You may consider yourself a regular guy booking a trip to Mardi Gras, but to the 24/7 Real Media advertising network, you look like a "globetrotter" because it has watched you buy plane tickets before.
So the day after you buy a ticket to New Orleans online, don't be surprised to see an ad for luggage when you click over to that fishing Web site. And at that same fishing site, a woman shopping for her husband's birthday present might see an ad for diapers, because 24/7's ad network has pegged her as a new mom.
Transcript: .com's Leslie Walker hosted a live Web chat with Udi Manber, CEO of Amazon's A9.com search engine. They discussed the future of Web search.
This is the frontier of Internet advertising, where a bunch of young companies increasingly are tagging, tracking and analyzing us as we move across different Web sites. Their goal is to display ads they deem relevant based partly on our surfing histories, which they record using tiny "cookie" files stored on our computers, and other technology.
"With today's advanced technology, ad networks can be a lot smarter about how they deliver ad impressions than they were four to six years ago," said Rich LeFurgy, former chairman of the Interactive Advertising Bureau and an investor in Blue Lithium, one of many new networks taking form.
Count me a skeptic about these networks, even though I find their technology tricks fascinating. I doubt that advertisers will make Internet banner or skyscraper ads personally relevant until they develop tools that let us tell them our true interests, rather than surreptitiously watching what we do and drawing inferences. Then again, who is going to take the time to tell advertisers how to build better electronic billboards?
That's why this new breed of networks is working on technology that essentially tries to read our minds. They have hired mathematicians to devise complex formulas that crunch a mind-numbing number of variables. Some focus on past activities of individual Web surfers; others look at how demographically similar groups have responded to similar ads in the past. Increasingly, ad networks are blending a bit of both while mixing in traditional content targeting, which means ads are selected based on the topics that appear on pages people are reading.
Yahoo and Microsoft's MSN network have long tracked what people do inside their own Internet networks. What's different about the new ad networks is that they are seeking a more holistic view of our behavior across thousands of Web sites.
Over the past year, 24/7 Real Media Inc. and Blue Lithium are among the half-dozen companies to roll out ad-delivery systems. They compare click-through rates on ads against factors such as time of day an ad was shown, its placement on a page and how various groups responded to it. Then they crunch in additional data about what each Web surfer has read, bought, almost bought but didn't, or clicked on before.
24/7 Real Media collects no names, addresses or other personal information, but says it watches what people do across more than 800 sites where the company delivers more than 5 billion ads a month. It classifies people into eight groups, including "music lovers," "moneymakers" and "globetrotters," and analyzes behavior in 606 different interactions with content, such as a propensity to follow the National Football League.
The company released a study this month that found its special surfer groups responded in unexpected ways. People classified as "gamers," for example, clicked on ads eight times more often at health sites than when the same ads appeared on gaming sites.