Profiling Is Not the Answer

Share this content:
Internet marketing does not need to be invasive to be effective. That is the crucial point that has been lost in the recent profiling debate.

In the March 7 edition of The Wall Street Journal, DoubleClick CEO Kevin O'Connor made the argument that the future of the Internet depended on advertising. He continued to say that advertisers won't pay for online advertising if they can't be assured that their message will be delivered to a prequalified audience. And, he said that without advertising, the Web will not prosper. I agree that the Internet needs advertising. However, profiling a Web user is not the answer.

As e-commerce continues to explode, consumers are more aware of how online businesses use their information, and whether their privacy is being violated. According to a recent survey by Forrester Research, Cambridge, MA, 92 percent of consumers are "concerned," while 67 percent are "very concerned," about the misuse of their personal information online. As a result, online businesses are losing billions of dollars in potential online sales because of mistrust of how personal data is being collected.

On the surface, profiling appears an effective way to strengthen an advertising message. Profiling was designed to allow an Internet marketer to study the surfing habits of a large group of Web users and then place advertising in strategic spots to capture a more qualified audience. The theory is that profiling should result in better, targeted placement of an advertisement. In turn, profiling companies could charge their advertisers a premium rate.

That is the theory. What works in theory doesn't always work in practice. Profiling has been around for five years, with little success and many consequences. If profiling were doing its job, click-through ratios on ads would be increasing tenfold. Instead, they are declining at an abominable rate. Click-through rates have fallen to .36 percent, according to a March 2000 Nielsen//NetRatings report, while in 1998 the ratio was nearly 2 percent. Profiling does not work.

Why isn't profiling efficient? The simple reason is the Internet is a proactive medium. Its users are goal-oriented. When a Web user goes online to find information on hiking boots, he doesn't want to get barraged with ads for car insurance just because he had previously searched for information on insurance rates. The user likely sees the insurance ads as an intrusion while he searches for information on hiking boots.

A more effective, nonintrusive way to deliver a targeted audience is through contextual selling. Instead of trying to figure out a person's intention in advance and interrupting him with an ad, contextual selling aligns buying opportunities or branding efforts with the specific content of Web sites. For example, it places hiking boot ads, product images or text links on a hiking, camping or outdoor recreation Web site, thus capturing the enthusiast market. This strategy enables people and businesses to buy when their desire is highest -- when they interact with information and entertainment that interests them.

Contextual selling doesn't need to know a person's behavior on the Web. Therefore, it is not intrusive. Yet it offers online advertisers a proven delivery system for effective advertising. According to Forrester Research, contextual ads are six times more effective than banner ads. Why try to predict a Web user's action through profiling when you can count on human behavior?

Bob Pittman, president of America Online, agrees that database marketing techniques aren't the answer. In a recent New York Times article, he said, "We don't need to track people. If you want to sell cars, you talk to people when they are in the car area."

In order to preserve users' privacy on the Internet, profiling will require companies and advertisers to adhere to an unenforceable code of ethics. In the Federal Trade Commission's Privacy Online report to Congress, only 20 percent of randomly sampled Web sites complied with all four fair-information practices (notice, choice, access and security).

With contextual selling, consumers can remain anonymous while marketers get their targeted audiences. Effective online advertising doesn't need to be invasive; it just needs to be smart.

Next Article in Digital Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here

Relive the 2017 Marketing Hall of Femme

Click the image above