Thursday, November 18, 2004

Intent marketing

Charlene Li at Forrester writes about personalized advertising, which she labels "intent marketing":
    Today, publishers announce that they have content and an audience that is attracted to that content – so if you're a marketer interested in that audience, the publisher will sell you access to those users in the form of advertising at a specified price. The onus falls to the marketer to figure out where the audience is, hence the important role of media buyers and ad agencies.

    In the future, marketers will announce that they want to reach a certain segment – let's say, women in-market for a car – and are willing to pay $25 per qualified lead. The onus now falls to the publisher to deliver that audience to the marketer. Publishers will be able to see what the "bids" are within the system for a particular user profile and optimize their ad serving to maximize revenue per page.

    This is the development of what I call "intent marketing" where the marketer targets intent, in this case, inferred from past behaviors.
I'd like to see this go one step further. I'd like to see the entire process of targeting advertisements handled as an optimization problem.

In this future, marketers create a large pool of advertisements with specific segments in mind for each ad. The advertisements go out on the network of publishers, mostly showing to people who match the segments, but also sampling related segments outside of the marketers intent. Quickly, the advertisements focus in on narrow clusters of readers who are interested or, if no one seems interested, the advertisements are dropped completely.

I'm not alone in having this vision. Many have talked about it. But it's quite a challenge to implement. It requires a massive amount of data, only possible at scale.

But Google AdWords seems close to doing it. They suggest alternative keywords, show ads for queries that aren't exact matches to the specified keywords, and drop ads that perform poorly. The next step is to use the vast amount of data they have on what ads are effective to start showing ads for other keywords than what was specified and to further narrow the targets when responsive audiences are found.

Already, I click on Google ads much more than other ads because they're relevant, especially when I do a Google search for a specific product. Perhaps advertising actually can be informative, unobnoxious, and useful.

See also my earlier post, "Bringing sense to web advertising".

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