Behavioral Targeting Doubles Ad Effectiveness

behavioral targetingWhile behaviorally targeted ads have been heavily criticized by privacy advocates, the data from a 2009 Network Advertising Initiative (NAI) study suggest that they will continue to be used by marketers and publishers.

Here are the 2 main highlights from that 2009 NAI study.

1. Behaviorally targeted ads have higher conversion rates than regular ads.

conversion rates of behaviorally targeted ads

eMarketer indicates that among users who clicked on a behaviorally targeted ad, 6.8% converted. That compared with only 2.8% of those who clicked on a run-of-network ad.  That means that  behaviorally targeting doubles the effectiveness of an online ad.

While it appears that ad clickers found behavioral ads more relevant (hence the higher conversion), this is just a hypothesis because the NAI did not study how likely they were to click in the first place, a key component of effectiveness. Still the data strongly supports that those who click, convert at a higher percentage than that of regular ads.

2. Behaviorally targeted ads are more expensive than regular ads.

average cpm worldwide for online display ads

This is not a surprise. Better conversion rates mean higher CPMs.

The 2009 NAI study shows that CPM rates were significantly higher for behaviorally targeted ads, with the average price of a behaviorally targeted ad 2.68 times greater than that of a run-of-network ad.

Takeaway

Behaviorally targeted ads have high value  to both publishers and marketers so they will continue to be used, despite the criticism from privacy groups.

Damian Davila

Ideas and concepts from Damian Davila, Ecuatoriano thriving in Hawaii. Pro marketer and blogger. Find him at @idaconcpts on Twitter.