iMedia Summit in London

Well, to be honest with you, the iMedia Agency Summit did not really take place in Central London but rather St. Albans, pretty much on the outskirts of London in a very nice and very British countryside (with a golf course in the neighbourhood). Frank, Jesh and myself had a lovely stroll (in the mud;-) enjoying the fresh air (of sheep and liquid manure;-).

The event itself Read the rest of this entry »

What was, what is now and what is to come in Behavioral Targeting

The year is drawing to its end – traditionally the time for retrospectives and previews of what lies ahead. The media are full of these. Yet behavioral targeting, our specialty, is a bit underrepresented. Which is why I’m going to offer my own entirely personal review for 2007, including some thoughts on what awaits us in 2008.

What was

Already a year ago it was only very occasionally necessary to explain the entire concept of behavioral targeting in its entire breadth. Target groups rather than environments – marketers and agencies were quick to pick up on the model even then. At least in theory. Because, unlike today, we often heard arguments like:“We have high-quality content. Targeting is more like something for portals or for marketing unsold capacity”“Behavioral Targeting is a trend; it’ll pass”“Agencies don’t ask for behavioral targeting”“Nobody understands predictive behavioral targeting; it’s all far too complicated”I don’t think these statements require any further comment now, but those were the objections that were being raised just a year ago. And I had to fight my blasted way through them all too often!

What is now

A lot has changed in a year. Behavioral targeting and also nugg.ad’s own new twist, predictive behavioral targeting, no longer fall into the category of “maybe next year” but are already being put to work here and now. There are almost no marketers, almost no agencies or even advertisers left who think the issue is not important. Behavioral targeting is revolutionizing the advertising market by ending decades of industrial mass marketing and the inescapable monotony of the ad blocks, and placing the focus back on the consumer. “Advertising for people instead of pages” – that quite rightly sounds like a battle cry. Behavioral targeting is nothing less then a fundamental and permanent paradigm change for the advertising business.

What is to come

I am firmly convinced that the trend toward advertising based on targeting technology will continue and even accelerate in 2008. My theories on what awaits us:

1) Behavioral targeting will emerge from its niche. Agencies and advertisers will take up the opportunity to control campaigns on the basis of profiles as the primary selection criteria more and more often when making a choice between marketers and advertising media. Targeting push will morph into targeting pull.

2) Behavioral targeting and its continuing improvement (see the next two points for more on this) will bring about a push in growth for display advertising. In the long run, display advertising is going to become significantly more successful than keyword marketing ever was. Unlikely as it seems given Google’s rapid development, the evidence is there to see: Google cannot market Fast Moving Consumer Goods! People just don’t do searches for fabric softener, low-fat margarine or yogurt. Some of the fattest budgets are here in this field; Google just can’t get a hold on them, but intelligent display ads are another matter entirely.

3) There will be a certain sobering up about the potential of traditional behavioral targeting, since there are simply not enough click behavior data and profiles to cover the demand for target markets. And the attractive budgets of stationary businesses and manufacturers of brand-name goods in the FMCG field can’t be won solely on the basis of behavioral targeting.

4) Predictive targeting will take center stage. It is not without justification that eMarketer recently declared predictive targeting to be a mega-trend and that our competitors are meanwhile pursuing this development as well. Predictive targeting allows both profile depth and coverage. Profiles based on predictive behavioral targeting are fuller than pure usage profiles. The demographic and lifestyle information and product affinities they contain are the key to winning a share of FMCG budgets.

5) Media agencies will establish their own targeting products and will strive to form profiles on the basis of their own data collection. One advantage that agencies have in this regard is exclusive access to post-click behavior, that is, information about what happens on their advertising clients’ pages. This is a big step toward forming their own interest and user profiles. The problematic aspect is the convention among marketers prohibiting agencies from conducting their own measurements. Conflicts and difficult discussions about data rights and business models would appear to be unavoidable here.

6) New solution providers for behavioral targeting will enter the market, while others will disappear through mergers & acquisitions, or at the very least will lose their independence. We saw this in the past year with Tacoda (AOL) and Blue Lithium (Yahoo), and I am now expecting the same for RevenueScience (long on the prowl for a buyer) and WunderLOOP (there is supposedly a review of investors and their previous sales cycles going on). Innovations will continue to flow from the USA, but also buttressed from Europe as well. Without patting ourselves too much on the back – looking at the developments made by nugg.ad, United Internet TGP and WunderLOOP, I see Europe as being a technological step ahead of the market leaders from the USA right now.

