Facing crunch, sites zero in on targeted ads

By Published on .

Cars.com has an inventory problem. And behavioral-targeting company Tacoda is offering a solution.

The Internet ad boom is creating a scarcity of media in prime locations, with media buyers booking online inventory up to a year in advance. Yahoo, for instance, reported a 44% rise in ad revenue in the first half of 2005 compared with the same period in 2004. That leaves sites like Cars.com, which features research resources for consumers in the market to buy a car, desperately looking to expand inventory-or lose out.

"There are millions of dollars left sitting on the table" after prime inventory sells out, said Kevin Considine, VP-national sales at Classified Ventures, of which Cars.com is a unit and which is owned by Belo, Gannett Co., Knight Ridder, The McClatchy Co., Tribune Co. and The Washington Post Co.

The answer as Tacoda sees it is behavioral targeting, an online ad-targeting system that tracks a consumer's behavior on a Web site to determine his or her interests, then serves ads to that person, wherever they go on that site, relevant to their interests. The problem has been that consumers often leave the original site and travel elsewhere on the Net. But now Tacoda, and other behavioral-targeting companies, are forming networks to follow consumers to those new sites with targeted ads.

Part of the mix

Marketers have increasingly adopted the ad technique as part of their repertoire in the last year. In fact, in response to a recent Forrester Research survey that asked "What do you believe will have the greatest positive effect on online advertising?" about half of online advertisers surveyed answered, "Behavioral targeting."

New York-based Tacoda started an ad network with text-based ads last fall, but soon shuttered it, realizing it needed to retool to offer graphical, rich-media ads, said Curt Viebranz, president-chief operating officer of Tacoda. Its revamped Audience Networks opened its doors Sept. 26, joining four other online marketing companies, Advertising.com, Revenue Science, 24/7 Real Media and Yahoo, offering behavioral-targeting networks.

Tacoda's network comprises 57 publishers, representing 3.3 billion page views each month, Mr. Viebranz said. Publishers include sites run by ABC News, Associated Press, Media General, Media News Group and MediaSpan. Audience Networks reaches about 45% of the U.S. Internet audience, "which is a number probably close to 90 million," he said. Advertisers include TGIFridays, Cingular, U.S. Airways, Delta Air Lines and Allstate.

Once Web-site publishers sell off their prime media, the run-of-site inventory lies fallow even as advertisers clamor for more ad space. They don't want just any old inventory, of course; they want areas that are either highly trafficked like home pages or well-targeted sections.

"Behavioral targeting is an incredibly positive move for media companies to get value out of areas that wouldn't necessarily have value," said Jeff Marshall, senior VP-managing director, Starcom IP. "If a large publisher who maybe is selling only 50% of their inventory can employ some kind of behavioral targeting, they can sell that inventory. "

Classified Ventures' Mr. Considine said, "Most auto sites are already sold out. But now with the network, I have inventory to sell."

Follow the reader

Here's the way the targeting technique works: If a visitor on Cars.com is researching, say, an Infiniti M45, Tacoda attaches a cookie representing that consumer with the information that they are shopping for a car. (The cookie data do not include personal information about consumers.) Continuing online browsing, the car shopper may click to his or her local-newspaper site, or the pages of SportingNews.com, where Tacoda can serve an ad for Allstate auto insurance. "We can infer things about the user based on where they go, and when they leave a site and go somewhere else, we can serve them an ad based on their previous behavior," Mr. Viebranz said.

Data are added each day and ads are not served for data older than 30 days, he said. Because the data are refreshed so often, cookie-cutting technology isn't a danger, he added. "If someone cleans their cookies [out of their PC] once a month, it doesn't have that major an impact."

Reaching a large enough base audience is still an issue, though, cautioned Mr. Marshall. And there is a question whether Tacoda's network on its own or in combination with others provides enough scale to carve out well-targeted customer segments. Moreover, the technique is too new to know for sure how well it works. "We are finding ways to extract value from behavioral targeting," he said. "But we don't have enough learnings to know how much of a lift behavioral targeting offers."

In this article:
Most Popular