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Behavior targeting does not work

October 24th, 2010 · Comments

I ran into a former coworker of mine last week. He has been a very experienced ad sales person in the online display advertising industry. I have been working on the product management side of display advertising for the past three years.

We both left online display advertising recently and joined e-commerce companies. Amazingly, we reached the same conclusion about online display advertising:

  • Paid search is still the king in online advertising. It performs better than any other form of online advertising.
  • Next to paid search, contextual advertising is the second best option, followed by re-targeting.
  • Behavior Targeting is better suited for brand advertising – it provides advertisers a pre-qualified audience. However, in term of performance marketing, Behavior Targeting is not a very good option. In fact, I’d challenge any behavior targeting ad network to share their performance metrics. There are tremendous amount of hype in this industry, but very little substance.
  • Most ad networks are nothing but glorified ad agencies.

By the way, if you’re interested in the online ad network space, I highly recommend Top 5 Media Startup Mistakes by Mike On Ads. I particularly love this line from the article:

“Today, one great trafficker/optimization analyst can beat almost any algorithm out there A team of 5 temps working for a week can apply categorizations to the top 1000 internet sites with similar accuracy to the fanciest semantic engine. A smart BD guy can buy KBB data w/out a deep API integration to a data exchange. A buying strategy of “remarketing” will out-perform any other campaign strategy or behavioral data by at least 10x.”

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