PowerReviews and Endeca Partner to Deliver Customer-Guided Shopping Experiences Based on User Generated Content

Tag-based Reviews and Guided Navigation Experience Drive Social Navigation of Shopping Sites

http://www.powerreviews.com/social-shopping/news/press_endeca_partner_08212007.html

Cambridge, Mass. & Millbrae, Calif.--(BUSINESS WIRE)--PowerReviews™ (www.powerreviews.com), a leader in customer reviews and social merchandising solutions for online retailers, and Endeca Technologies, Inc. (www.endeca.com), an enterprise information access software company, today announced a partnership to enhance the online shopping experience by extending Guided Navigation®, search and dynamic merchandising capabilities through the use of “tag-based” customer reviews. Endeca’s signature Guided Navigation experience combined with PowerReviews’ tag-based customer reviews gives shoppers first-of-their kind abilities to explore, find and compare products by uniquely relevant criteria and peer recommendations. Shoppers can narrow product selection based on their specific lifestyles, intended uses and desired “pros” and “cons” in the product. The resulting experience offers a preview of the next generation storefront, and is designed to boost conversion rates, increase customer satisfaction and provide competitive differentiation over sites that simply offer product page level reviews.

Customer reviews and ratings have become an integral part of online shopping decisions – 71% of online shoppers read reviews before they purchase a product online, based on a recent Forrester Research study. In addition, customer reviews and ratings are rated the #1 most helpful website feature in making informed product decisions, with 92% of customers finding them extremely or very helpful in making online shopping decisions, according to an April 2006 study by the eTailing group and J.C. Williams Consultancy.

“Customer reviews have long played an important role informing the purchase of new products both on and off line. By working with pioneers like PowerReviews -- and combining the best of both technologies -- we’re now able to inject this valuable information seamlessly into the user’s shopping experience in ways that were not previously possible,” said Matt Eichner, SVP Strategic Marketing and Development, Endeca. “Our early work with PowerReviews highlights the extensibility of the Endeca platform and foreshadows innovations to come in the very near future.”

Social navigation is an emerging capability that leverages user generated content – reviews, opinions, recommendations, posts – to create new ways to explore, find and analyze information. In the case of Endeca and PowerReviews, this is achieved by leveraging user-generated tags (pros, cons, and best uses of products reviewed using PowerReviews) combined with product characteristics (price, brand, specifications) to present a cohesive and comprehensive collection of refinements and navigation options. This is made possible using Endeca’s core MDEX Engine™ technology, which takes PowerReviews’ ever-changing user-review content and displays dynamic refinements with the speed and flexibility to allow shoppers to choose the path that suits them best.

The first live example of this “tag-based” approach to social navigation can be seen on PowerReviews’ shopping research portal -- Buzzillions.com. Buzzillions demonstrates the ease and power of customer-guided shopping, utilizing the combined capabilities of PowerReviews and Endeca. For instance, the Digital Camera page on Buzzillions.com (www.Buzzillions.com/digitalcameras) illustrates how a consumer can find a digital camera that is ideally suited to him based on his photography lifestyle, interests and intended camera uses. With just a few clicks, the consumer answers questions relating to his affinity group (people like him), intended uses, pros he is seeking and cons he would like to avoid, and narrows the product selection from 536 digital cameras to a handful to look at more closely.

“As both a client and a partner, we have seen first hand the incredible opportunities this partnership creates with the use of social navigation on our shopping research portal Buzzillions.com,” said CEO Andy Chen. “And as we see it, we provide the “social” and Endeca provides the “navigation,” and together we provide the opportunity for any retailer to experience the customer satisfaction, trust and sales benefits first hand.”

About Endeca™
Endeca is a next-generation information access company, uniting the ease of search with the analytical power of business intelligence. Combining patented intellectual property, breakthrough science and a deep focus on user experience, the Endeca Information Access Platform helps people find, analyze and understand information in ways never before possible. Leading global organizations like ABN AMRO, Bank of America, Boeing, Cox Newspapers, Dice, The (US) Defense Intelligence Agency, The Home Depot, Hyatt, IBM, John Deere, The Library of Congress, Nike, and Walmart.com rely on Endeca to power business-critical applications that increase revenue, reduce costs and streamline operations. Headquartered in Cambridge, MA, USA, Endeca is a private company with worldwide operations. For more information: www.endeca.com or info@endeca.com.

About PowerReviews
PowerReviews is an enterprise solutions company that provides customer reviews and social merchandising solutions to multi-channel retailers, driving higher conversion and increased purchase satisfaction. PowerReviews’ patent-pending PowerTags™ technology captures customer opinions in their own words, making reviews more useful for shoppers, empowering them to make more informed and confident purchase decisions. Its customers include Staples, ToysRus, Ace Hardware, Ritz Camera, The Sports Authority, over 100 more. With the introduction of Buzzillions.com, the company has entered the consumer shopping portal market, leveraging its tag-based technology to introduce social navigation and affinity recommendations into the shopping research process for consumers. Based in Millbrae, California, PowerReviews is a privately held company with funding from leading venture capital firms Menlo Ventures and Draper Richards. For more information on the company, visit www.PowerReviews.com To experience the shopping benefits from Buzzillions, visit www.Buzzillions.com.

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Editor's Contact:

Lisa Tarter
TidalWave PR
415-440-4278
lisatarter@yahoo.com

Marketers Shifting Budget to Online User Experience

Website user experience is becoming the major focal point for marketers in an increasingly competitive digital environment, according to research from E-consultancy and behavioral research consultancy Bunnyfoot, reports MarketingCharts. The Usability and User Experience Report 2007 found that organizations, on average, are spending 13 percent of their website design budgets on usability; moreover, it found they are spending 9 percent of their ongoing website maintenance budget on usability. Some 72 percent of UK organizations are planning to increase their usability budget over the next 12 months - a greater percentage* than for any other area of digital marketing, E-consultancy said. The more than 700 internet marketers who took part in the research rated Amazon, the BBC and Google as the best websites for user experience. According to the report, the biggest benefits of usability investment are… Improved perceptions of brand Increased conversion rates Greater customer loyalty and retention These were the top six benefits of usability, based on the number of company respondents who said they had been a "major benefit": Improved perceptions of brand (54 percent) Increased conversion rates (53 percent) Greater customer loyalty and retention (46 percent) Increased customer advocacy (38 percent) Increased traffic (36 percent) Improved search rankings (33 percent) The research also found that time pressure to get things done was the biggest barrier in the way of providing the best possible user experience: Some 56 percent of online marketers said this was one of the three biggest problems. The next-biggest barriers cited by internet marketers were lack of internal resource (45 percent), lack of budget (37 percent) and company culture / politics (35 percent). MarketingCharts provides more data and charts from the study. * According to E-consultancy research, these are the percentages of U.K. organizations planning to raise their budgets in other areas of digital marketing: SEO (62 percent); paid search (60 percent); email (52 percent); affiliate marketing (40 percent); online display advertising (34 percent); mobile (20 percent) (Source: E-consultancy / Neutralize U.K. Search Engine Marketing Report 2007)

AOL to buy ad firm Tacoda

Tue Jul 24, 2007 8:55AM EDT

NEW YORK (Reuters) - Time Warner Inc.'s AOL unit said on Tuesday it has agreed to buy Tacoda, an online advertising company that uses behavioral targeting techniques to track Web user habits.

