New Study Finds Advantage in Tracking Online Behavior

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NEW YORK ( -– A new study -- albeit one backed by a company whose business is to target consumers based on their Web-browsing behavior -- has found that targeted ads are more effective than contextual Web ads, such as car ads placed on car sites.
“These results don’t show that you shouldn’t use contextual. You have to combine frequency-capped contextual targeting with high-frequency behavioral targeting,” says Dave Morgan, CEO, Tacoda.

While it’s not surprising the study, conducted by Next Century Media, an interactive TV and online ad research firm, would come out in favor of its backer’s main business, the results were nonetheless impressive in how strongly they favor behavioral-targeted ads.

Repeated viewings
Consumers noticed 17% more ads targeted at them based on their Web-surfing habits than other Web ads. In addition, the more behavioral ads are shown to the consumer, the more attention that viewer pays to them. After the first exposure, the 17% advantage increases to 54%.

The study, sponsored by behavioral-targeting firm Tacoda, contradicts the widely held belief that when an ad is seen on a Web site that has content that refers to products being advertised the response will be better.

Contextual advertising is when a car ad is displayed to a person viewing a car site. Behavioral targeting is an ad-targeting system that tracks a consumer’s behavior as they surf the Web to determine his or her interests, then serves ads pertaining to those interests wherever that person goes across a behavioral-targeting network. For instance, when someone visits at an auto site, the ad-targeting network notes that behavior and then might serve a car ad as that person moves on to a news site or a parenting site. Behavioral targeting ads have typically been placed on remnant media, and only about 5% of online advertising is spent on this technique.

Viewer's curiosity
Bill Harvey, president of Next Century Media, said that because the viewer on the car site knows that all the ads he sees are going to be auto ads, “the curiosity is dimmed -- too many ads for the same product are going to be screened out.” Behavioral ads are noticed because “surprise helps break through this screening-out process” as ads for new vehicles appear in Web sites of varying contexts, he said.

Omar Tawakol, senior VP-behavioral marketplace, Revenue Science, a competitor of Tacoda, said his firm had seen behavioral ads beat contextual ads in certain campaigns. He had not seen the current study, but said that “whether you get the consumer’s attention or not is going to depend on how good the behavior is that you’re using. If the goal is direct marketing, for instance, we’ve seen behavior that’s tied to commercial intent that’s vastly outperformed contextual advertising.”

The study was conducted independently by Next Century Media using the research services of eye-tracking company PreTesting Co. Study subjects were 50 adults between the ages of 18 and 64 who were in the market for plasma TVs, new cars and computers. They were each shown four contextual ads and four in a behavioral context. Mr. Harvey added to these findings a number of case studies made public by ad firms that do behavioral targeting --, 24/7 and Yahoo, as well as Tacoda and Revenue Science.

“These results don’t show that you shouldn’t use contextual,” said Dave Morgan, CEO, Tacoda. “You have to combine frequency-capped contextual targeting with high-frequency behavioral targeting.”

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