The only advertiser named in the 24/7 study was Starwood Hotels, which ran a 45-day campaign promoting its hotel spas. Half the ads were targeted to "globetrotters," or surfers identified as travelers, regardless of which site they were visiting. The other ads were shown to everyone visiting travel sites. The result, according to 24/7, was a 22 percent higher click-through rate for ads shown to the "globetrotters" than for ads shown in travel sites.
Blue Lithium founder Gurbaksh Chahal said his network takes a "self-healing approach" by continually analyzing click-through rates of people and ad locations. It removes ads from Web sites where click-throughs are low. "It finds out what is working in real time," he said.
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.
Most of the ad networks also are experimenting with revenue models, and several already are highly profitable.
One large targeting network called Fastclick of Santa Barbara, Calif., held an initial public stock offering two weeks ago. Fastclick is huge. It says it served more than 200 million ads a day across 8,000 sites to 113 million people in February, reaching 71 percent of the U.S. Internet population. After an initial pricing of $12 a share, Fastclick shares slumped, closing yesterday at $11.
Also entering the targeting frenzy is Claria Corp., formerly known as Gator Corp. Claria said that in two weeks it will launch an advertising service that tracks user behavior. Claria has already signed up 200 advertisers for its new service, said Scott Eagle, a senior vice president. Claria tracks Web surfers far more closely than most ad networks do, using "adware" that about 40 million people have downloaded to get other free programs.
Debra Aho Williamson, senior analyst with the eMarketer research firm, said privacy concerns and worries about data-sharing could keep such networks from becoming the predominant method of delivering Internet ads. A recent eMarketer survey found that 57 percent of Internet users objected to the idea of networks tracking behavior across different sites, even if they collect no personal information.
I don't find anonymous ad targeting intrusive or offensive. I just don't believe the formulas for predicting behavior based on what people bought or read in the past are smart enough yet to revolutionize advertising.
Still, advertising has been so broadly targeted to fuzzy demographic groups for so long, even a slight boost in relevance would be a welcome change for advertisers.
Leslie Walker's e-mail address is email@example.com.