Behavioral Segmentation Improves Advertising Campaign Performance.

Advertising.com, Inc., a provider of results-based interactive marketing services to advertisers and publishers, released new findings from its Optigence research platform that demonstrate the effectiveness of behavioral targeting for interactive marketing. The findings reveal that targeting campaign delivery based on real-time user behavior increases advertisers’ ROI by reaching the audience segments most likely to respond to an ad message.

In the June 2004 Optigence study, Advertising.com employed its LeadBack behavioral segmentation technology to show that targeting consumers based on their real-time online behavior has a greater impact on campaign performance than reaching users based on pre-determined profiles. The LeadBack technology anonymously identifies user behavior on an advertiser’s website and uses that information to serve customized ads to these users as they visit other sites across Advertising.com’s network, which was identified by comScore Media Metrix as the largest in the U.S. in June 2004. Advertising.com expects to apply the LeadBack technology across its European network later this year.

Advertising.com analyzed over 500 million impressions served for three unique advertisers. Each campaign was analyzed for a two-week period of time. Results of the studies showed that by targeting campaign delivery based on anonymous user behavior, click-through rates (CTR), conversion rates, and effective cost-per-thousand (CPM) rates all increased significantly.

“The logic behind behavioral targeting gets to the heart of the Internet’s potential as an advertising medium,” says David Hallerman, senior analyst at eMarketer, a New York-based research company. “I’m not surprised by Advertising.com’s results – in today’s world of audience fragmentation, it’s much more effective to reach individuals not by abstract demographics but through their actions online.”

Findings

Advertising.com’s LeadBack technology was employed to target ad delivery for the three advertisers studied. More than 360 million impressions were served for Advertiser A between June 1 and June 14, 2004. Advertiser A used LeadBack to drive users who had visited the registration website – but did not complete the registration form – back to the website to complete the form. As a result, impressions served by the LeadBack technology achieved a 192 percent improvement in CTR compared with non-targeted impressions. Additionally, behavioral targeting improved conversion rates by 167 percent, and effective CPM rate by 167 percent, compared with non-targeted impressions. Similar creatives were employed for both targeted and non-targeted impressions.

Approximately 21 million impressions were served for Advertiser B between July 28 and August 10, 2004. The goal for Advertiser B was to generate sales. By targeting users who had abandoned the advertiser’s landing page prior to making a purchase, LeadBack generated a 94 percent improvement in CTR versus non-targeted impressions. Likewise, conversion rates for behaviorally targeted impressions improved 2,232 percent over run-of-network impressions, and the advertiser realized an average effective CPM rate improvement of 522 percent.

Finally, approximately 140 million impressions were served for Advertiser C from July 27 through August 8, 2004. The goal of this campaign was to acquire new customers. LeadBack generated a CTR improvement of approximately 225 percent, as well as an increase of 3,130 percent in conversion rate and 2,978 percent in effective CPM rate, as compared to non-targeted impressions.

Scott Ferber, chief executive officer of Advertising.com said, “Today, marketers expect full accountability for their advertising dollars. The combination of Advertising.com’s extensive reach and proprietary LeadBack behavioral targeting technology offers online marketers substantial value – not only by improving overall campaign performance – but by delivering a superior return on investment as well.”