Google Turns to Behavioral Targeting to Beef up Display Biz

Beta Tests Two Ad Offerings Amid Pressure to Grow Revenue

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NEW YORK ( -- Google's fledgling display-ad network is hoping a pair of new targeting options will bolster its value to advertisers and publishers.

The company today announced it will launch a beta test of "interest-based targeting," which lets advertisers target web users based on where they've been surfing across the internet. If a user is reading sports articles on and also visiting, for example, it could get lumped into a sports audience bucket, which advertisers can target.

Google will also let advertisers "re-market" web users across its content network, so if a person visits an advertiser's site or abandons some products in an online shopping cart, that advertiser can find that consumer again on the web and serve him or her ads. In its beta version the targeting measures will be sold through Google's direct-sales team, with a select group of advertisers taking part; later it will be available in the self-serve AdSense auction marketplace. The targeted ads, which can be either text or display, will run on AdSense partner sites and

Helping publishes' revenue streams
"A lot of the internet is largely ad-supported and there's a lot of content that's provided for free because of the ad model," said Brad Bender, who heads up product management for display on Google's content network. The moves, he explained, are meant to help publishers earn more ad revenue. "We're getting a step closer to better online ads."

Of course, it's not quite that easy. Most major creators of original online content -- the CNN.coms or NYTimes.coms of the world -- are largely subsidized by the offline ads they sell. Online advertising simply has not generated enough revenue to pay for the existing news-gathering and original-content operations, even though many networks and ad sellers already offer sophisticated targeting services similar to the ones Google is introducing, more commonly called behavioral targeting and retargeting, respectively.

Still, Google's moves could be particularly beneficial to the smaller sites that don't have their own sales forces and rely only on Google to sell their advertising. Google's network reaches 78% of U.S. internet users, according to ComScore. One caveat in those numbers: AdSense includes both text and display ads so it's unclear how much reach Google's display ads command vs. the combination of display and text ads.

The move also comes as the recession is affecting the online ad space, weakening even the search space, Google's bread and butter. Google has been under particular pressure to sell ads on YouTube, so it's no surprise the targeting applies to that site.

Integrating DoubleClick technologies
It's also the first big sign Google is integrating into its large AdSense network some of the technologies it picked up with its acquisition of DoubleClick. In December 2008 Google added DoubleClick cookies to AdSense ads, which was the turning point for being able to behaviorally target on Google. Cookies, a little piece of code that gets picked up and stored by a user's browser, are how sellers and publishers collect information about where people have been on the web.

One feature meant to address privacy concerns allows web users to edit and delete their interest categories on an "ads preferences manager" page. They can access the page by clicking on the "Ads by Google" notation that accompanies many Google ads across the web.

"Most users just prefer to see more relevant advertising over less relevant advertising," Mr. Bender said. He gives the example of how someone planning trip but not actively browsing the web for information could add travel as an interest. "Or if you've been shopping recently for your nephew and you don't think that accurately reflects what you're interested in, you can remove yourself from that."

Incidentally, the move sounds very similar to something Jupiter analyst Emily Riley suggested at a recent forum on behavior targeting.

"Imagine Gen Y knowing that there's a place they can go online to manage all their wants," Ms. Riley said. "To say to somebody 'You know what? I'm actually in the market for a car, send me your best offer, compete for me. And not only that but use my search behavior, use my behavior on my Facebook page to give me a more relevant offer than if you didn't use those behaviors. ... Gen Y is going to expect us to know everything about them?"

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