The NBC Universal Peacock Fund of Fairfield-based General Electric Co. invested $6 million last month in The Rubicon Project, a Los Angeles company fresh off acquiring Others Online L.L.C., which helps companies better understand the online browsing behaviors of visitors to their web sites.
Expect others to follow GE across the Rubicon.
At the annual Advertising Week confab last month in New York City, behavioral targeting appeared to have finally passed the point of no return in terms of broad acceptance, with advertisers and their agencies drawn by the technology”™s ability to define consumer preferences and reactions to ad impressions.
The week before Peacock Fund”™s investment in The Rubicon Project was announced, Adobe Systems Inc. cut a $1.8 billion deal to acquire Omniture Inc., which helps companies measure the effectiveness of various interactive marketing programs.
In short, behavioral targeting allows advertisers to collect information on an individual”™s web-browsing behavior, including web searches, the web sites they visit and the ad links that they click.
Such an invasive approach still arouses the suspicions of consumer advocacy groups ”“ a coalition of such groups recently asked the Federal Trade Commission to establish a registry akin to the Do-Not-Call registry to allow consumers to opt out of any behavioral marketing campaigns.
Among other proposals, the FTC has asked the industry to include prominent statements on web sites that collect behavioral data, and allow consumers the ability to opt out.
Legislators in both Connecticut and New York reportedly considered laws last year to limit online advertisers”™ ability to gather data for the purpose of behavioral targeting. Despite the legal scrutiny, companies continue to rush such capabilities to the market, including Microsoft Corp., which this month disclosed software to improve behavioral targeting on mobile devices like cell phones.
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While behavioral analytics has been part of the Internet landscape since the early part of the decade, companies have improved the technology markedly in the past few years, while applying it to emerging platforms like online video, web radio stations and mobile devices.
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According to Steve Minichini, CEO of the Stamford online marketing agency Triumph360, companies are also inking deals to apply behavioral tracking techniques to previously walled-off customer bases, such as physicians or financiers that use password-protected sites. Such customers”™ surfing habits represent a gold mine for advertisers.
“Now through these networks, you are serving an ad based on their behavior versus their demographic,” Minichini said.
If any one marketing channel could be said to have survived the recession”™s onslaught relatively unscathed, Minichini said, it would be the dinosaur of paid search-engine marketing.
Ironically, part of that is due to the realization that TV ads are driving people to search engine sites like Google, Yahoo or Bing to find information on a product just seen on TV ”“ and that the resulting search-engine use data provides an immediate data point on how effective a TV ad is.
NetElixir, a Princeton, N.J.-based firm that analyzes the paid search market, said last month it expects a year-over-year increase in “clicks” and conversion rates for paid search advertising this holiday season.
Twitter, Facebook and other social media continued to receive ample attention in the past year of course, but marketing agencies and companies alike are still grappling with how to effectively use them as marketing channels to increase revenue, Minichini said.
