Thursday, October 19, 2006

AdSense will not do behavioral targeting?

In a recent interview, Kim Malone (Director in the AdSense group at Google) said, "Behavioral targeting is not something that Google [AdSense] will do."

Kim could not be more clear in this outright, flat denial, but I simply do not believe it. There is too much to gain. Ads targeted to individual behavior are more relevant, useful, and interesting to users and convert better for advertisers.

If Kim is telling the truth here -- if Google really will not get into behavioral targeting -- I would say this represents a beautiful opportunity for Yahoo, Amazon, and Microsoft to trounce AdSense. Use a little more data, pay a little closer attention to what people want and need, and your ads will be more relevant and less annoying that Google's contextual ads.

While they have been painfully slow to execute, Google's competitors are moving on behavioral targeting.

Microsoft adCenter lets advertisers target ads "to the customers most interested in your products or services." Microsoft adLab, the research arm of adCenter, says their goal is to "change online advertising dramatically in areas such as paid search, behavioral targeting and contextual advertising", claims they have "years of profiling, user behavior, and data mining", and asserts that they "know a heck of a lot more about their audience than Google knows about its own."

Yahoo has been working with Revenue Science "to show text listings on Web pages based on user behavior." Yahoo also recently launched their Panama ad system which, according to Danny Sullivan, will include "audience targeting based on factors that could include demographic information or online behavior" in "future versions."

Amazon Omakase targets ads "based on what the Associate has been successful with in the past; what that user has been interested in; and what the site is about." In my opinion, other than Findory, this is the most dramatic example of fine-grained behavioral targeting out there right now. The Amazon Omakase ads I see on other websites are eerily relevant, targeted to my purchase and clickstream history at Amazon.

It is unbelievable to me that Google is not pursuing behavioral targeting. But, if Google is not pursuing behavioral targeting, it is clear that its competitors cheerfully will.


Anonymous said...

two points.

(a) amazon's relevancy goes to the dogs
pretty quickly when you do a bunch
of gift purchases ... i get some
pretty wacky recommendations if
i buy some random gifts or even
browse around in categories that
i'm not normally interested in.
so the relevancy of behavior targeting
may be restricted to pretty
short time ranges, in which case
the content being viewed or
the search session might be as
useful for targeting as short-term

(b) if behavioral targeting produces ads that are not connected to a
search term or page content, then
not only can they be pretty irrelevant, but they might
border on creepy and intrusive. instead of
showing ads targeted to what a
user is interested in right now,
you might be targeting something
that they did earlier in the day
or last week or at some random point in the past. they might start
wondering why, and resenting, that
the purchase of an espresso machine at amazon is following them around the web when they see ads for a coffee grinder on a slashdot article about net neutrality. behaviorally relevant but contextually irritating and creepy ...

Greg Linden said...

I agree, Anonymous. The trick is to get ads that are well targeted to the context and history.

Amazon Omakase is not there yet, but is an impressive step in the right direction. The fine granularity of their behavioral targeting is unmatched by any other effort, but they do need more work to make sure the ads are appropriate and relevant given the context and the user's current state of mind.

Anonymous said...

Ok.. Whole lot of people might kill me on this (including greg).. but, I really want to know (some statistics, may be) how many people would actually click on these "personalized" and "behavioural" ads and buy some stuff. For example, I never clicked on any Ad that is displayed on google search page or any other web page that I visited. I might be dumb enough not to cash on such Ads tagetted to me but I want to know how many users really bought something and how many companies benefited from this. A real statistic would help me in getting my fingers straightend.

Anonymous said...

Shirish--How about the $10 billion in annualized revenue that Google just posted. I'd say a few people are clicking.

Anonymous said...

Shirish - I used to have the same question as I rarely click on any ads. However, because of the large volume of traffic, a very small amount of clicks will still translate to nice profit. You might want to go view the Google video on AdSense in one of Greg's recent posts.

Interestingly, two days ago I was searching using Google for commerical solutions that are based on Lucene, and the ads were more relevant than any of the top-ten hits.

Anonymous said...

Oh! Ya..definitely Google is making a whole lot of money.. But, I am wondering about the companies who are paying Google.. Ofcourse they are not dumbers to pay Google billions .. I just wanted to know some example numbers to get a sense of whats happening..