The deal is the latest acquisition by AOL to bolster its online advertising tools following its decision to move away from its Internet access business and instead offer consumers free services supported by ads.

Financial terms of the deal were not disclosed by the companies. A person familiar with the situation said AOL was paying $275 million in cash for Tacoda.

Tacoda's technology allows brand advertisers to target messages to specific audience segments based on the kinds of sites they have visited on the Web.

The capability aims to help Web publishers capture one of the next big waves of growth for Internet advertising, which is drawing marketing dollars from other media outlets.

Industry tracking firm eMarketer has forecast the market for behaviorally targeted advertising will increase to $3.8 billion in 2011 from $350 million last year.

New York-based Tacoda employs about 100 people.

Web media and technology companies have created a lively auction for online ad firms, including Google Inc's proposed purchase of DoubleClick for $3.1 billion and Microsoft Corp's planned acquisition of aQuantive for $6 billion.

AOL has made smaller purchases of ad firms, including mobile ad network Third Screen Media and online video ad company Lightingcast.

Yahoo, Others Work to Up Relevance of Online Ads

Build Technology to Help Marketers More Effectively Reel In Targeted Consumers

By Abbey Klaassen

Published: July 02, 2007

A correction to this article is appended


NEW YORK (AdAge.com) -- Marketers are taking great pains to create better-targeted online campaigns, but the question remains: Can the creative production keep pace? After all, what good is a targeted media buy if the ad itself isn't relevant.

Using SmartAds, a marketer such as United can follow a consumer around Yahoo channels.

Several potential pieces to the solution are sprouting up from major portals as well as start-ups funded by behemoths such as British Telecom. The latest move comes from Yahoo, which is offering what it hopes will eventually help advertisers offer more relevant and personal creative to specific groups of customers.

"The question is, how do you have a brilliant idea at scale and produce versions that are tweaked and adjusted for everything from the audience's ethnic differences to prior purchase differences?" said David Kenny, chairman of Digitas and Publicis Groupe Media. "Ironically, the internet will get too expensive if you produce these in the old way."

First step: SmartAds
Yahoo's product, coined SmartAds, is admittedly a first step and a simplified approach to this problem. It switches in text-based offers and simple graphical elements on the fly, based off behavioral targeting data. And it's part of a larger trend in which advertisers will increasingly need to rely on technology to help them tailor creative in fragmented media environments.

Yahoo gave an example of SmartAds in action: A San Francisco-based user might be checking out Vegas deals on Yahoo Travel but then migrate onto a Yahoo Sports page, where he would be served up a display ad promoting $99 flights between San Francisco and Las Vegas, thanks to the behavioral data gleaned from web-surfing history. It's similar to what Visible World is doing for video content, but with Yahoo's behavioral targeting thrown in.

Todd Teresi, senior VP-display marketplaces, said what SmartAds does is marry creative assembly and targeting. "Advertisers create the creative templates and we do the heavy lifting," he said. The technology was created within Yahoo, and Mr. Teresi said the company has debated whether to license the technology to other web publishers. It will likely tap the technology for use on sites that it has selling relationships with, such as Comcast and eBay, and use the technology to help move more publishers in Yahoo's direction and further the network that the portal is trying to build.

Strong response in beta tests
In beta tests, the technology has lifted response two to three times above what ads were previously getting, Mr. Teresi said. Digitas has been testing the platform in the travel category -- which is where Yahoo is launching it -- but also use it for auto, retail and technology clients as Yahoo rolls out the offering. "We know that it works well but it's early days," Mr. Kenny said.

As the service becomes more sophisticated, Mr. Teresi expects it to be able to incorporate more advanced targeting, such as automatic optimization of creative elements -- in other words, figuring out and serving up on the fly the combination of images and words that work best against particular audience targets.

But Yahoo is not alone in trying to help marketers come up with more versions of better-targeted creative without significantly increasing the dollars they've always spent on single, mass messages.

Todd Teresi

Real Time Content, which is partially funded by British Telecom, is attempting to take on a similar challenge except with video and audio content. It hopes to serve up the most relevant content -- entertainment, news and advertising content -- on the fly based on information that's known about the consumer and is having discussions with ad network Blue Lithium to help it cull that data.

"If I'm a soccer mom and you shot this nice ad on a road in Scotland, am I likely to test drive?" asked Naj Kidwai, CEO of Real Time Content. "No. But if you shot an ad that speaks directly to me I'm likely to answer the call to action."

Disrupting the ad agencies
He admits the model costs a bit more on the front end because an advertiser might have to shoot a few more creative assets and storyboard several possible combinations, but he believes the personalization on the back end will incite people to pay attention to the message. He also said agencies might find the model quite disruptive.

"If you're an ad agency, this is disruptive," he said. "It's a complete new way of thinking about media."

Visible World allows TV and video advertisers to switch creative based on what channel it might be airing or external sales factors such as the weather. And other start-ups, such as ImageSpan, hope to streamline what can be burdensome processes, such as rights clearances for creative.

Of course, many of these solutions are more about making additional versions of ads from assets that a marketer already has. Marketers will still need to find ways to lower the actual production of those assets. Mr. Kenny said his shop is moving much of its production off-shore, where it is cheaper (that was the impetus behind Publicis' new production shop, Prodigious), or using computer- or consumer-generated creative.

At a recent Internet Advertising Bureau forum about the use of consumer-generated media and advertising, much of the talk focused around its potential to help reshape production and bring down costs.

The cost of production "is one of the last barriers to brands and agencies truly being able to communicate in a relevant way, a more micro way, on a regular basis," Tom Lynch, VP, Avenue A/Razorfish, said at the event.

Context And The Crowd Trump Behavior

by Steve Smith, Friday, June 1, 2007

MOST BEHAVIORAL TRACKING WORKS ON the simple assumption that past behavior is a solid predictor of future need. Not so in all applications, says Baynote CEO Jack Jia. The founding CTO of content management giant Interwoven took a crash course in social science, which he claims tells us that group behavior in a given context is a better indicator of any given user's future actions than piles of personal behavioral history. He tells us how the wisdom of the crowds in context informs Baynote's approach to content and product recommendations.

Behavioral Insider: You were at content management supplier at Interwoven for eight years. How did that experience evolve into Baynote?