7) The handling of data privacy issues for online marketing will receive increased attention from a broader public and hence government as well. Privacy protection debates are surely not going to hold up the marketing of websites and thus the success of a billion Euro industry, but they will need to be taken very seriously. In the end, the only ones who can sustain their position will be those who work actively on privacy protection, are not limited in terms of transparency and respect users’ rights without any ifs or buts. As we place a very high priority on these things, nugg.ad has become the first targeting service provider to earn certification from the ULD, a renowned organization with great authority in the industry. We would most emphatically welcome it if our colleagues were to follow our lead here.

Data retention and behavioral targeting: why targeting via “service providers” is (can be) the best option*

Friday was a black day for civil rights and informational self-determination. I grew up in Bavaria, but after I moved away I had hoped that the whole business of computer surveillance, dragnet controls (“identity checks where there are no grounds for suspicion”) and suchlike would belong in the past. Now these measures are being introduced throughout the whole country, on my beloved Internet. To connect this with September 11 is laughable – anyone who has studied the material knows that. So should we read the newspapers more again, and watch more TV? Because no IP addresses can be tracked there?Hopefully not (although reading the papers more often wouldn’t do any harm – but that’s another story).In addition, there is an increasing number of initiatives dedicated to the craze for storing data on the Internet which want to fight against it becoming simply a matter of course to collect and link data and to use the resultant personal profiles for whatever arbitrary purpose (see for example: www.wirspeichernnicht.de). At an FTC hearing it was even suggested that a do-not-track lock list should be set up.I think that everything possible should be done to keep the Internet as a place where people can distribute information more quickly, with fewer filters and with far lower entry thresholds for authors and readers. In other words, as a sensible and intelligent new form of reading newspapers (and producing them). But also with free offerings and simple sources for financing this…That’s easily said, of course: of course I’m writing in the nugg.ad blog and I work for a company that promotes itself with the claim to make advertising more intelligent and better tailored to the users’ interests. I’m also convinced that there’s no way this trend in online advertising can be stopped, and it must therefore above all be structured. In addition, it’s an incredibly exciting project to finally give online advertising the features that are possible online and which put online ahead of all other media. And that is also to do with tracking…The point is: no personal profiles need to be created to do this! I’d even go so far as to say that no one in the advertising trade actually has any real interest in Schäuble-type personal profiles which can be related to individuals. A rough “good guess” is perfectly adequate. A segment that is served efficiently, a halfway passable estimate of what might interest someone (we’re talking about Flora margarine vs. Stork margarine and the like here, not about political leanings or sexual preference). What’s not clear to a lot of people is that advertising for micro-profiles or even individual persons is simply unaffordable and consequently not wanted. Even the popes of CRM Peppers & Rogers soon distanced themselves from the strategy of 1:1 marketing and have introduced “mass customization” as their guiding principle.This should be grasped as an opportunity for behavioral targeting. In other words, not only is it prohibited to create individual personal profiles without permission; it’s just not, in fact, necessary! So it shouldn’t be done; on the contrary, every effort should be made to avoid sailing in the wake of these unspeakable initiatives (data retention, etc.).So what should a company do when it wants to introduce “clean behavioral targeting”?

1. Ensure that no IP addresses are collected or stored, preferably by using a strong 3rd-party anonymizer and ensuring corresponding contractual agreements, because this is the only way to guarantee that the protection cannot be bypassed. That’s the ultimate measure to avoid becoming an involuntary accomplice of Schäuble & Co!
2. Don’t work with finely granulated click profiles (“User A clicked on football 10 times, NRW regional news 4 times and adult entertainment once”). A statistically concealed profile is quite sufficient (“User A has 0.8 interest in football, 0.3 in adult entertainment and 0.4 in news”).
3. Don’t do it yourself! It’s a common mistake: implementing behavioral targeting in your own company, in particular when you also have access to other data of the user (because you are the ISP, for example) is in no way more reliable than putting it in the hands of a third party. The danger lies in the inadmissible linking of data, and this is far more transparent and must be regulated by clear agreements when targeting is implemented by a specialized service-provider. Data privacy experts speak of the separation of information powers here.
4. Offer an opt-out option and inform the users clearly about how the data are used. The request to the FTC to introduce the do-not-track list is justified by the fact that the industry has so far not been able to create easily accessible opt-out options voluntarily! (I think the authors know the global opt-out site of NAI – I think, from their point of view, that this option should be given more prominence and offered directly on all content pages…)

