The Aim of Behavioral Targeting

Why isn’t behavioral targeting a hit with advertisers?

"The growth of behaviorally targeted online advertising has been delayed by incomplete development of technology, brand marketers that prefer to have their ads appear with relevant content and concerns over violating consumer privacy," says David Hallerman, senior analyst at eMarketer and author of the new report, Behavioral Targeting: Marketing Trends. "But a number of things are changing."

In fact, eMarketer projects that behaviorally targeted ad spending will reach $4.4 billion by the end of 2012.

Behavioral targeting segments the audience based on observed and measured data, such as the pages or sites users visit, content viewed, search queries entered, ads clicked, information share on social networks and products placed in online shopping carts. This data is combined with the time, length and frequency of visits.

"Recency counts a lot, too," says Mr. Hallerman, "data from two weeks ago is far less accurate at predicting interest than that from two days ago."

Behavioral targeting is getting increasing attention from advertisers, publishers, the public, politicians and mainstream media. For now, though, it contributes little to total US Internet ad spending—only 3% for 2008.

"When pegged against the display online ad formats that are typically used for behavioral targeting, however," says Mr. Hallerman, "the importance of behavioral targeting to non-search advertising growth becomes clearer."

Nearly one in 10 content-site ad dollars will flow from behaviorally targeted advertising in 2008. That will rise to roughly one in four by the end of 2012.

"It is unclear how much display ad spending will increase behaviorally targeted ad spending, in contrast to how much behavioral targeting capabilities will increase display ad spending," says Mr. Hallerman.

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