Behavioral Ad Targeting: Newspapers

advertising.  For example, consider how online merchants such as iTunes and Amazon.com are among the most successful websites in terms of translating visits into sales. There are two reasons why their conversion performance is exceptionally good.

First, visitors are obviously pre-disposed to buying since they are visiting an online merchant. But the second reason is more interesting and significant in terms of implications for online advertising. Consider how both Amazon.com and iTunes do a good job of suggesting alternative titles for visitors who arrived looking for related books or recordings. It is not uncommon for visitors to purchase the suggested alternate titles. The banners and texts that suggest such titles are examples of behavioral-targeted ads.

Amazon and iTunes target such ads based upon the consumers’ prior purchasing experience at each site. Delivering behaviorally-targeted ads when the ad serving company does not have access to such proprietary information requires a different approach. Most identify visitors by assigning a unique id “cookie” to each visitor at a client site. Thereafter the cookie tracks visitors throughout their ensuing web journey.

The platform then makes a rules-based decision about what content to serve based upon the multiple websites that a cookie-enabled browser visits. Behavioral data can be combined with demographic and geographic information in order to produce a greater degree of targeting precision.

Last year Yahoo developed such a platform and is offering it to outsiders, including newspapers, and more recently AT&T Yellow Pages, among others.

Essentially, newspapers are discovering that their existing sales-force can be used to sell both newspaper and Internet ads to local businesses. Typically one of their strengths is a trusted prior relationship with local advertisers. Yahoo has partnered with a consortium of newspapers to which it provides its targeted advertising platform. There are two advantages that the Yahoo consortium provides to participating newspapers.

First, it enables them to sell Internet ads for local businesses that will be distributed on Yahoo web properties as well as the newspapers’ websites. Second, and more importantly, it enables newspapers to sell behaviorally-targeted ads on their own web pages. For example, assume the Yahoo cookie learns that I have been searching for information of BMW automobiles at a variety of websites. Should I next choose to visit my home town newspaper website merely to check on unrelated stories, the Yahoo platform is likely to place ads for local BMW dealers within the online pages of the newspaper that I see. You will see different ads on those same pages based upon your own prior browsing patterns.

While Yahoo has not yet made the platform available to local TV affiliates it may do so in the future. Alternately, a competing platform could offer similar services to TV affiliates thereby enabling them to also sell higher priced behaviorally-targeted Internet ads as well.

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