By the way, the most effective measure to gain user acceptance is unfortunately not on the list yet, but I’m sure that will change sometime or other: a sensible trade-off! When users see that tracking (which is performed according to clean and transparent principles, see above) provides them with advertising which is really more relevant (and perhaps a smaller volume of advertising) and that a gem of information can perhaps be found in it sometimes, they will have absolutely no problem with it! Users want to get something in return for the data they provide. Currently they get too little, even though it can be proved that behavioral targeting functions excellently – for the industry, that is…Until this is achieved, the same applies for online advertising as ever: behavioral targeting will help to maintain the growth of online advertising at a high level. Such technologies will also attract new budgets to the online sector from the TV and print sectors (keyword: Lätta). Nearly all the exciting, free offerings on the Internet are financed with this money – and currently really only with this money! Regardless of whether a good content site is concerned, such as Spiegel-Online, Google Maps or free email. Or some fancy Web2.0 game site. Without online advertising, none of them would exist. Consequently everyone (publishers, users, advertisers) should be interested in finding the right way to deal with the topic. Closing your eyes doesn’t help; rather, keeping your eyes open, but without hysteria, by implementing sensible measures. And the industry must simply do everything possible to build up trust honestly.So: we do perform tracking, but what we track does not result in a personal profile. Tracking is therefore no more dramatic than the fact that your way through the supermarket is recorded by market researchers and is used to optimize the shelves. They’ve been doing that for years, by the way…*PS: Naturally I’m not trying to say that in-house targeting per se is not OK. The principles outlined above can also be used for that – even if by definition introducing the separation of information powers requires another party to be included…

Facebook targeting: but how?

I don’t want to be a spoilsport, and at the moment it’s about as dodgy to criticize anything about Facebook as it is not to buy an iPhone.But I have to say that all the hype about the wonderful Facebook targeting (and also about what Myspace has launched) puzzles me. Even more so now that I’ve taken a closer look at it (yes, I have a Facebook account!).I found it fundamentally rather questionable that sensible targeting for online advertising should be based on a self-maintained community profile. Shit, now even the holy Web 2.0 principles are coming under attack… Surely we don’t want to call into question the user-driven content, tut, tut, tut. But nevertheless, profiles created in Myspace and Facebook are simply a long way from being taken seriously. After all, they’re not a virtual registration office. People present themselves there and turn themselves into what they’d like to be, and so on.That’s totally OK, and it’s a no-brainer. But why that should suddenly be so revolutionary for online advertising really puzzles me. And it’s all the more puzzling when you examine exactly what a Facebook profile can actually contain, provided someone has really taken the time to complete it and the details are half-way correct.Let’s just imagine we’re a brand manager of an online advertising budget and we are confronted with this online advertising revolution. What criteria can we now choose for out advertising?

1. Sociodemography

OK. Age, sex, hometown, country, political views and religious views. All regional information is old hat, any old ad server can do that, and it doesn’t work anyway.Age and sex are fine, of course – no question. If these details are correct (??) they provide important information for online advertisers! Though some email providers and ISPs have got this information – if they really dare use it for advertising…But the revolutionary potential is still barely above zero.

2. Relationship status

Are we hetero or gay? Married or “complicated”? Are we looking for sex (openly or secretly)?This is irrelevant for advertising – except for online dating sites, perhaps.And with dating sites you can already see another problem: how would it be for users if they entered “Looking for Dating” here and then the banner for the Parship dating site would always appear at the top of the screen? I think people would find that most unpleasant…

