Need for Scale Will Drive Behavioral-Targeting Networks

Tacoda Chief Touts Influx of Branded Ad Dollars

By Published on .

NEW YORK ( -- Betting that the need for scale is the key link in its behavioral-targeting growth this year, Tacoda is busy signing up publishers to its network. Most recently Dow Jones and USA Today have joined Tacoda, which targets users behaviorally across its network of sites.
Though 'USA Today' has joined Tacoda's network, parent company Gannett uses Revenue Science on its local newspaper sites.
Though 'USA Today' has joined Tacoda's network, parent company Gannett uses Revenue Science on its local newspaper sites.

Dow Jones switched to Tacoda from Revenue Science's local behavioral-targeting technology. Revenue Science provides publishers the technology to target users based on their behavior within a publisher's own site; Tacoda contracts with a network of publishers and can glean deeper data on its users, because that data is based on their behavior across the network, not on a single site. The trade-off, according to publishers and advertisers, is the flexibility and independence of Revenue Science's approach.

Revenue Science
When Dow Jones first decided to go into behavioral targeting in 2003, it signed with Revenue Science because it was easier to jump into, more "play as you go" with less upfront costs, said Brian Quinn, VP-ad sales and marketing at Dow Jones Online. But it turned out the salespeople had too much flexibility and the segments marketers could buy became too granular.

"We had about 200 different audience segments," said Mr. Quinn. "And it's already a vertical decision to advertise with the [Wall Street] Journal."

With Tacoda, Dow Jones has less than 30 segments but they're generally stronger, Mr. Quinn said. For example, Dow Jones could previously tell prospective car buyers only because they might have read the auto section on Now, because Tacoda culls behavior data from sites across its network, Dow Jones can target a car buyer on knowing that previously that person was surfing "We're not as broad but much deeper," said Mr. Quinn, who estimates behavioral targeting composes between 20% and 25% of Dow Jones' total online ad business.

Today, said Dave Morgan, chairman of Tacoda, many of the new-to-web dollars are coming from brand marketers, yet there's a scarcity of valuable contextual inventory on the web. That means there needs to be more people-targeted advertising online and better use of the non-premium inventory that may not have a natural commercial context.

Like buying TV
"2005 and 2006 were about experimentation in behavioral targeting, but 2007 is about scale," he said. "The marketers need scale." Plus, he noted, buying behaviorally is much more similar to buying TV, where the ads aren't meant to be contextual but instead to target a certain type of audience.

Gannett is placing its bets on both companies' approaches. Though USA Today has joined Tacoda's network, parent company Gannett uses Revenue Science on its local newspaper sites. The company has used behavioral targeting for about four years, said Lorraine Ross, VP-sales at

"[Tacoda] brings to the table a larger network [where] user data is aggregated across the sites that participate," she said. But, she noted, Revenue Science has some other features and if you want to implement behavioral targeting on your own, Revenue Science is what you have to do.

Moving beyond purchase intent
Ms. Ross believes 2007 is the year marketers will being to use behavioral targeting for more brand marketing or persuasion, rather than simply trying to hit customers that exhibit some purchase intent. She points to the interactive and social media features sites are quickly adding, saying that those will help marketers learn more about the users and potentially identify the leaders in their target audience. "I think there's going to be a lot more information about readers available," she said.

In April, eMarketer projected behavioral targeting would be a $1.2 billion business in 2006 and a $1.5 billion one in 2007. Mr. Morgan suggests that estimate might be high but said he expects his business to grow between 200% and 300% this year.
Most Popular
In this article: