Marketers ought to be aware that some consumers are suspicious about the phenomenon known as "behavioral targeting," a new report from eMarketer says.
Called "Behavioral Targeting Attitudes: The Privacy Issue," the report released Friday explores the digital ad strategy, which collects consumer information and uses it to serve up ads that they may find interesting or relevant. This has been the basis for high-profile programs like Facebook's Social Ads and MySpace's HyperTargeting, as well as Google's extraordinarily successful AdSense. (That's why you'll see ads for vacation homes in Gmail after you've been e-mailing back and forth with your friends about wanting a weekend getaway.)
The takeaway point from the report: "Consumers want ads that are relevant to their needs, but they have mixed feelings about how that relevancy should be determined."
eMarketer cited a TrustE study which found that 70.5 percent of Internet users polled seemed to be decently aware that their browsing activity could be tracked by third parties for advertising. But only about 23 percent of them said that they were OK with having their behavior monitored, even if they were assured that the data would not be shared and no personal information would be divulged.
Targeted advertising is an extremely sensitive subject, with privacy advocates on both the left and right ends of the political spectrum voicing concerns. Internet service providers have been criticized for behavioral-targeting campaigns, questions of legality continue to arise, and top executives at tech companies have been brought into the debate.
The study suggested that advertisers should ensure that consumers are educated on the fine print of behavioral targeting, and that they're offered an opt-in choice. "One way to ensure that consumers welcome rather than reject behaviorally targeted ads is to ask them to give their consent to receive them," a release about the report wrote. "Tell them about the real benefits of saying yes, including more-relevant advertising." That's what the Internet Advertising Bureau has recommended, too.
But perhaps a more serious issue for the ad industry is accuracy. The TrustE numbers cited by eMarketer said that only 12.6 percent of respondents said that more than a quarter of the targeted ads they were delivered were relevant. Ouch.
InterActiveCorp mogul Barry Diller may be getting rid of brands like Ticketmaster, LendingTree, and HSN, but he still wants to sell ads on them.
The sprawling media company announced Monday that it will launch an ad network to handle inventory across all its brands, such as Evite and Citysearch, as well as the ones that Diller and his executive team are opting to spin off into separate publicly traded companies.
"Maybe we're not brothers and sisters, but we're cousins," IAC Advertising Solutions president Rich Stalzer told AdAge about the companies it will spin off. The AdAge article also reported that IAC currently serves only a small percentage of its own ad inventory, outsourcing the rest.
IAC's new ad strategy focuses on targeting consumers in nine "cubes": youth (18 to 34 years old), men, women, "affluents," parents, active shoppers, active travelers, homeowners, and sports fans. More cubes are on the way. But of particular priority to IAC is the "affluents" niche, which can draw in far higher click-through rates because of those consumers' likelihood to spend larger amounts of money.
For once, IAC's arguably scattershot and unfocused array of retail and media brands could be helping it move forward.
That's because there are many ways that IAC could identify Web users as "affluents" (or anything else, for that matter) through the sheer variety of properties the conglomerate owns, as well as the ones that it is spinning off.
"We're in a unique position in that we can corroborate multiple kinds of data," Stalzer explained in a release, "including declared information users offer about themselves; transactional, online purchasing activity; and inferred, such as what they do offline like attend concerts or go on dates, from the diverse portfolio of IAC sites to more precisely identify users as part of a particular audience segment."
Someone who makes pricey purchases at the company's Gifts.com, for example, or who repeatedly queries Citysearch for restaurants of the Jean-Georges and Nobu variety, could be classified under the high-income "cube."
And Diller, well known as a yacht aficionado, is even more deeply connected to the luxury-brand market than your average CEO: He's married to fashion legend Diane von Furstenberg.
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