Online Ad Panelists Take Targeted Jabs

NEW YORK–Amid growing pressure for online advertising to deliver better results, panelists squared off over ad targeting at Jupiter Communications' third annual Online Advertising Forum last week.

Among the issues: whether or not information gathered through forced site registration is accurate and valuable enough to outweigh resulting traffic losses.

“There are barrier and attrition issues [to forced site registration],” said Chris Neimeth, director of sales and marketing for New York Times Electronic Media. “We do see that some people come to our home page and don't continue past the registration page into our Web site. However, the people who come to New York Times on the Web spend more time there, come back more often and view more pages than people going to other news and information sites.”

Neimeth said claims 4.5 million registered readers. He said the ability to help advertisers make relevant offers to consumers and reach readers using e-mail far outweigh the barriers and attrition that result from forced registration.

Seth Godin, president of sweepstakes marketer Yoyodyne, Irvington, NY, countered that much of the current discussion surrounding targeted online advertising is flawed because it is based on principles from traditional marketing that don't apply online.

“The main reason that people are targeting is because that's what direct marketers are used to doing. The reason you need to target in the offline world is because stamps cost money, paper costs money, printing costs money and sending a letter to the wrong household is very expensive. In the online world, those rules are totally gone,” Godin said, adding that there is valuable psychographic information available online that is unavailable offline. “I would much rather know that someone has just visited three men's clothing stores than know if they're a man or a woman. It's irrelevant to me what their gender is. I care much more about their behavior.”

Godin said Yoyodyne asks for as little data as possible up front and then extracts more over time. Neimeth countered that data-collection methods depend on specific marketers' needs.

“There is no one right way to collect data online,” Neimeth said.

Godin then said the panel's discussion of online ad targeting was ahead of itself because too many marketers aren't testing.

“Marketing online is a process, not an event,” he said. “[The Internet] is the greatest direct marketing vehicle of all, and people aren't using it that way. They're using it as some sort of broadcast event. If you're not testing 10 different home-page approaches and 10 different registration-page approaches every two weeks, you're wasting money. We once tested 40 sign-up pages in 24 hours because the Internet makes it easy to do that, and our yield went up by a factor of 12.”

Neimeth said that database segmentation is still key to effective online advertising.

“How can we effectively call ourselves marketers if we can't gauge the value of the people who come to our site?” he asked. “Targeting and the ability to reach individual people as opposed to buying page views and clicks is one of the most effective ways to reach people online. People should be buying clickers as opposed to clicks, and viewers as opposed to views.”

Meanwhile, Jupiter, New York, further underscored the urgency of the issue by releasing a statement contending that the growth of the advertising pie will be increasingly dependent on the successful introduction of real targeting.

“The Web has long held this promise of being the ultimate one-to-one marketing vehicle, but currently sites are often unable to provide advertisers basic demographic data — age, sex, income — which is standard supporting evidence for charging higher CPMs in traditional media,” said Jupiter senior analyst Evan Neufeld. “The current crop of deals between ad targeting technology vendors and major Web sites and other tech players should serve to accelerate the development of targeting, but the time to move was yesterday.”

Other panelists were Steve Markowitz, president and CEO, Intellipost Corp.; Steve Snyder, president and CEO, Net Perceptions; Daniel Hamburger, general manager of interactive media at Metromail; and Chris Escher, vice president of marketing at Liveworld Productions.

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