Behavioral targeting, the practice of segmenting audiences by their online habits, has proven to be an effective means of advertising.
For example, a study conducted by Dynamic Logic on FT.com, the Financial Times’ Web site, showed that a behavioral-targeted ad campaign by NTT DoCoMo performed from 41% to 193% better in a series of branding metrics than run-of-the-site campaigns.
Now Revenue Science, which offers behavioral-targeting applications, has taken the proof of the practice’s effectiveness a step further.
Last month, Revenue Science unveiled the first results of its Audience Quality Certification program, which was started last October and is conducted in partnership with Nielsen//NetRatings. The goal of the program is to provide "industry-standard metrics" for advertising agency media buyers and potential advertisers to evaluate the quality of a particular Web site’s behavioral-targeted audiences.
The program compares the performance of behavioral-targeted segments on specific Web sites against the activity of the several hundred thousand individuals on the Nielsen//NetRatings MegaPanel.
Many in the industry applauded the move to provide a standard for behavioral-targeted segments. "I think it absolutely has value," said Denise Garcia, VP-research
director at Gartner’s media and advertising practice. "Of course, the people at The Wall Street Journal and everywhere else will tell you that the audience is everyone you want, but you do need a third party to verify that audience."
Gary Stein, an analyst with Jupitermedia Corp., said: "It’s not the sexiest thing, but there has always been this nagging doubt about behavior targeting that buyers don’t know enough about the quality of the audience, so the Audience Quality Certification is a good plan because it seeks to solve that problem." Stein praised the use of Nielsen//NetRatings as a third party for the program.
The first site to unveil its scores under the Audience Quality Certification program was Dow Jones & Co.’s Wall Street Journal Online. The results showed, for instance, that the Online Journal’s "engaged investor" audience segment was 240% more likely to be interested in online trading sites than the average online user.
Additionally, Revenue Science’s analysis indicated this audience segment was:
100% more interested in both hotel and airline sites than the average online user.
75% more likely to visit auto sites than the average online user.
100% more interested in computer and consumer electronics news sites than the average online user.
The segments determined by online behavior, of course, go well beyond the "engaged investor" niche, and many of these segments can have large implications for b-to-b marketers. "The at-work audience is very important for b-to-b marketers," said Nick Johnson, Revenue Science’s senior VP-business development. "It’s very important for them to reach people in a work mind-set."
Randy Kilgore, senior VP-advertising at Dow Jones Online, said in a statement: "The ability for me to say [to a potential advertiser] that a particular segment of the Online Journal’s audience identified because of its behavior is four times [more] interested in your category than the average Web user—according to Nielsen//NetRatings—is a huge positive that makes the sale easier on both sides."
Revenue Science said its Audience Quality Certification is fully automated and provides updated metrics to publishers on a monthly basis.
A number of other Revenue Science customers are using the program. Dow Jones, for instance, uses the service not only for Wall Street Journal Online but also for its MarketWatch.com site. There are limitations, however, to the Audience Quality Certification program. For instance, a media site must be a Revenue Science customer to participate, which curbs its usefulness to media buyers and potential advertisers.
Dave Morgan, CEO of Tacoda Systems, Revenue Science’s chief competitor in the behavioral-targeted sector, said the Audience Quality Certification program made sense, up to a point. "I think it’s great if we can find a way to create a standard and make that standard more easily understood and more comparable to other media," he said.
Morgan, however, questioned whether the panel was big enough to provide adequate data. He also questioned its ultimate value, pointing out that few people would be surprised that investors visiting wsj.com are more likely to be interested in financial sites.
Some observers said that for the Online Journal, the certification program is especially important, because audience quality—approximately 700,000 Online Journal users pay a subscription fee to access the site—is its unique selling proposition, as opposed to the quantity of audience pitched by other business and financial sites.
The ultimate goal, observers said, of the Audience Quality Certification program is to use it to promote the quality of an audience and thus get a premium price from media buyers.
"Will advertisers and their agencies pay for it? That is the question," said Tolman Geffs, managing director at media investment bank Jordan, Edmiston Group. "The jury is still out."
Gartner’s Garcia believes strong audience segments, validated by the Audience Quality Certification program, deserve premium ad rates. "People will pay for quality—if they sell it right," she said.