Getting Personal on the Web

February 5, 2009 § Leave a comment

The Wall Street Journal carried a report today on new technologies that improve the personalization of advertising online. The notion is not new: use technology to keep track of where users go and what  they do online and confront them elsewhere with advertising  matching those observed behaviors. In the case of Overstock.com, for instance, the article says they are providing a company called ChoiceStream with the browsing and purchase history of customers on their site so that ChoiceStream can push the appropriate Overstock ad to those users as they move about the Internet pursuing their other interests. The result, according to Overstock CEO, Patrick Byrne, has been a seven-fold increase in clicks on Overstock advertising and three-fold increase in sales relative to his other display ads.

It’s always a slippery slope when  user data is exploited for advertising purposes as another piece on the same story appearing on eMarketer reminds us. People don’t like the idea they are being followed. In the eMarketer article, ChoiceStream President and CEO Steve Johnson is quoted as saying, “Today’s online consumers understand the value of online advertising and know retailers have information about their shopping behavior that can make their experience more relevant.” But, according to a couple of polls in the story roughly 50%  people are uncomfortable with the idea of marketers using browsing history to customize advertising messages.

We keep hoping this slippery slope will dry up. I have heard the voice of advertising reconciliation offered by the likes of ChoiceStream’s Steve Johnson many times before, to no avail. Why? Well, for one thing – and I say this as someone that has spent nearly 30 years in the advertising business – consumers do not subscribe to the “advertising is good for me,” view of life.  Tons of relevant advertising is still tons of advertising. Tons of advertising is ponderous, especially since most of it is a creative blight upon the land. We amplify this problem online where display advertising is a mosh pit. Scott Portugal referenced this fact yesterday in ADOTAS:  in his article he reports that still, today,  75% of all display dollars are spent with eight media companies. Any of those media companies – which will certainly include heavyweights MSN, Platform-A and Yahoo! – may spray display ads in thin layers across the long tail of the Internet, but the preponderance will go to their own brand platforms.

If you want to understand why tweeking display advertising with targeting features such as those provided by ChoiceStream yield seven-fold lifts in action rates, this will be why: advertising online is a mosh pit. It is squeezed into the first few rows. Consumers can’t even raise their arms above their elbows, let alone click on an ad. A bit of personal space, therefore, (which, by the way, occurs naturally, with abundance online) represented by a bit of relevancy is bound to make a difference to people online. But, don’t let them feel your hand in their pocket.

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