Feeds

Behavioural targeting works, claims US study

We ring the bell, you dribble - but at a cost

Secure remote control for conventional and virtual desktops

Behavioural advertising is more than twice as good at getting ad-viewers to make a purchase compared to non-targeted internet advertising, but costs more than twice as much, a survey has found.

US advertising network trade body the Network Advertising Initiative (NAI) commissioned the study, which was based on data provided by advertising networks. It was carried out by former US consumer protection official Howard Beales.

It found that ads that were the result of behavioural targeting on average cost advertisers 2.68 times what normal 'run of network' ads did. Run of network (RON) ads are those placed across the entire inventory of websites that an ad network is contracted to provide ads for.

But the study found that behavioural ads were more effective at getting viewers to make purchases, converting 6.8 per cent of viewers into customers of the company which placed the ad, rather than the 2.8 per cent of RON ad viewers that made a purchase.

The figures mean that online publishing companies, whose space is sold to and by advertising networks, earn more by allowing behavioural advertising to take place on their sites.

Behavioural advertising has been controversial because of its use of information about a web user to try to predict which ads it would be best to show them. Systems track a person's web use and use that information to attempt to second guess that person's product preferences.

Privacy activists have objected to some systems, arguing that all behavioural advertising should happen on an 'opt in' basis, and that more obvious notice should be given to web users than just adding a warning to a site's privacy policy.

US advertising trade bodies announced a labelling system last month that they said would warn consumers that an advert was the result of behavioural targeting. No such scheme exists yet in the UK.

“Over the past several months, policy discussion around behaviorally-targeted advertising has lacked a critical foundation, because there had never been an empirical assessment of the value of such advertising to ad networks, consumers, and publishers,” said Beales, who is an economics academic who was once the director of the Bureau of Consumer Protection at US consumer regulator the Federal Trade Commission.

“This study found that behaviorally targeted advertising is a critical component of ad network, publisher, and advertiser success," said Beales. "Behaviorally targeted ads sell for twice the price and offer twice the effectiveness of normal run-of-network ads, significantly enhancing the advertising revenue engine driving the growth of the Internet.”

The NAI study found that publishers can make more money from their online advertising space if they sell it to behavioural advertisers. Full behavioural tracking attracted rates 2.68 times that of RON ads and 'retargeted' ads, where someone is shown an ad for a product they have previously looked at, attracts rates 1.5 times that or RON ads, it found.

Behavioural ads were clicked on 670 per cent more times that RON ads, and achieved a sale more than twice as often as RON adverts.

See: The study (25-pg/266kb pdf)

Copyright © 2010, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

Providing a secure and efficient Helpdesk

More from The Register

next story
Not appy with your Chromebook? Well now it can run Android apps
Google offers beta of tricky OS-inside-OS tech
Greater dev access to iOS 8 will put us AT RISK from HACKERS
Knocking holes in Apple's walled garden could backfire, says securo-chap
NHS grows a NoSQL backbone and rips out its Oracle Spine
Open source? In the government? Ha ha! What, wait ...?
Google extends app refund window to two hours
You now have 120 minutes to finish that game instead of 15
Intel: Hey, enterprises, drop everything and DO HADOOP
Big Data analytics projected to run on more servers than any other app
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Top 5 reasons to deploy VMware with Tegile
Data demand and the rise of virtualization is challenging IT teams to deliver storage performance, scalability and capacity that can keep up, while maximizing efficiency.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.