Jia: The last years of my Interwoven experience really helped me start thinking about the bigger problems people were facing. Customers were saying, the more content I am publishing, the less valuable it becomes. People aren't finding it. I created all this stuff but they aren't really getting value. This became the genesis of this new company that helps people consume this content more effectively. It follows how information and knowledge is accumulated and how it is passed down generation to generation.

Behavioral Insider: Explain that connection to human behavior patterns.

Jia: I actually spent almost six months studying and working with some of the social scientists at Stanford, really thinking through to the right solution -- not from a tech or computer science perspective, but more from psychology, sociology and organizational behavior.

We produce content recommendations. Where other people find value with similar things on your site, we start to accumulate that knowledge by observing their behaviors. We can deduce what is useful and what is not. and feed that back to the users with similar needs. The bottom line is the conversion rate improvement for any business site. Our e-commerce customers have seen somewhere in the area of 20%-plus revenue lift. The support side is cost reduction. Fewer people call if they find the answers online. We just did Turbo Tax's support site and they saw a huge reduction of the support costs by having the community being the backbone of providing what answers to provide to which questions.

Behavioral Insider: Explain that connection between the social science you learned at Stanford and the company's behavioral model.

Jia: We found what we call the wisdom of the invisible crowd. This is a big insight that the psychologists and the social scientists have known for years. There is a controversy between behavioral targeting and contextual targeting. A lot of computer scientists believe you can predict people based on their past behaviors, that past needs can actually dictate what I want in the future. And that's really the basis of personalization and the more recent BT.

When we went to Stanford and really studied this, we found [past behavior] is a very poor predictor, because humans have way too many profiles. I am a father, a son, a brother, I like travel, I like a lot of things. You can track all my past behaviors all you want, but in any given moment when I go onto a site it is very hard for you to predict what I want. We believe that particular approach has a low accuracy in terms of predicting human behavior.

However, there is opposite research that is well known among scientists that asks whether people are unique. We are raised with the notion that I am unique and don't have needs quite like other people. But the scientists proved we are not unique at all. We are pack animals. Pretty much 95% of people will need the same thing. We only need to find out under what context what things are useful, and then present that product or content given the context. Then the prediction is very accurate.

Behavioral Insider: Describe how that insight translates into a recommendation method.

Jia: For example, although we know each individual and track them, we don't really care what they did yesterday. We can build profiles, but generally we don't use that primary guidance. Instead, say at our customer Cisco's site, someone goes to the router portion of the site -- then you will more than likely behave like other people who have interest in routers. There is a router peer group vs. the switches Cisco also sells, or the investor visitors vs. the job seeker. They can be the same people with different profiles, but once you enter that router world you behave much like the other people in routers.

We don't really care about your behaviors. And given our attention is so short, we can only recommend to you three or four documents before you get impatient. And then which ones you choose is very important. In aggregate, you are watching everyone's behavior. But it's not necessary to track behaviors day after day.

Behavioral Insider: But what data points are you collecting to understand what people will do in a given context?

Jia: That's one of the unique things. Almost all of the vendors out there except Amazon is collecting clicks. Through our studies at Stanford we found the click doesn't tell you anything. The click is the function of the area of the site you are on. If you put a link on the front page, you will get more clicks. It is a self-fulfilling prophecy. If you link less-used content on the front page more people will click on it, and then people back out of it.

So click doesn't tell whether a piece of content is useful or not. It is the other things we are tracking, about 20 behavioral characteristic that in aggregate can tell us, for instance, how much time you spent on a piece of content relative to the size of the content. It really depends on what other like-minded peers also spent time with. Whether you come back to the same content. A repeat visit to the three or four products you like, we call virtual bookmarking. So, basically how you navigate now is telling.

Behavioral Insider: What kind of sample base is needed to make predictions?

Jia: One person can be noisy. Two people still noisy. Three to 10 with similar needs, like-minded peers, will start to cancel the noise out. By observing a set of heuristics, that forms a unique fingerprint of someone who likes or dislikes the content. Then we compare that fingerprint with like-minded peers, 10 or 100 other people. The noise will cancel each other out in 100, and what remains is a consistent pure signal. That is where we know that this content is truly important to that group of people.

Where'd you go? Advertisers know

MICHELE GERSHBERG

Reuters

June 21, 2007 at 9:57 AM EDT

NEW YORK — Personal identity has taken on a new meaning in the digital age, where basic facts like your name, address or age are far less important to some people than the collected records of what you were looking at online.

Technologies for monitoring and interpreting Internet habits as a predictor of future behaviour cropped up at the start of this century, but only now are gaining momentum as the newest gold mine for Web sites and their advertisers.

Known as behavioural targeting, the premise is to follow the sites you visit and build a picture of what products may interest you, then deliver related advertising in time for you to choose your purchase.

U.S. marketers will nearly double their spending on such advertising to $1-billion (U.S.) next year from $575-million in 2007, according to research firm eMarketer. By 2011, behavioural targeting will surge to nearly $3.8-billion of online ads.

Industry executives say it's a boon to the consumer, who in an ideal world will only receive commercial messages that suit them personally, while enjoying online entertainment or information for free.

“As long as I'm seeing relevant advertising and as long as I am receiving free content, I am a pretty happy person,” said Bill Gossman, chief executive of behavioural targeting firm Revenue Science. The company's clients have included media outlets from Reuters Group Plc to Walt Disney Co.'s ABC News and Gannett Co. Inc.'s USA Today.

To protect individual privacy, U.S. companies who sell such services say they do not link the behavioural data with the actual names and addresses of computer users.

“We have no idea of who that individual is and I don't want to know,” Gossman said. “What marketers want to know is, what is their intent?”

Critics charge the technologies will only stoke corporate efforts to accumulate an ever-increasing pile of data on a person's behaviour whether on the Internet or elsewhere.

“My concern as we give away ever more data about ourselves, our activities, our behaviour in the world, our choices ... is that fairly rich data sets can be built up, maybe not in one place but relationally across the Web,” said Adam Greenfield, a futurist and user experience consultant.

The greater danger, he said, involves the ability to match data on Web behaviour with information such as a person's location, via their cell phones, or commercial transactions.

For a marketer, there is no such thing as too much information when it comes to making a sales pitch.

“The picture isn't complete until you literally plant tracking devices inside somebody's arm,” said Emily Riley, an analyst at JupiterResearch. “When I go to the mall, nobody at Google is going to know what stores I have visited.”

WHAT'S A DEMOGRAPHIC?

For example, a person comparing automobile brands online is likely interested in buying a car. Behavioural targeting narrows those categories further: Is the car a model that would seat a family? Did the individual inquire about hybrid vehicles, suggesting interest in protecting the environment? Did they also look for an infant's safety seat?

From that data, enough information could be gleaned about a person to know that they might be interested in not just the latest Volvo or Honda model, but perhaps biodegradable diapers as well.

