ValueClick announced its new behavorial targeting technology that it calls User Retargeting (not much imagination there in the product naming department, huh?).

As you recall, Behavioral targeting uses behavorial data to make demogaphic and psychographic assumptions and conclusions about a user and then chases that user across a network of sites using highly personalized content to get the user to perform the action the advertiser is looking for.

Here’s what I got from reading between the lines at ReveNews and Yahoo Finance:

Users are first recognized, using non-invasive technology and without collecting personal information, as having visited an advertiser’s site

Translation: ValueClick drops a cookie on the user

and then “retargeted” with highly customized ads when they are recognized on any of the more than 13,500 sites within the ValueClick Media network.

Translation: The ad server has a series of ads (we might call this a campaign) that it shows to the user progressively as they visit sites on the network, based on which sites the cookied user visits.

This is indeed basic behavioral targeting. This explains why they bought FastClick — to get the sites to chase the user on across their vast network.

Based on their press releases you would think ValueClick had invented electricity.

“Our new behavioral targeting solutions provide advertisers with increased campaign performance and incredible scale that can only be achieved on a network the size of ValueClick Media,” said John Ellis, vice president of product management. “We are encouraged by the early results of our User Retargeting campaigns and plan to introduce a suite of behavioral targeting capabilities to further assist advertisers in reaching online consumers.”

They claim that their clients are getting up to a 26 percent improvement in the average cost per-visitor, a 59 percent improvement in the average cost-per-sale, and an overall conversion rate increase of 1,800 percent. In addition, these user retargeted campaigns generated a 223 percent increase in the average order value.

I’m suspicious of these numbers, but they may actually be true. In the offline world, if someone’s in my store, looks around for a while and heads toward the door, one of my people is trained to say Did we not have what you needed, sir? or Is there something I can get for you, ma’am?. This results in a sale in many cases. This is the online equivalent.

Put another way, if you’re groping around in the dark for a customer (not literally, of course), which is exactly what your average banner farm is all about, since it blindly serves banner ads, turning on even the smallest flashlight will improve how you see things. Basic behavorial targeting is that flashlight.

Jeff Molander on ReveNews is a bit more skeptical:

ValueClick Media division trumpeted its new toy loudly boasting eye-popping, jaw-dropping ROI numbers from clients that were so astounded they just couldn’t bring themselves to being named publicly.

Maybe someone out at the [ad:Tech] show can ask them to back these numbers up, eh? We either need to back them up or face our destiny: world domination by ValueClick Media.

Still, there’s a lesson here…basic behavorial targeting (dropping a cookie on the visitor and using a progressive campaign, whether across multiple sites or at your site) will significantly improve your ROI.

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This entry was posted on Tuesday, April 25th, 2006 at 1:28 pm.
Filed under Internet Marketing, Ad Technology.
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