3. Interests

Now things are getting interesting. Personal interests and preferences. With a free entry mask. Hmm….Let’s be honest here: how much information will we find here that is relevant to advertising? Not even taking into account different spellings and so on. But what advertiser is going to be interested in my favorite films or books or what I consider the coolest quotes? I believe we’ll soon witness a few wonderful cases concerning music downloads or DVDs (my tip: Hitflip). Those will work too, if reach is not taken into account. So we have the simple phenomenon that users (naturally not all of them) will specify something here, but these details will be far from complete and certainly not up to date. If I think the new Babyshambles CD is great, I’m going to rush to update my Facebook interests profile before I do anything else. And I’m not going to enter all the songs in my iTunes library there, no, no, no…The result is simple and dramatic: Facebook targeting has no reach! Even if a few users mention Babyshambles, Facebook will still only contain a fraction of the Babyshambles’ fans. Even Facebook comes quickly into the region of just a few thousand profiles. And these then have to be active for the campaign. But advertising aims at bulk, and the TKPs that call Facebook will only work with bulk. Ergo..…But above all: from the point of view of advertising, how much is missing here in terms of interests? What about consumer goods, electronics, insurance, financial services, automobiles, DSL preferences, hair conditioners and the wonderful “sweet and savory snacks” (AGOF)? None of them are there. And even if an entry form were available for these products, of course nobody would complete it – it would probably drive the users away. Or they would bombard it with spam, like the wonderful interests questionnaires that gmx regularly sends its users, for example.What else is there? University, current employer, previous employer, job description, etc.

Conclusion: Facebook will permit targeting with respect to age and sex. That’s it. And good advertising opportunities for dating sites and music labels perhaps – but with major reach problems and tricky questions relating to data privacy.

For advertising, it’s the other way round: forget the profiles, use them for profilingI have no doubt that Facebook and other social networks work…as social networks! In other words, we will actually find a great deal of relevant information on people there, often private information and not infrequently also quite special things which people describe well. That’s the whole point of these networks – that people use them to describe how unique they are (definitely with a mixture of fact and fiction). And then that they find other people in this way (because they want to do this, the quality of the profiles will always be totally OK). But the profiles will never be of the type that the advertising industry would want. However, with statistical methods, a few additional tricks, and intelligent handling of the topic of data privacy, you can make something out of the profiles that will be relevant for advertising.That is, when you take the people’s digital DNA as a basis for profiling procedures and don’t attempt to control advertising directly on the basis of the profile information! For example, by questioning a few Facebook users about the products they are interested in. And definitely not entering the answers in the profile, but keeping them strictly separate – and also communicating this fact. That’s the only way to get honest answers (as it simply makes no sense to give fake answers). Then take these answers + the digital DNA as the basis for profile assessments.

That will work; I’m sure of that.

Targeting on real user-profiles vs. Predictive Targeting

Myspace profiles are lying to marketers!

Today i read an interesting article on imediaconnection about the risks and chances of doing behavioral targeting based on real user profiles on social community websites like facebook or myspace. It’s not a surprise that those platforms – especially myspace – are planning to use user profile entries to offer them to online marketing experts and let them run campaigns according to peoples interests in their profiles.

But the author raises the question whether profiles from myspace users deliver really the information marketers would expect. Do users enter accurate informations regarding their sociodemographics and their interests? Are these profiles really the revolution in online-marketing that it could be? Maybe not. This is due to the fact that users are cheating quite frequently and up to 30% of the profile informations seem to be wrong. This is because of two main reasons: privacy concerns and humour. People sometimes find it much more amusing to create false information about themselfes than anything else…

Now let me point out why predictive targeting might be a nice solution to achieve the intended results without getting into troubles like that.
Read the rest of this entry »

Behavioral targeting from the viewpoint of BBDO boss Robertson

Last week Thomas Knüwer submitted a question via Twitter, because he was soon due to interview Andrew Robertson, the Worldwide CEO of BBDO (here is his blog entry for his question).Mr. Robertson’s answer to the question I had sent to Thomas about his assessment of behavioral training was as follows:“I have a huge belief, a huge belief in the importance of behavior as a source of insight, a mechanism for giving access… One of the things that has happened over the last 20 years is that is has become faster and cheaper and easier to ask people what they think and feel than to look at what they are doing, and as a result there is a big sort of shift in the way in which research is being done in the areas that people look at for insight.”The media podcast Bel Ètage is available here in the Handelsblatt, via iTunes or at sevenload.

Presentation of our “nuggalizer” at the OMD

Naturally we will be represented at our own booth at the OMD again in 2007, this time with a team of eight;) This year the focus will be on presenting our latest innovation, the “nuggalizer”:

The nuggalizer is a new type of planning tool for behavioral targeting. It enables website operators and marketers to identify target groups which are relevant for advertising and to check how great their potential is by means of behavioral targeting. This tool permits meaningful target group planning on the basis of current real data.

So visit us at our Booth 10H02 in Hall 10 at the Düsseldorf Exhibition Centre and see for yourself the functionality of this novel analysis and planning tool.

