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Online advertisers employing new tools

You certainly expect to see golf ads while visiting the golf section of But if you’re a devoted duffer, those pitches will soon find you as well when you’re checking baseball scores or catching up on football trades.
/ Source: The Associated Press

You certainly expect to see golf ads while visiting the golf section of But if you’re a devoted duffer, those pitches will soon find you as well when you’re checking baseball scores or catching up on football trades.

ESPN and other Web sites, eyeing the successes search engines have had with ads based on keywords, are exploring a new form of targeting that’s tied to their visitors’ online habits.

Though some privacy advocates find the practice creepy, Web sites say the technology lets them deliver ads that readers find more relevant.

“If someone spends an awful lot of time on mutual fund pages, clearly they are interested in mutual funds,” said Scot McLernon, executive vice president of sales at Inc. “Why not have ... mutual fund advertising follow them?”

McLernon said MarketWatch was in talks about the new targeting with more than a half-dozen advertisers, including an online broker and an airline, while ESPN’s sales force began marketing it in late May.

Both online destinations use Revenue Science Inc. of Bellevue, Wash. Others in the behavioral targeting business include Tacoda Systems Inc. and AlmondNet Ltd., both of New York.

Such companies are seizing on a rebound in online advertising as Web sites — and surfers — get more sophisticated. After two years of decline, online advertising revenues jumped 21 percent last year, according to a PricewaterhouseCoopers study.

Much of the growth came from keyword ads that Google Inc., Yahoo! Inc. and others deliver alongside regular search results. Such ads accounted for 35 percent of ad revenues last year, up from 15 percent in 2002.

The success of keyword ads made non-search sites jealous.

“The noise made from billions of dollars flowing out of their hands and into somebody else’s hands made everyone sit up and take notice,” said Omar Tawakol, senior vice president of marketing for Revenue Science.

Tacoda chief executive Dave Morgan, who counts USA Today, iVillage and The Associated Press among his clients, said use of his technology has tripled in the last nine months.

Riley McDonough, vice president of advertising sales at, said Web sections devoted to golf, motor sports and football regularly sell out. By letting ads follow those readers elsewhere, he said, the site expands its premium ad space.

Targeting has long been a holy grail for Web site publishers, but it was rather crude in the Web’s early days; neither the technology was well enough developed nor the audiences particularly defined.

In recent years, Web sites have had success in targeting ads based on the content of a specific page, or visitors’ geographic location, which can be determined by their computers’ numeric Internet addresses.

Ads can also be limited to specific hours to reach work audiences.

Weather sites have gotten particularly creative. Using ZIP codes entered to get local weather forecasts, can serve ads for Mosquito Magnet, for instance, when a region is apt to be plagued by the blood-suckers.

While search engines had success tailoring ads based on what visitors sought, behavioral targeting goes further. Users who check airline prices are obviously travelers. Visit an auto section, and you’re considered a potential car buyer.

The technology’s power is its ability to let advertisers follow visitors around as they click through Web journals, dating services and social networking sites like Friendster — destinations where freeform conversations can be difficult to categorize.

Here’s how targeting technologies generally work:

  • They place a data file known as a cookie to identify visitors and keep track of visits to specific content areas, gauging the intensity and timing of the visit (It may take multiple visits within a certain number of days to trigger related ads).
  • The cookie data are sometimes combined with the user’s location and demographic data obtained during registration.
  • The numeric Internet address can also carry clues about the visitor’s employer or line of work.

Advertisers pay extra for targeting — amounts cited range from 25 percent to 10 times the normal rates — but they get better response from fewer ads.

And that’s what worries some privacy advocates. They think behavioral targeting amounts to profiling because information is recorded — something unnecessary in keyword advertising.

Jason Catlett, who runs Junkbusters Corp., fears a consumer backlash once behavioral targeting becomes more common and visitors realize how much profiling is involved.

He recalled the heat DoubleClick Inc. took in 2000 when the online ad network said it would cross-reference data thought anonymous with consumer information from a marketing database company it had bought. DoubleClick soon backed off.

So what do these new behavioral targeting companies know about the Web surfing public?

Revenue Science and Tacoda both say individual Web site owners will possess user profiles and that they won’t be shared with others. Sites fully disclose targeting in their privacy policies, Tacoda’s Morgan added.

Kanoodle Inc., a competitor, is even moving targeting beyond single sites. It now offers profiling across multiple sites, though president Lance Podell insists profiles don’t carry any personally identifiable information.

Also in the targeting business is Dotomi Inc. Offering a different twist, it launched a service last month that seeks users’ authorization. Once you’ve agreed, say, to receive pitches from an online bookseller, you might then see ads based on past purchases.

Tawakol said Revenue Science has the technology to do much more — but won’t until consumers become more comfortable.

“We can’t afford to rush ... and then have the privacy backlash.”