Tuesday, May 26, 2009

Video Insider: Have Advertisers Outsmarted Themselves?

Have Advertisers Outsmarted Themselves?

One of the greatest gifts the Web has bestowed on content owners and the advertisers that support them is the mountain of data that is available at every turn. But this is also turning into a problem for advertisers and publishers alike. Are brands taking behavioral targeting too far?

It won't come as any surprise that the Web has transformed advertising, maybe more than any business in the world. Google, the poster child of the Web's dominance, has built an empire around an advertising model that not only didn't exist 15 years ago, but really wasn't even possible. Dynamically matching advertising to content, although now seemingly commonplace, is revolutionary in every sense of the word.

The first decade of this century has seen the rise of data-driven marketing. ROI is king, everything is measured, and that means everything is targeted. The age of "18-35 year old males" being a sufficiently specific demographic was dead before the ship even sank. Now, thanks to Facebook, Gmail, Del.ici.ous and a bevy of other social services, we have access to enough data to learn significantly more about people without any personal interaction. Furthermore, we can track those people across multiple properties and indefinitely improve our accuracy in targeting them with relevant, desirable content and advertisements.

For advertisers, this mountain of data means they can refine their targeting orders of magnitude more than ever before. We've come a long way from the entire world being broken up into a dozen or so buckets. Entire marketing campaigns are being built around demographics so specific, you may have to test the limits of the six degrees of separation theory before finding a hit. It might take you years to find someone to fit the bill of "Asian females from the Southwestern United States age 22-27 who like skateboarding and have been to at least 2 professional sports games in the last year," but that might be a slam-dunk market for a major brand advertiser. This is, without doubt, the greatest gift to advertisers of the last half century.

Getting back to our original question though, have advertisers grown a little too smart for themselves? These micro-targeted groups benefit from brand advertising, but it's nigh on impossible to find enough people fitting the demographic to justify large scale brand recognition ad buys that programmers and publishers need in order to afford to make this type of hyper-targeting possible in the first place. On the mobile side, this audience just got the kick in the pants from the iPhone it needed to convert consumers to video on the phone -- Nielsen just announced that viewership is up 50% over last year -- but this audience is still in the early days and trying to impose these highly targeted, yet micro ad buys on what is essentially an early adopter audience isn't moving our industry in the right direction. One could argue that such micro-targeting could in fact become the mad-cow disease of our industry, killing off many viable businesses in the name of raising the engagement needle a few points.

Occam's Razor theory states that the simplest explanation is often the correct one. Perhaps in our quest for more detailed metrics in the hunt for greater ROI, we've actually moved further away from what we were originally seeking. I would suggest we stop holding online and mobile video advertising to a different standard or litmus test of value. These platforms (desktop & mobile), by their nature already offer tremendous insight into our respective user/viewer bases and if managed and mined correctly, give us sufficient data to derive a much more quantifiable ROI than television, in its one-size-fits-all, bulk format, could ever hope to offer.

So perhaps what we truly need is less focus on advanced mathematics and a more concrete focus on the basics of user engagement, personalization and seamless mobility of the user experience.

Anthony Bontrager is president of 1Cast.com, an online and mobile broadcaster of near real-time video news from providers such as Reuters, BBC, Bloomberg, WSJ, CNBC, AP and CNBC. 1Cast creates personalized news feeds and delivers them to the desktop, Android or iPhones.

Video Insider for Tuesday, May 26, 2009:

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