Can Behavioral Targeting Improve Income for Smaller Web Sites?

Running the numbers

One of the biggest problems faced by a new web site when it comes to monetization is how to do it. You can use Google Adsense and make a few pennies a day. You can try hit and miss affiliate offers but most of these are geared toward highly targeted Pay-Per-Click campaign landing pages, not blogs or informational sites. PageRank passing income opportunities, such as PayPerPost and Text Link Ads, are no longer a viable route due to the recent Google crackdown on paid links. Other opportunities aren’t available to you until you get 10K, 100K or even 500k unique visitors a month. What can a new or small website owner do to break out of the 10 cents a day cycle? Behavioral ad targeting may hold an answer.

What is Behavioral Targeting

Not Quite On TargetThe idea behind behavioral targeting has been around for years, track where a user has been recently using cookies and display relevant ads to the user when they arrive on an “in network” site. The advertiser would by a campaign from a network and the network would pay out to sites where a targeted user clicked a related ad.

This is a bit different from Adsense because instead of depending on the content of the site, the displayed ad would fit the visitor’s profile. For example, if the visitor had been recently looking up info on vacationing in the Bahamas an ad for a hotel in the Bahamas would be displayed, regardless of the content of your site. If another visitor had been looking at Dodge cars, they might get an ad for a local Dodge dealer. The idea is to make the ad relevant to the visitor and not so much the site itself.

Privacy Issues

It’s Hard To Stay Anonymous These Days Remember the movie Minority Report where people are constantly bombarded by targeted marketing messages as they pass by? Did you think this would be rather annoying and invasive? I know I thought so. Do you want every site you visit to be pestering you like this?

Of course, many people block 3rd party cookies like this. However, one of the big pushes is to link behaviorally targeted advertising to services that a user wants to have, such as a useful toolbar or web widget. The hope is that in exchange for a service users will be willing to allow themselves to be subjected to individually targeted ads.

Other Problems

Problems on Top of Problems Aside from the privacy and ad blocking issue, I could see how such an ad program could benefit junky marketing sites more than your average blog. With carefully crafted feeder and dummy sites marketers could encourage clicks on high profit keywords. Essentially, such a system would probably be as gameable as the old Adsense arbitrage methods.

Another problem might be in who gets paid. Your blog article on your Bahamas vacation may have laid the groundwork but the click might go to the next blog the person visits. Would it be fair to give the payout to that site?

Some advertisers may feel that displaying their goods on your angst ridden personal web site may not be a good idea for their brand image. This may cause many of them to not use such networks.

Lastly, managing such a program across a network of 1000’s of sites might be rather daunting. We’ve seen several such heavily hyped large network advertising attempts run into trouble recently, such as Auction Ads and Widgetbucks. Can someone other than Google really pull off a large ad network?

Will It Work?

Yeah, we’ll keep your info ‘on file’ Would payouts be better than Adsense? Good question since this kind of advertising where a large network of sites is involved is a rather new concept. Currently such networks consist of a tight group of high traffic web sites. I would hope that such targeting would produce results comparable to well targeted mini-sites, roughly $30-50 a month.

Sadly, all of the providers of these kinds of services that I’ve been able to find are still stuck above the 100k/month uniques level. Will this trickle down enough to provide income to new/smaller sites that get less than 100k uniques a month? Perhaps even less than 10K? That’s another good question. Hopefully more providers will become open to offering micro-advertising opportunities. Google certainly could use the competition.

Ad targeting agencies say that behavioral targeting is just getting started. It will be interesting to see where it goes.

Do you think this kind of advertising will help, hurt or just ignore the “little guy”? Do the privacy issues of such ads concern you? Are their other problems you see? Do you think it will work? Leave a comment and let me hear what you think.

 


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6 Comments »

Comment by louie
2007-12-04 00:37:15

Nice article. I think you’re right about the behavioral targeting issue.

Comment by jfc
2007-12-04 10:14:51

Thanks for stopping by Louie,

If you look at what the current big advertising brokers are looking for, 2000 to 5000 page views a day. Now consider that most smaller blogs that have reasonable age and promotion will get about 50-250 hits a day. All an enterprising broker would have to do is bundle about 50-100 of these sites into a package and sell them to advertisers. They could do it by niche and traffic level and the return should be comparable, or even better, than what a single big site returns.

 
 
Comment by Brian
2007-12-04 21:05:38

Very interesting. As a small website I am under the same situation. You have already read why I don’t use Adsense, so that is out of the picture for me. However I still find it difficult to get any kind of decent money. So far I am promoting affiliate programs - haven’t made any money yet. I also have recieved 3 private advertisers - however due to the traffic of my site, I wasn’t able to get a whole lot.

Maybe I’ll look into this as I get more traffic and become more established.

Comment by jfc
2007-12-04 22:24:01

Thanks for stopping by Brian,

Private ad sales, particularly those on a per time period basis, are a good way to make money. I thought about selling the here but I’ll probably wait until January.

The best way to make money with a blog used to be paid ‘reviews’ that passed PageRank and text ads that did the same but Google has killed that golden goose. This leaves a huge vacuum for something Google friendly to replace it.

 
 
Comment by Colin King
2007-12-07 12:52:45

I am not real in favour of behavioral targeting. Why? Seeing the same kinds of ads all the time would become boring and I would become blind to them a lot quicker.

On websites, these 125 square ads, they are all the same size and in the same place on every site. I do not see them any more. To successfully advertise you have to capture the visitors attention,

Our vision looks for patterns, once a pattern is found, mentally it has a lower “status”, while we scan for new patterns.

Comment by jfc
2007-12-07 14:18:08

Hi Colin,

That’s a good point.

The “holy grail” of advertising is developing an ad that the buyer wants to see. You want an ad that someone won’t TiVo through or block, that will be noticed and viewed with interest. That’s the goal of behavioral targeting.

The plan is that while some people would still mentally block it, a higher percentage of people would interact with a targeted ad than they currently do with Adsense or the 125’s, resulting in higher click-thru rates and sales.

I’m certainly considering dumping the 125’s I’m using here. I could put a large rectangle Adsense block there and get more clicks.

 
 
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