Tacoda ties ads to surfing behavior

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A new type of online advertising network makes its debut today, one that will give marketers a way to achieve broad reach and at the same time narrowly target the customers looking to buy their products.

Developed by 3-year-old Tacoda Systems, AudienceMatch Network comprises 60 publishers that will serve behavioral targeting ads to their users. The potential is exciting to marketers, who until now could only reach consumers with behavior-based ads through pop-up services such as Claria and WhenU or through the portals such as Yahoo. But it's a real boon for agencies and media buyers who formerly had to purchase behavioral-targeting inventory on publishers' sites by calling on sites one by one.

"Media buyers used to get killed," said Jordan Rohan, independent Internet industry analyst. "You buy the portals and then what are you supposed to do? Marketers don't really want to approach 300 different sites for ad buys."

Admittedly, kinks have yet to be worked out and many more publishers will have to sign up for the network to achieve the broad reach needed to be effective, but media buyers say they can hardly wait to begin testing AudienceMatch. "This is definitely a great step in the right direction," said Patrick Benson, VP-interactive associate media director, Deutsch.

technology that remembers

Behavioral targeting is a technology that recognizes when Web-site visitors are seeking a particular product or service and then serves an ad relevant to their search-at a later date-on another, unrelated page. For example, a Web surfer could be looking at real-estate listings on their daily newspaper site on Monday, then on Thursday while reading the sports section, would be served an ad from a real-estate agent.

"The basic premise is that a person's previous surfing pattern can be a very strong indicator for their receptivity for certain ads," said Dave Morgan, CEO, Tacoda. Also, the publisher can collect personal and demographic data from users and apply that to the targeting of leads. Customer data used through AudienceMatch is anonymous and cannot be seen by anyone other than the publisher that owns it, Mr. Morgan said.

Up until now, Tacoda could only serve ads to that real-estate shopper on that particular daily newspaper site. With the network, the realtor's ad can run according to the viewer's behavior, across a network of sites.

Adriaan Bouten, VP-technology and business development at USAToday.com, a site that's used behavioral targeting for two years and has been testing AudienceMatch, is sold on the idea: "The value to our advertisers of behavioral targeting has gone up since we've been using it."

Tacoda's main competitor, Revenue Science, is weighing whether it should start a behavioral- targeting network.

The AudienceMatch ads-all of which are text-run at the bottom or side of Web pages. Some 45 million Internet users (about 30% of the online audience) will be reached each month through the publishers signed on at launch, according to Mr. Morgan. Publishers are mainly niche-oriented lifestyle and news sites, drawn from Tacoda's slate of 2,700 regular clients. Some 50 advertisers, which Tacoda sold to directly, are on tap, too. Pricing is on a pay-per-performance basis, with revenue split three ways among Tacoda, the site on which the ad appears and the site which the user had originally visited.

AudienceMatch is not a branding technique, media pros warn. It works best for direct marketers in sectors such as travel and personal finance.

Another downside is that targeting based on behavior does not necessarily deliver to the same demographic, so ads may not be as ideally targeted as an advertiser wants. "A person who looks at autos on NYTimes.com is not the same person who looks at autos on the Dallas Morning News site," said Charlene Li, principal analyst for media and marketing, Forrester Research.

Still, the network's payment model removes much of the risk for media buyers. "Performance-based [payment] has a leg up because you're only paying for what you get," said Stuart Bogaty, managing director of Ogilvy & Mather's media-buying unit, mOne.

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