“The ideal is where they literally know your preferences and what motivates you,” said Riley. “That is really personalized. If we are at Web 2.0, that would be Web 3.0, where your entire personality is online.”

Build a database of such people's habits and you can index their interests to create an “audience” of individuals. They may be at different places online and in the real world, but they all show a preference for environmentally friendly products, or tend to spend more money on shoes than on hats.

That proposition has turned traditional advertising, long dominated by the television commercial, on its head. In the Golden Age of U.S. advertising, a marketer could be confident that buying time for a commercial on three TV networks would reach a wide swathe of the domestic audience.

Those audiences were defined by demographic categories like age and gender. TV networks based the price of their ads on a small sample of the viewing habits of U.S. consumers, charging their highest premium for programs popular among young males.

As people now get their entertainment on everything from cell phones to video games, the audience has dispersed from their living rooms. That makes them harder to track down, but offers the advantage of more precise information once they are found.

Internet advertising agencies are reaping the advantages of these fundamental changes, largely because they help figure out where to find a specific audience and build campaigns tailored to the Internet as a medium.

“This is going to be a Golden Age of advertising,” said Scott Howe, president of the DRIVEpm behavioral unit of online marketer aQuantive Inc. “It's the ability to deliver messages in sequence and tell a story. Advertising is going to become fun again. It's going to become serialized.”

Howe said behavioural ad campaigns can be just as useful for filtering out certain consumers. In one campaign for a software product, the manufacturer targeted customers who selected the product for their online shopping cart but deleted it before making their final purchase.

The rationale was these customers had already shown interest in the product, and just needed some further incentive to make an order.

“It was the worst-performing campaign. It turned out these people weren't buying the software in the end because it was incompatible” with their computers, he said. The marketer then used the same list of customers to make sure they didn't receive such advertising in the future.

Just try to do that on television.

The Behaviorally Targeted Ad Audience

JUNE 18, 2007

Is your campaign too finely targeted?

Consumers like the idea of getting relevant ads tailored to their interests — at least online. In a study published in January 2007 by ChoiceStream, 70% of respondents said they were interested in receiving personalized advertising via the Internet.

That was more than those who wanted such ads delivered to their TVs, and far more than those who were interested in personalized mobile phone ads.

The more relevant an ad can be, the better. For instance, the more general relevance of contextual targeting tends to lag behind the more specific focus of behavioral targeting, at least according to surveys from companies in the behavioral targeting space, such as Revenue Science.

In a May 2007 consumer study from that company, JupiterResearch and AOL, the following top-line results compared contextual with behavioral methods:

1. 74% of frequent ad viewers stated they would pay more attention to a contextual ad vs. 89% who would pay more attention to behavioral ads
2. 63% of online consumers say they pay more attention to ads that fit their specific interests vs. 49% who pay more attention to ads that are directly related to their current online activity; that data could be interpreted as more attention for contextual (specific interests) than behavioral (current online activity)
3. 67% of online shoppers — defined as those who research and/or purchase online — notice behaviorally targeted ads vs. 53% who notice contextual targeted ads

The personalization inherent in correctly done behavioral targeting tends to mean greater awareness among the target audience. In the ChoiceStream survey, 38% of respondents say they are more willing to pay attention to such individually focused advertising.

The personal touch inherent in well-segmented behavioral targeting appeals even to those Internet users who are sensitive to privacy issues, with 50% of that group saying they like to receive promotions and offers that are based on their interests and tastes, according to a study from Ponemon Institute sponsored by Claria.

As useful as targeting can be, eMarketer Senior Analyst David Hallerman says that it can be taken too far.

"An advertiser can slice and dice the audience too much," Mr. Hallerman says. "While the target may then be more accurate, the number of people exposed to the message, in the time needed for the campaign, can become too limited to be effective. Marketers need to remember not to let their desire for the perfect drive out the good."

Learn more about how advertisers and publishers can find their audiences. Read the eMarketer Behavioral Targeting: Advertising Gets Personal report.

Behavioral Advertising on Target... to Explode Online

JUNE 11, 2007


Brand advertising is moving onto the Internet.

After years of deriding the Internet as "only" a direct advertising vehicle, major brand marketers are discovering powerful new ways to target their users online, and major online players are clearly noticing.

"Nearly $10.5 billion sends a very clear message about future strategies," says David Hallerman, eMarketer Senior Analyst and the author of the new eMarketer report, Behavioral Targeting: Advertising Gets Personal." "Four deals in 35 days — Google-DoubleClick, Yahoo!-Right Media, WPP Group-24/7 Real Media and Microsoft-aQuantive — are a clear indication of the onrush of brand-focused advertisers onto the Web."

Internet advertising is no longer all about paid search. Targeted online display advertising is exploding.

Spending for Internet advertising with a behavioral targeting component will soar from $575 million this year to $1 billion in 2008, and that still represents only 11% of the US display, rich media and video market.

"With the greater attention paid to overall ad targeting, and the rising focus on brand messages online," says Mr. Hallerman, "this market will nearly quadruple by the end of 2011, growing to $3.8 billion."

There are three key reasons for the large spending gains:

1. Behavioral targeting helps marketers reach a more engaged audience with fewer ad impressions
2. Behavioral targeting helps publishers monetize their "long tail" pages — the non-premium or remnant inventory that either is sold for less money or remains unsold
3. Even though individuals are often not aware of the process, many tend to find ads targeted by their actions to be more relevant to their needs, and therefore more palatable or even welcomed

"The eMarketer outlook for behavioral targeting is optimistic," says Mr. Hallerman, "but not overly so, since the scalability required for substantially larger spending is simply not there yet."

Scalability involves several factors, including the broad reach among Web sites — both through portals and ad networks — needed to allow fine-tuned segmenting and yet maintain a reasonable size for each slice of the audience.

"Another element holding back behavioral targeting's growth is the technology itself, which despite its benefits still seems counterintuitive to many advertisers," says Mr. Hallerman. "That they need to pay nearly the same rate for a remnant page as they would for a contextually targeted page placement goes against the grain."

Nevertheless, behavioral targeting spending will continue to grow at a significant rate, peaking at nearly 74% next year due to a combination of greater advertiser acceptance, greater publisher support (only about one-third of Web sites can do behavioral targeting, according to Advertising.com) and greater overall online ad spending with the national elections and Summer Olympic Games.

By 2011, "very large publishers will be selling 30% to 50% of their ad inventory using this [behavior targeting] technique," predicts Bill Gossman, CEO of Revenue Science.

See what lies ahead for advertisers and publishers alike — read the new eMarketer Behavioral Targeting: Advertising Gets Personal report today.

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?

