This AdWeek story reports that Lycos is teaming up with a company called AlmondNet to track users’ search behavior, then serve them high CPM banners as they visit non search sites. Claria has already announced it wants into this game, and I had a very interesting chat with a source today about Yahoo’s attempts to do something similar on its own network. The net net: it’s hard to do well, and there are major privacy issues.
Of course, one of the major goals of any publisher is turning low CPM impressions into high CPM impressions. If only they knew what their readers’ wanted, and could serve them ads which understood that intent in real time. To quote from the AdWeek piece:
AlmondNet has struck deals with undisclosed ISPs and adware companies to collect non-personally identifiable search behavior through cookies. The search data is then used by AlmondNet’s Post-Search broker network, which buys low-priced run-of-site inventory from publishers, to display graphical ads tied to previous search behavior.
For example, a user who searched for “health insurance” on Google might later see a banner ad on a weather site reading, “Looking for health insurance? Click here for low-cost options.”
“Forty percent of online advertising spending goes to search engines, but people spend less than 5 percent of their time on search engines,” said Roy Shkedi, CEO of AlmondNet. “Something doesn’t add up.”
You know what doesn’t add up for me? The “undisclosed ISPs and adware companies.” Behavioral networks are nothing new, but clearly this idea is gaining momentum. If it is going to really work, we have to have transparency, period. I want a dashboard for my data, I want to know how it’s being used, and i want to edit it at my will. Nothing less will work, in the long run, or should, to my mind. Give that to consumers, and this space will not only heat up, it will take off.
I agree that consumers need transparency but there is a bearable price to pay for more targeted advertising until we can be transparent without risking privacy. Targeted advertising helps consumers maximize utility for given income. True in its lowest form it encourages those without the means to buy beyond what is necessary but more often then not advertising helps a free market. It drives dollars to suppliers who can produce at the lowest cost, and there for sell at it. Advertising can inform consumers to possibilities and allow better comparison of options. The great part about directed advertising is its efficiency. I will be served ads on products or services I am looking for and advertising dollars can be better spent so that savings can then be passed to those who wish to buy, or better yet to develop better products. I forget who said “They tell me I waste half of my advertising budget on people who are not going to buy my product. But they never tell me which half!”
I think on the front end in order to benefit from this technology it is going to require regulation where information gathering is concerned but I am not sure security is where it would need to be to allow transparency.
First time posting, wanted to let you know this site is my first stop every morning at the office. Keep up the great work John. I am beginning to focus more on consulting in the e-commerce and marketing space and hopefully will have some insight to add in the future.
That was quick. Only three mionths since I predicted ways of transferring the user’s query to the desination site for the purpose of targeted ads (see article from January 3, 2005, scroll to “Integrated Search and Browsing”).
Anybody can do this right now through the referrer info coming directly to the distination site from the user’s browser. No need to pay anybody anything or to be limited to “certain search engines.” Of course, search engines may implement another of the predictions and remove this referrer info, since it’s a way of giving away a lot of their value for free.
I don’t see great privacy concerns in websites knowing what term you searched for to arrive there. Currently, they already know because this info is stored in the log files, though most sites only analyze the logs afte the fact and not in real time. So it’s part of the way the Web works right now (which is not to say that most users would know, of course).
Disregarding any advertising, it’s always useful for websites to analyze what terms users employed to find them, because these terms embed strong clues about the users’ needs — which again can be used in redesigning the site.