorithm, the system could roll out sometime in the next couple of weeks.
Ads are delivered based on defined user preferences, along with behavior data that adjusts what someone says they like and what they seem to respond to most.
This form of ad targeting could raise the CPM rate currently charged by MySpace, which is low compared to other sites. This is because user behavior has been hard to pin down in a way that is of value to advertisers.
In an interview at ad:tech Miami last June, MySpace CMO Shawn Gold revealed that the company is looking into conducting and releasing formal psychographics of the user base in the near future.

The AdECN Exchange

AdECN is the only real-time, auction-based, neutral exchange for online display advertising.

It works much like a stock exchange. A member of the AdECN exchange buys on the exchange for its advertisers and sells on the exchange for its publishers.

The member's advertisers specify in advance how much they are willing to pay based on the visitor's profile, or the visitor's past behavior, or the page content, or other factors. Advertisers can bid on a CPM, CPC, CPA, or CPL basis.

When a visitor lands on a website page, an auction is held among all the advertisers — in less than 12 milliseconds, for every single ad impression. The highest bid wins, and that ad is shown.

AdECN provides:

• the interface for the member's advertisers and publishers, branded with the member's name and artwork;
• the real-time, per-impression auction;
• the targeting, metering, frequency capping, reporting, ad serving, and all related technology;
• the accounting and money transfer between members;
• all of the servers and bandwidth necessary to run the Exchange.

Members can place all, some, or even none of their traffic on the exchange. They can specify that the auction favor a match between their own publishers and advertisers, unless the profit of using traffic from the Exchange exceeds a certain threshold.

This guarantees members the best possible liquidity — fewer campaigns go unfilled, less inventory goes unsold, and members make the highest profit, always.

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Rise of Particle Marketing

Digital Marketing CyberTrends

Professor John M. McCann
Fuqua School of Business
Duke University

• "In the post-information age, we often have an audience of size of one. Everything is made to order, and information is extremely personalized. A widely held assumption is that individualization is the extrapolation of narrowcasting -- you go from a large to a small to a smaller group, ultimately to the individual By the time you have my address, my marital status, my age, my income, my car brand, my purchases, my drinking habits, and my taxes, you have me -- a demographic unit of one. This line of reasoning completely misses the fundamental difference between narrowcasting and being digital. In being digital I am me, not a statistical subset. Me includes information and events that have no demographic or statistical meaning. Where my mother-in-law lives, whom I had dinner with last night, and what time my flight departs from Richmond this afternoon have absolutely no correlation or statistical basis from which to derive suitable narrowcasting services. But that unique information about me determines news services I might want to receive about a small obscure town, a not so famous person, and (for today) the anticipated weather conditions in Virginia. Classic demographics do not scale down to the individual. ... True personalization is now upon us. The post-information age is about acquaintance over time: machines� understanding individuals with the same degree of subtlety (or more so) we can expect from other human beings." Source: Nicholas Negroponte, Being Digital, Alfred Knopf, 1995, p. 164

• "As microchips continue to shrink, the commercial implication should not be overlooked: Products -- and the companies that make them -- now have the ability to remember the tastes and preferences of individual customers. As a result, product marketing will soon be supplanted by relationship marketing. The ability to remember a customer, from one event to the next, is the primary requirement for sustaining an ongoing relationship, and will soon become the main reason why a customer will remain loyal to one product, rather than start over with a competitor�s. ... To profit from the incredible shrinking microchip, begin now to use information technology to incorporate memories of your customers into every conceivable aspect of your operation. Never make a customer tell you the same thing twice. ... Use microchips to learn and remember your individual customers� needs, and you may just be able to create impregnable relationships."
  Source: Don Peppers and Martha Rogers, "As Products Get Smarter Companies Will Have to Focus on Relationships," Forbes ASAP, February 26, 1996, p. 69

• "Internet guru and veteran, Tim O'Reilly, of O'Reilly & Associates, spoke about Internet hype: 'I think at this time, we, the people who work in and on the Internet community, should realize several macro-trends. First, and most important of those trends, is that the Internet is not a mass medium. It is a peer-to-peer medium. People who see the Internet as a mass medium are in trouble. Once we realize that is it not a mass medium, we should begin to see the necessity of focusing on the right content for the right audience. This may mean content or discussion groups for only five or ten select people. The Internet cannot be everything for everybody. It is much like the world of publication. There are more than 50,000 books published each year and there are some 35,000 magazines available. Each one of these publications is targeted towards a specific audience and most of those audiences are very small. Success on the Internet is based on the same principle."
  Source: Patrick McKenna, " Internet Hype & Reality," Newsbytes News Network article, February 22, 1996.

What's Next In Ad Targeting?

I've been involved with ad targeting technologies since the beginning of the Web, having founded both Real Media and TACODA. I've seen the industry evolve from early fixed banners on Web pages, to rotating ads to registration-targeted ads to cookie-based targeting to sequential targeting to search targeting -- and now to behavioral targeting. With behavioral targeting beginning to emerge as a mainstream solution, it's natural that many in the industry are beginning to ask, "What's next? What's going to be the next wave of online ad targeting?"

What do I think is next? Predictive targeting.

What's that? Predictive is one step closer to the Holy Grail of delivering the right ad to the right person at the right time in the right place. It is about truly understanding enough about the consumer's state of mind at a moment within a particular media or marketing environment to be able to predict what he or she likely needs, wants or desires -- and being able to satisfy or advance that need, want or desire with a commercial message.

It has two components. First, you need to predict the future. You need to predict what consumers likely need, want or desire. Second, you need to have a way to change that future, even if it is only to reinforce and insure that what is likely to happen actually does happen. You need to understand what type of commercial message can make the desired future most likely to occur. How do you do that?

First, you have to know something about a lot of different consumers and their actions within digital media and marketing environments. You need to understand the wisdom of the crowds. The premise is that "birds of a feather flock together" -- that knowing how lots of different consumers have acted, interacted, responded and purchased in the past will help you predict what people like them are likely to do in the future.

Second, for consumers that you want to target, you have to know a certain amount about their actual actions within media and marketing environments. You need some way to connect them to the crowds if you want to predict what they are likely to do, so you have to know something about what they have done in the past.

And third, you need to have an understanding of what types of commercial messaging are likely to create the desired results with the various types of consumers in a variety of states-of-mind and in various media and marketing environments.

None of this is trivial. Developing this kind of capability will require extraordinary scale and skills in data, marketing analytics, consumer behavior and, most important, creativity.

This will be the next generation of our industry, but it will take many years to develop. It will require much more maturity in the marketplace. While it may take a while, its development is very exciting. Even today, we already see early versions of predictive targeting in the e-commerce world -- Amazon's recommendations are a great example -- and also in some implementations of more sophisticated behavioral targeting programs.

What could slow this down? Certainly issues like privacy and over-hype could hurt, but ultimately, if predictive targeting of online advertising can improve consumers' experiences and give them ads that they want and need, it will happen, and sooner rather than later. What do you think?

Lillian Vernon Adds Tag-Based Customer Reviews

LV: Visors remain an arguable "in"

Lillian Vernon added a tag-based customer review feature to its website from PowerReviews, reports DM News.

The patent-pending customer review service identifies reviews that are written by "verified buyers," provides assistance from product users to help shoppers narrow product selection, and gives recommendations from "people like you" to help shoppers make decisions that suit their needs.

PowerReviews also sends out post-purchase emails inviting Lillian Vernon customers to write reviews. PowerReviews then creates keyword-intense pages around reviews for each product to drive search optimization results