In addition to an overview of current trends in technology, we also have available the comprehensive results of studies into the effect of behavioral targeting in online advertising. …And of course there will be chocolate on offer again – it’s definitely worth visiting us;))

Predictive behavioral targeting provides greatest boost to ad clicks

The study conducted by Werbeplanung.at in conjunction with AdLink.at, sms.at and our customer Tripple Internet Content Services, published yesterday, shows that significantly higher click rates (here with predictive behavioral targeting: up to 250%) are achieved with behavioral targeting campaigns: “After the press conference of Tripple and nugg.ad regarding the introduction of predictive behavioral targeting in Austria the question arose of what targeting achieves,” wrote the questioners. The Austrian advertising planning bloggers started two waves – one with and one without behavioral targeting – and compared the click rates of the campaigns in the two delivery waves.The result: “AdLink increased its click rate on the participation form by 78%; at sms.at the increase was 125%, at Tripple it was 250%. […] A significant reduction in the TKPs was achieved for all the test participants by means of the different targeting methods.” AdLink used environment postings for behavioral targeting, sms.at used registration data, and Tripple Internet Content Services used a combination of behavioral targeting and predictive behavioral targeting. Here is an overview of the study results:

Seven assumptions regarding online advertising, or why you can’t get round behavioral targeting

Because of the great demand – despite the fact that they can be downloaded from our homepage under “In the media” – here are the seven assumptions regarding online advertising for you to read and, of course, to discuss if you wish…;)

1. The target group is more important than the environment

It is better to have the correct, i.e. relevant, advertising in some sort of environment than some sort of advertising in the supposedly correct content environment. But how do you find out whether your advertising is relevant for consumers? Offering online advertising which reflects the click behavior is not sufficient here, because this only enables you to cover sectors for which advertising offerings exist. But what about products outside the major categories such as travel, finance or automobiles? By linking survey data and statistical methods you can sharpen the profile of the website visitor and increase the relevance of your advertising –without any corresponding Internet offerings.2. Targeting prepares the Internet for FMCGIt’s hard to believe, but Google can’t do everything. Pork sausages, yoghurt, toilet paper? No way. One of the most important product categories, Fast Moving Consumer Goods (FMCGs), is hardly present at all online. The reason: the wastage for brands and companies in the segment is too high online. But real-time coupling of user behavior and survey data enables you to significantly increase your relevant target group and to minimize the wastage in your campaign. As a result, the Internet is finally ready for the branded companies’ fat budgets.3. Wastage harms your brand Advertisers like to forget one thing: every irrelevant advert is a burden on the brand because it does not take the individual seriously. In contrast to print, radio and TV, on the Internet you can do something about this – because targeting provides you with a link to the consumer. Untargeted advertising pressure on anonymous masses was yesterday; today we listen very carefully and get to understand the interests of the individual.4. Don’t overdo click optimization; what counts is target groups With next-generation behavioral targeting, click optimization and TKP are no longer contradictory. The times have passed when you optimized banner campaigns by throwing out the motif or placement with the lowest click rate. The key to success is not increasing the click rates of arbitrary target groups but addressing the relevant target group. That’s the way to optimize the advertising impact.5. Data privacy is a valuable commodityInformal self-determination and data privacy are basic values of our society and are clearly regulated by law. Respecting and actively supporting these constitutes a basic requirement for commercial success with advertising on the Internet. Using only anonymized and pseudonymous data is the correct approach. Person-related information such as name, email address or even just the IP address have nothing to do with targeting.6. Users respond – Targeting is feedback advertisingTargeting fundamentally changes the way advertising works – already today in the online sector, and tomorrow in the mobile phone and TV sectors. The assignment of the content of edited Internet offerings that is important for advertisers has so far been implemented using superficial IVW codes. In Web 2.0 users can do this better: User Generated Content, be it in writing, sound or pictures, is assigned tags. These community recommendations raise contact management to a new level. Flexible targeting technologies will enable you to develop completely new approaches and utilize the potential.7. In 2010 there may perhaps be less advertising, but it will certainly be more targeted Whether it’s the Internet, the mobile phone or the game sector, TV or IPTV – in the future, there will be more targeted, individual advertising blocks in the digital media. As early as 2010 every second online campaign will be supplied with targeting. Whether this will mean that advertising overkill is a thing of the past still remains to be seen. But targeting is definitely an important step in the fight direction.