Merchandising As Targeting, Targeting As Merchandising

Merchandising As Targeting, Targeting As Merchandising by Phil Leggiere, Wednesday, June 6, 2007 THE METAPHOR of the auction place has captivated the online world of late. Thus far, however, applications of the model have been divided into two separate realms, e-commerce transactions (a la affiliate marketing) and conventional banner or text ad placement. The next iteration of the model, Pradeep Javangula, CTO of Tumri, predicts below, will involve a new synthesis of the ad network and e-commerce: a merchandising network, with product offer delivery optimized by behavioral and other forms of targeting. Behavioral Insider: Tumri doesn’t seem to fit into any conventional category of ad network. Could you describe what you do? Pradeep Javangula: We call what we do automatic personalization. Our background is in artificial intelligence and the semantic Wb and our focus is on classifying large volumes and content, specifically content related to product offers and services. So we see Tumri as a targeted merchandising network for delivering product offers, which may include ads but are more than just conventional banner or text ads. We think in terms of offers rather than ads. Our clients include many of the most successful online merchants, over 1500 merchants and 500 brands. We match up their offers to the right publishers and consumers. BI: How do you make your merchant catalogs more targetable? Javangula: Shopping catalogs have enormous amounts of very rich information. In many ways, the Web -- or very large parts of it -- can be looked at as one big catalog. Take any large e-tailer. The sheer quantity of information they have online is enormous. The opportunities for organizing and, by extension, targeting product offers based on that data are similarly enormous, but overwhelming for most marketers. Latent in all that data, though, are all sorts of demographic and psychographic attributes. Across all product categories for every brand, you can associate demographic and psychographic markers or tags. Take a Polo shirt, [for example], and its higher-end demographic and more trend-oriented buyer, [while] Lee Jeans are for the more price-conscious and practical-minded clothes shopper. What we do is then classify every piece of product information and give it a demographic and psychographic tag. BI: Where does the consumer come in? Javangula: Then the next step is to find the most relevant match between every user who visits a publisher Web site and the product content they’re most likely to be interested in based on information about who they are. When users visit a Web page, there’s an IP address associated with them which tells you the location they came from -- which in turn gives you a good idea of their demographics as culled from census data. We look at the time of day they visit the site and can infer what they’re interested in, based on profiles of items typically shopped for at that time of day and the demographic profile of people who populate the site that time of day. Very important, you can see the URL the user is coming from. We categorize every Web publication by content analysis in much the same way we extract demographic and psychographic attributes related to product catalogs. BI: Could you discuss the behavioral component? Javgula: Finally, if they’ve clicked through to the Web site using a keyword search, you then move from demographic information to purchase intent. So from the moment a user enters the site we have begun to frame a fairly detailed profile of who they are and what their interests are -- a profile that will be continually refined based on other publications they go to. From there, we begin to evolve a more behaviorally based profile of them based on product browsing and sales history. BI: How do you do that? Javangula: Within the publisher site itself we look at individual pages as proxies of a user’s intent. Say one million users have been to that page. Each one that comes brings a profile that validates, conflicts with or in some way adds to the brand, demographic, psychographic or behavioral attributes we associate with that page. So page by page the system is continually learning from experience. Based on everything we know, we do a real-time algorithmic decision based on our best hypotheses about the most relevant product offer we can introduce. BI: What kind of options do publishers have in selecting which offers will run on their sites? Javangula: Basically as much or as little as they want. We have them create a very easy-to-use template or wizard describing the kind of offers they want to run, which can be customized by categories, merchants, price range, keywords and other criteria based on their own user profile. Many give us a general set of criteria and then use our technology to drill more deeply. Others want more control. Either approach can be accommodated. BI: What kind of response is there from clients? Javangula: Once they see major improvements in click-through and conversions, most of them get the model very quickly. We think the boundaries between the advertisement, as it’s traditionally been known, and overall content, are becoming more and more blurred. Clients say to us ‘Wow. This is an application, not an advertisement’ -- and that, in many ways, is the best way to look at it.

Targeting online ads - the early morning fog has yet to

Using technology to target online ads is not a new idea, but that doesn’t make it a bad one. An interview in e-consultancy’s daily briefing yesterday with Paul Cook of PositiveFeedback got me thinking about this topic and it seems to me that this market might be about to have it’s time.
PositiveFeedback is a firm that provides targeting tools for online retailers and their ad agencies.
I took two things away from the interview:
The realisation that many sites haven’t been ready for ad targeting until now - to get value out of targeting ads you need to be measuring ad performance and have a well designed site. Many companies are only getting to that point now, and in this context it is important to remember that a lot of targeting can be done manually - technology is only required to squeeze out the last bit of extra yield - so ad optimising technology hasn’t historically made it to the top of people’s priority lists.
There is a lack of clarity on the uplift in converstion that targeting will bring. On the one hand in the interview Paul Cook says 10% is a reasonable target for most websites, and on the other we have Glen Drury of Yahoo UK saying in the Sunday Times that they get 56%.
This makes it sound like an early market to me. Only starting to get to the top of the priority list for customers and disagreement on the benefits available. If it is an early market the obvious next question is how big it will be. My gut tells me there is a lot to go after here - particularly as the amount of low CPM inventory keeps rising as social networks grow in popularity.
So far companies in this market have generally had a difficult time. Advertising.com (in which we invested when I was at Reuters) has been an exception, and they achieved success by using their optimisation technology to arbitrage play, buying on CPM and selling on CPA.
There are signs that things might be chaning though - Revenue Science looks like it is making good headway, Wunderloop is a very interesting company in this space with some interesting backers, as is Tacoda, and finally Ominture bought UK behavioural targeting business TouchClarity earlier this year.

Context And The Crowd Trump Behavior

by Steve Smith, Friday, June 1, 2007
MOST BEHAVIORAL TRACKING WORKS ON the simple assumption that past behavior is a solid predictor of future need. Not so in all applications, says Baynote CEO Jack Jia. The founding CTO of content management giant Interwoven took a crash course in social science, which he claims tells us that group behavior in a given context is a better indicator of any given user's future actions than piles of personal behavioral history. He tells us how the wisdom of the crowds in context informs Baynote's approach to content and product recommendations.

Behavioral Insider: You were at content management supplier at Interwoven for eight years. How did that experience evolve into Baynote?

Jia: The last years of my Interwoven experience really helped me start thinking about the bigger problems people were facing. Customers were saying, the more content I am publishing, the less valuable it becomes. People aren't finding it. I created all this stuff but they aren't really getting value. This became the genesis of this new company that helps people consume this content more effectively. It follows how information and knowledge is accumulated and how it is passed down generation to generation.

Behavioral Insider: Explain that connection to human behavior patterns.

Jia: I actually spent almost six months studying and working with some of the social scientists at Stanford, really thinking through to the right solution -- not from a tech or computer science perspective, but more from psychology, sociology and organizational behavior.

