When Does Behavioral Targeting Work?

A lot of publishers in the advertising/media business don't understand the situations when behavioral targeting will almost always result in better eCPM rates than contextual targeting.

For the sake of this post, let's disregard the fact that there different methods of behavioral targeting, each with their strengths/weaknesses. We'll stay with the standard definition of behavioral targeting -- when you target online consumers based on their past online behavior. Contextual targeting is when you target them based on the current page they're on, and what that page is about.

My rule of thumb is that contextual targeting always performs better than behavioral targeting, if the context is clear and of commercial value. I've got over 5 years experience in the contextual/behavioral landscape and have proven this over and over in various tests. However, if browsing context is poor -- either no context whatsoever (only images on the page, for example) or there's a high signal/noise ratio (social media) -- or of no commercial value, then behavioral targeting will always perform better than contextual targeting.

Let's consider several types of Web sites, indicating for each the targeting that generally works better (big "X"), never works better (no "X"), or sometimes works better (little "x"):

Type of Site	Contextual	Behavioral
Search	X	x
SEO	X
Community/social		X
News & reference		X

Search sites are all about current context. Contextual targeting almost always works better, but there are exceptions -- such as when the search keywords have no commercial value and the user is searching images. In that situation, contextual advertising doesn't work and you're better off targeting the person based on their previous interests.

I define SEO sites as those that focus entirely on search traffic. They optimize their content and links specifically for indexing within Google search results. And as a result, >95% of their traffic comes from Google -- users click on the link within the search results, go to the page, then usually leave within 1-2 pageviews. Google AdSense tends to work best on these pages, offering "secondary search results". Behavioral targeting doesn't work at all.

On community or social media sites, page context is usually very poor and many sites require logins, which means Google can't index the pages to determine context. So contextual advertising programs (like Google AdSense) don''t perform well. Behavioral targeting can work much better, if done right. People tend to spend quite a bit more time on these sites, and provide a lot of good information about themselves and their interests. Our affinity profiling software knows how to weed through the noise and figure out what people care about. And recent tests have shown 70% lift in eCPM rates using that for targeting instead of page context.

The content in news and reference sites is usually of poor commercial value. Contextual targeting can therefore be difficult, and can also result in badly placed advertising. So targeting the user based on his/her interests (instead of the page) will almost always work better than contextual targeting.

Summary

Targeting someone based on their previous behavior/interests doesn't result in better performance if the user is on a page narrow in context and commercial value. The reality though, is that there are a lot MORE pages viewed these days that are very poor in context -- blogs, social networks, videos, images, news, dating, email, family pages, etc. In that situation, targeting the person is much more effective than targeting the page.

Comments

[Steve Allan]

I really like the way you explained the difference of both contextual targeting and behavioral targeting, and when it is performing well. This information would be useful for the readers, thanks for sharing.