Targeting to become dominant Online Marketing Tool.

Consumers must know that most supermarkets and retail stores not only have cameras to keep people from stealing merchandise, but monitor their traffic movement through aisles, too.

As a reporter in the mid-2000s, I visited IBM in upstate New York and got a sneak peek at some applications and platforms the research and development team were working on. The camera tracking software gave stores the ability to determine traffic patterns, providing insight into how people shop. That’s part of the way Wal-Mart Stores, Target and others know the exact location on the shelf where Arm & Hammer baking soda or All detergent sells best.

Knowing this technology exists in retail stores, I’m confused as to why people can’t comprehend that online behavioral targeting will become a routine tactic within four years, if not sooner, despite the movement by those who oppose the practice, including groups asking the Food and Drug Administration (FDA) to protect the health of U.S. consumers by conducting an investigation into the use of digital marketing technologies, such as behavioral targeting, social media marketing, online video and mobile.
The Internet continues to become the medium through which we read, learn and interact, though last week at the IAB conference, President and Chief Executive Officer Randall Rothenberg told attendees only 8% of advertising dollars are spent online.

Social networks like Facebook mine member profiles, and Yahoo Mail and Google Gmail tap into subscriber email accounts to build audience segments used to target ads.

About one week after researching a few companies to confirm statistics for a MediaPost article, I received an email from Demandbase. The subject heading read: “Someone from MediaPost visited the Demandbase website this week.” The body of the email went on to describe my recent visit to the Demandbase Web site. “We hope you found the information you were looking for, as there are several B2B lead generation tracks you may have been interested in.”

The email also included a sample Weekly Marketing Insight report to help me uncover the online perspective I should follow up on immediately. Someone tell me this is not targeting my behavior.

Targeting consumer behavior will drive all online advertising. Semantic technology also will support the targeting. It’s not what I want, but I believe it will happen. But the industry still has work to do.

The industry needs to solve the problem of finding a way to scale the so-called promise of one-to-one marketing that the Web offers, according to Jeff Hirsch, CEO of AudienceScience. “Eight years ago geotargeting was unique and people wondered if they should do it,” he says. “Now every campaign is geotargeted, because why would you want to reach someone with a local ad if they’re not in your area?”

AudienceScience recently announced the results of a commissioned study from Forrester on the current state of audience targeting. The overall findings indicate audience targeting growth is rising as familiarity with and confidence in the discipline increases. Also, there’s been a positive shift in marketers’ understanding of the impact of audience targeting on direct response and branding.

In fact, 77% of marketers already use or plan to include audience targeting in 2010. This finding coincides with another recent Forrester report projecting overall spending on display advertising to double from $8.4 billion in 2010 to close to $17 billion in 2014.

The majority of marketers surveyed in the first study spend on average 23% of their digital marketing budgets on display media. Here display media was defined as all interactive advertising in the form of non-search text links, static and rich media ad units, sponsorships and video-based ads.

Marketers spending more than 10% of their display media budget on audience targeting responded that they believe audience-targeted display advertising is as effective at meeting branding objectives as it is for meeting direct-response objectives.
AudienceScience points to this as a significant finding because it highlights display advertising as an effective branding tool regardless of ad click-through metrics.

When I asked Hirsch about technologies required to reach nirvana, he says targeting requires multiple layers of technology, data, partnerships with publishers and advertisers, and services to help marketers understand how to take advantage of the complete solution. Then companies need a way to define the audience and deliver the ads.

by Laurie Sullivan
Laurie Sullivan is a writer and editor for MediaPost.
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