We produce content recommendations. Where other people find value with similar things on your site, we start to accumulate that knowledge by observing their behaviors. We can deduce what is useful and what is not. and feed that back to the users with similar needs. The bottom line is the conversion rate improvement for any business site. Our e-commerce customers have seen somewhere in the area of 20%-plus revenue lift. The support side is cost reduction. Fewer people call if they find the answers online. We just did Turbo Tax's support site and they saw a huge reduction of the support costs by having the community being the backbone of providing what answers to provide to which questions.

Behavioral Insider: Explain that connection between the social science you learned at Stanford and the company's behavioral model.

Jia: We found what we call the wisdom of the invisible crowd. This is a big insight that the psychologists and the social scientists have known for years. There is a controversy between behavioral targeting and contextual targeting. A lot of computer scientists believe you can predict people based on their past behaviors, that past needs can actually dictate what I want in the future. And that's really the basis of personalization and the more recent BT.

When we went to Stanford and really studied this, we found [past behavior] is a very poor predictor, because humans have way too many profiles. I am a father, a son, a brother, I like travel, I like a lot of things. You can track all my past behaviors all you want, but in any given moment when I go onto a site it is very hard for you to predict what I want. We believe that particular approach has a low accuracy in terms of predicting human behavior.

However, there is opposite research that is well known among scientists that asks whether people are unique. We are raised with the notion that I am unique and don't have needs quite like other people. But the scientists proved we are not unique at all. We are pack animals. Pretty much 95% of people will need the same thing. We only need to find out under what context what things are useful, and then present that product or content given the context. Then the prediction is very accurate.

Behavioral Insider: Describe how that insight translates into a recommendation method.

Jia: For example, although we know each individual and track them, we don't really care what they did yesterday. We can build profiles, but generally we don't use that primary guidance. Instead, say at our customer Cisco's site, someone goes to the router portion of the site -- then you will more than likely behave like other people who have interest in routers. There is a router peer group vs. the switches Cisco also sells, or the investor visitors vs. the job seeker. They can be the same people with different profiles, but once you enter that router world you behave much like the other people in routers.

We don't really care about your behaviors. And given our attention is so short, we can only recommend to you three or four documents before you get impatient. And then which ones you choose is very important. In aggregate, you are watching everyone's behavior. But it's not necessary to track behaviors day after day.

Behavioral Insider: But what data points are you collecting to understand what people will do in a given context?

Jia: That's one of the unique things. Almost all of the vendors out there except Amazon is collecting clicks. Through our studies at Stanford we found the click doesn't tell you anything. The click is the function of the area of the site you are on. If you put a link on the front page, you will get more clicks. It is a self-fulfilling prophecy. If you link less-used content on the front page more people will click on it, and then people back out of it.

So click doesn't tell whether a piece of content is useful or not. It is the other things we are tracking, about 20 behavioral characteristic that in aggregate can tell us, for instance, how much time you spent on a piece of content relative to the size of the content. It really depends on what other like-minded peers also spent time with. Whether you come back to the same content. A repeat visit to the three or four products you like, we call virtual bookmarking. So, basically how you navigate now is telling.

Behavioral Insider: What kind of sample base is needed to make predictions?

Jia: One person can be noisy. Two people still noisy. Three to 10 with similar needs, like-minded peers, will start to cancel the noise out. By observing a set of heuristics, that forms a unique fingerprint of someone who likes or dislikes the content. Then we compare that fingerprint with like-minded peers, 10 or 100 other people. The noise will cancel each other out in 100, and what remains is a consistent pure signal. That is where we know that this content is truly important to that group of people.

New book on Behavioral Targeting

New book on Behavioral Targeting

Rob Graham’s new book on Behavioral Targeting and online advertising has been distributed to OMMA, iMediaSummit and AdTech audiences as part of its introduction, and now you can own a copy as well..

Fishing From A Barrel takes an energetic and foundational look at how behavioral targeting is changing the face of advertising as we know it and introduces readers to the fundamentals of behavioral targeting technologies and how advertisers and publishers can use BT to achieve greater campaign and ROI results for their online advertising.

While still in its infancy, Behavioral Targeting is filling in many of the holes that have been part of the direct marketing landscape for over 100 years. Fishing From A Barrel brings readers on a journey that introduces them to concepts such as:

• The future promise of Behavioral Targeting
• Why Mass Marketing isn’t the best way to reach an audience
• How to target and market to ‘individuals’
• How to plan for and create highly targeting ad campaigns
• How publishers are using BT to turn a huge profit
• What you need to know about ‘Customerization’
• How new targeting data goes well beyond demography
• Why contextual targeting often falls short
• Understanding and using ad networks
• Using BT with traditional media channels
• How to collect and use relevant web analytics
• Understanding new definitions of Reach, Acquisition and Conversion
• How to create targeted audience segments
• The importance of privacy to consumers
• What makes consumers consume?
• Meeting consumer needs and expectations with every campaign
• The Foundational Communications Model
• Communicating Interactively
• Who’s who in Behavioral Targeting
• BUY THE BOOK HERE
  

Getting Ads to the Right Eyeballs (Page 4 of 4)

BEHAVIORAL MARKETING

Published: April 20, 2007

Getting Ads to the Right Eyeballs (Page 4 of 4)

By Michael Estrin

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The challenges facing BT

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To paraphrase Graham, there is an elephant in the room when it comes to BT, namely a lack of standardization across solutions. According to Graham, this is no small obstacle, as he writes, "It could prevent BT from gaining the foothold it really needs to complete its paradigm shift."

As Graham sees it, the landscape of BT solutions is a mixed bag of practices because providers employ different approaches to reach consumers. While Graham concedes that the spirit of experimentation in that area will likely pay dividends in terms of innovation, it is something of a drawback for advertisers because running a campaign with a single vendor won't put the message in front of all potential buyers.

For Graham, there is no easy fix for the standardization problem. Although he points out that media exchange solutions and the establishment of standards by a governing body such as the IAB should go a long way toward allowing BT to reach its full potential.

A primer on privacy
At some point in a conversation about BT, someone will likely use the S-word, according to Graham: spying. "There's no way to sugar coat this," Graham writes. "In order to learn more about individual consumers, marketers have to resort to 'spying.'"

While Graham details the some of the legal and business concerns those employing BT should have when it comes to issues of privacy, he makes the point that advertisers and publishers who use BT need to demonstrate to consumers that the practice benefits all parties involved.

"Benefit is the key word here," Graham writes. "As consumers, we demand to know 'what's in it for me' before taking any action. Relevancy is king. If I'm going to give you something, I expect to get something in return."

Beyond BT, the human element
While BT may look like a numbers-heavy discipline, the truth of the matter is that it's really more of a human art. After all, as Graham explains, "it's difficult to understand the parameters of BT without first understanding the realm of human behavior." For that reason alone, Graham delivers some basics on studies in human behavior as they relate to ad campaigns.

According to Graham, the relevance of an ad, whether it's served up via BT or otherwise, comes down to how the ad plays to our core emotions. Whether the ad meshes with our self-described identity, or whether it conflicts with how we see ourselves, will also determine whether a given message can break through the noise of everyday life.

Resources
While "Fishing From a Barrel" is meant to serve as a roadmap for a BT campaign, as well as a strong argument for BT in general, Graham rightly assumes that his readers may not be quite as far along in adopting BT as he would hope. For that reason, Graham concludes his book with a useful "Resource Pack," which contains contact information for various firms offering BT solutions, and better still for the novice reader, brief, easily digested descriptions of what those companies do.

"Fishing From a Barrel" is available from LearningCraft.

Michael Estrin is the associate editor at iMedia Connection. Read full bio.

Getting Ads to the Right Eyeballs (Page 3 of 4)

BEHAVIORAL MARKETING

Published: April 20, 2007

Getting Ads to the Right Eyeballs (Page 3 of 4)

By Michael Estrin

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Five ways to use BT

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As Graham is quick to observe, BT isn't a what, but a how. In "Fishing From a Barrel," he isolates five ways of approaching BT, making clear that a specific marketing goal needs to be set so that the marketer can gauge the campaign's effectiveness.

"By first identifying the specific actions consumers need to take, marketers can create ways to capture and measure data to determine if those goals are being met," Graham writes.

1) Publisher solutions
According to Graham, more than 90 percent of advertisers using BT use some type of publisher-based BT solution. Publisher solutions use identifying characteristics of site visitors, applying those understandings to current visitors in order to serve them relevant ads.

"The main advantage for sites that use behavioral tracking capabilities is that it allows them to be defined within ad networks as a specific audience destination," Graham writes.

2) Ad Network Solutions
Ad networks are a collection of sites representing an expanded range of places where advertisers can run ads. But unlike a single publisher, ad networks offer an added wrinkle to BT, according to Graham.

"Unlike a single site, ad networks can collect consumer data on hundreds of sites and, in some cases, track individual consumers as they travel between sites on the same network," Graham writes.

3) Adware Solutions
Adware solutions are an opt-in way for advertisers to reach consumers directly, usually by giving the consumer some free software or online tools in exchange for their participation. But as Graham points out, advertisers using adware solutions have felt the heat recently from lawsuits seeking to conflate adware with spyware. While a good tool, Graham says he believes only time will tell if it is to be a viable option for BT.

4) Ad Optimization
Ad optimization is considered an offshoot of ad serving. Ad optimization companies typically use intelligent ad serving technologies to interface with a publisher and an ad serving engine.

"The greatest advantage of this process is that targeted consumers can be reached with tier one targeted ads, while visiting pages normally cater to second and third tier inventory," Graham writes.

5) Rich Media Advertising Solutions
To be fair, Graham says he is a "huge fan of rich media solutions," having designed more than 500 rich media ad units in his career.

"To me, the greatest benefit that rich media ads offer advertisers is the ability to help drive the consumer's behavior toward a specific marketing goal," Graham writes.

Campaigns typically involve gathering information such as product preferences, email addresses or ZIP codes. The data is then collected within the ad unit and fed into a back-end database.

The difficulty, according to Graham, is synchronizing the data gathered from an interactive ad with the appropriate web analytics data.

"By tying all the collected campaign data together, it is my expectation that rich media and behavioral targeting will become a juggernaut in the land of online advertising," Graham writes.

Getting Ads to the Right Eyeballs (Page 2 of 4)

BEHAVIORAL MARKETING

Published: April 20, 2007

Getting Ads to the Right Eyeballs (Page 2 of 4)

By Michael Estrin

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Data matters, a lot

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As Graham says, "It all starts with data." Publishers can collect two kinds of data to learn more about their customers. Declared data represents information consumers willingly disclose about themselves, while observed data is information compiled and collected based on how consumers use websites. Once the data is gathered, the challenge, according to Graham, is to make sense of it.

For Graham, the twin-tools of cookies and analytics solutions capable of observing time spent online, and repeat visits and which pages generate the most traffic, are more than just ways to track consumers. As Graham sees it, the online ad experience is a dialogue between consumer and publisher, wherein the publisher (if he is listening) can adjust his business on the fly to meet the needs of a savvy user.

Though Graham points out the use of several BT models, the basic process is quite simple. Publishers create page tags for targeted webpages that are triggered upon a visitor's arrival. The data is then collected and analyzed. Visitors are next grouped according to similar patterns observed while on the site or within the ad network. The groups are then refined into groups of clearly defined audiences. Publishers can then sell advertisers access to highly-targeted audience groups.

While the process may sound basic, for Graham it is revolutionary.

"For the first time in the history of marketing, the ability to reach individuals based on their needs, interests, desires and sudden urges is within reach of advertisers," he writes.

Next: Five ways to use BT

Getting Ads to the Right Eyeballs

Getting Ads to the Right Eyeballs

By Michael Estrin

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"Fishing From a Barrel" author Rob Graham explains how to put the right ads in front of the right people.

In "Fishing From a Barrel" author and professor Rob Graham has one message for his readers: Know your customers.

The book, then, to paraphrase Graham, is an attempt to draw a roadmap that aids online advertisers and publishers in understanding the process of planning behaviorally targeted (BT) ad initiatives.

The target
"To be effective in the new world, advertisers have to stop targeting 'us' and start targeting 'me,'" Graham writes. The beauty of BT, Graham argues, is that it allows publishers and advertisers to learn more about their customers not as group, but as individuals.

Rather, than sifting through mountains of data meant to encapsulate the buying patterns of groups of people, Graham sees BT as a way to look into the minds of a single, potential customer.

"By recognizing and tracking the surfing behaviors of individual site visitors, publishers are able to plot patterns of behavior that identify specific areas of interest, current needs and buying intention," Graham writes.

While it is the publishers who must set up their websites to gather information, much the same way a retail store would instruct a clerk to observe a customer's in-store behavior, it is both advertisers and publishers who gain from BT, according to Graham.

In a hypothetical example featuring "Jerry," a busy consumer in the market for mountain biking vacations, Graham explains how tracking each visit made by the consumer to a relevant website, and subsequently serving ads targeted to where Jerry is in the buying cycle, yields positive results for publishers, advertisers and consumers.

By knowing precisely where Jerry was in the buying cycle, the publisher can sell ads at a premium because they cater to the right buyer. And by putting ads in front of a likely buyer, the advertiser wins because relevant ads are better able to convert. As an added benefit, Graham points out that Jerry will benefit because relevant ads help him save time finding what he wants, thus building a stronger relationship between advertiser and consumer.

Next: Data matters, a lot

Behavioral Targeting Nirvana

3 Steps to Targeting Nirvana

Behavioral targeting can be hit or miss. Here's how to sift through a lot of dirt to find the nuggets of gold.
There's plenty of evidence of behavioral targeting's ability to help build brands and drive direct response, as well as add significant value to publishers' excess inventory. And there are lots of good ideas for distinguishing one form of behavioral targeting from another and knowing when and how to apply each.
What is less well understood is that the typical campaign requires publishers to burn up a lot of inventory in pursuit of an advertiser's elusive targets. To use an eco-unfriendly illustration, it's like killing an elephant for its ivory tusks and throwing away the rest.
Behavioral targeting works best when advertisers have access to an enormous amount of inventory -- more than any single network can deliver efficiently.
Most of us have cookies on our computers that mark us to be targeted as users with certain interests, customer histories and purchase intentions. Point your browser to a site where a network that cookied you also has an inventory relationship, and you may receive a targeted ad. This depends on whether there is a targeted ad available that can be delivered by that network for that category at that time and in that ad size and position.
Those are a lot of variables, and it's no small feat to find them aligned in one place at the right time.
In this article, I'll explain why much of behavioral targeting is hit or miss, describe a better way, and lay out the requirements for achieving your goals.
BT today: hit or missParadise found: targeting without wasteRequirement 1: an open marketplaceRequirement 2: an open technology platformRequirement 3: an open mind

Mobile Social Networking Opens The Door For Advertisers

by Cory Treffiletti, Wednesday, Feb 28, 2007 4:00 PM ET
http://publications.mediapost.com/?fuseaction=Articles.showArticle&art_aid=56293

MOBILE SOCIAL NETWORKING -- I have to admit that this one takes me a little by surprise, but only because I hadn't thought of the implications and the ways that it could be used. It hit me while I was flying this week to Orlando for a series of meetings and catching up on the reading I let pile up while I was busy the previous week. Time magazine, my continued source for the establishment of mainstream thinking, wrote an article concerning mobile social networking and some of the tools being developed to allow customers to keep tabs on their friends using mobile GPS devices and software integrated into their cell phones.
The part of the article that woke me up was the part about the guy who checked in on his roommate, saw that she was at Wendy's, so he called her up and asked her to pick up some 99-cent chicken sandwiches. That single sentence launched a plethora of epiphanies in my head and probably the heads of many other entrepreneurial advertising execs. There was finally a concept that resonated in the mind of the consumer with an obvious marketing extension.
To date mobile has been a category all about promise. There is the impending promise that carriers are seeking out ways to monetize their customer base further -- and with decreasing sales for new handsets, the only options they have are increased data services or advertising. While data services are certainly important, they will undoubtedly become cheaper in the coming years because no one (myself included) wants to spend $200 per month on their cell phone.
Advertising is certainly inevitable in the mobile environment, but it's a pickle to figure out how and where. Users don't like the intrusive nature of push ads displayed on their phones, plus they cost money to receive, which can be a nightmare of consumer backlash. These mobile social networking opportunities finally present something that can be used for marketers to tap into a customer's mindset.
The obvious opportunities are those where consumers can identify some of their favorite brands -- and their phones could alert them whenever they are in proximity to those brands. For example, are you a BMW fan? If so, the phone could alert you whenever you're near the BMW dealer with the new 6-series. Are you a Burger King guy? If you are near a BK, say within ½ a mile, your phone could ping you to let you know! Are you a mom with kids eight to 10 years old? Then your phone could ping you to let you know that there's a Chuck E Cheese just around the corner, and they have a special today!
The slightly more advanced opportunities would be for the phone to become a true "smartphone," where it learns the people you call, keeps track of these people, and applies this information to your GPS map. For example, if you regularly call your friend at 555-1234, then the phone may let you know that your friend is at Safeway or is around the corner from you. If you typically call the doctor because you're a hypochondriac, then maybe the phone will alert you the fact that Safeway is having a sale on vitamins. Of course, you would have to initiate these types of services, unless the carrier just decided these would become standard with your service, for a reduced monthly charge, of course.
For these ideas to truly become commonplace, the next generation of phones will still need to step up. The interface still needs to improve and the delivery speeds for data services will still need to accelerate. That will happen, certainly by next year, and possibly by June when the Apple iPhone finally comes out -- provided it's not nearly as buggy as some people are saying.

The Multicultural Message: Two Industry Players Assert the Marketing Needs of the Hip-Hop Generation and Beyond

Written on
January 22nd 2007
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by Regine Zamor
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With the rise of the digital era and the growth of interactive usage and advertising, it’s become increasingly important to understand audiences. Making up 13% of the population is the multicultural audience, which subsequently, has not received attention commensurate to the “astronomical growth” it’s experienced.
Upon speaking with consultant Erin Patton with the Mastermind Group, and Publisher of AOL Black Voices Alvin Bowles, and taking a closer look into the interactive realm of multicultural advertising, it is clear that as this audience grows, advertisers and agencies need to do more to acknowledge that this demographic is here and that their dollar is important. Although this demographic was a bit sluggish in the wake of online participation, there has been consistent growth. Even in 2005, African Americans had an online user base of 18.4 million and in 2006 African American and Hispanic internet usage was nearly equal to that of the general market. Considering such growth, it’s time for the industries ad spending dollars to finally make a match. Welcome to the age of multicultural marketing.
So, it’s no secret that online usage and the advertising that comes with it are on the rise. What this means for agencies and marketing professionals, however, is that the way multicultural audiences are factored into ad budgets may also have to change. Alvin Bowles heads all of the sales efforts at AOL Black Voices and has seen the rising trend of the multicultural audience. According to the December 2006 comScore Media Metrix report, just last year when Bowles joined AOL Black Voices, the website brought over a million visitors a month, while today, the African-American hub accounts for 3 million users per month.
“There’s tons of growth. In a sense, there’s astronomical growth within the multicultural audience online,” states Bowles. Accordingly, Erin Patton of the MasterMind group concurs that not only is there growth, but “hip-hop’s generation X has matured and evolved the influence that was once willed through traditional categories and it has now broadened.”
Furthermore, through his research, Patton has found that the “growing influence of multicultural consumers in the general market…at this point is clearly becoming the new general market for this generation, which is growing up without the racial parameters or boundaries.” Part of the lack of online acknowledgement may be attributed to the approach advertisers take when it comes to reaching this target. Most advertisers are still under the misconception that traditional media is the best way to reach the African-American community. Not suggesting that traditional media be decreased, Bowles calls it “not an either but an and conversation”—a conversation that agencies and executives and consultants need to begin having in order to achieve the brand loyalty that comes along with the multicultural market.
And with the multicultural market also comes a certain type of brand loyalty that is known, but Patton warns that brands may be taking this loyalty for granted, assuming that the dollars will just flow in. “It is a loyal audience, but it’s also one that places a high degree of importance and significance on brands that communicate to them through cultural and lifestyle nuances,” Patton affirms.
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