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Targeting Search Ads By Demographics & Behavior

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The days of targeting searchers only via keywords are coming to an end. Now search engines are giving you the ability to target searchers by age, gender and other demographics.

A special report from the Search Engine Strategies conference, February 27-March 2, 2006, New York, NY.

In addition, search profiling makes it possible to target searchers with ads long after they've done a particular search. Say someone searches for information about a new car. New programs allow you to show them ads based on that search behavior days after the initial query was done.

The latest products and strategies were covered in the "Targeting Search Ads By Demographics & Behavior" session in the Advertising Track at SES NY 2006.

Moderated by Detlev Johnson, VP, Director of Consulting, Position Technologies, the speakers on this panel included Jed Nahum, Director of Product Management for adCenter at Microsoft; Roy Shkedi, CEO and Founder of AlmondNet; Kevin Lee, Executive Chairman and Co-Founder of Did-it.com; Danielle Leitch, Executive Vice President of MoreVisibility; and Dana Todd, Co-Founder and Principal at SiteLab International, Inc.

Nahum started with an update on MSN adCenter. After going live in France and Singapore in last fall, the US pilot of MSN adCenter began in February with more than 3,500 advertisers. He announced during the session that traffic was being ramped up from 40% of searches to 70% that day. The formal US launch is expected in early summer, when searches to adCenter will increase to 100%.

He then outlined the audience intelligence process that drives ROI: Learn about your customers, connect via rich targeting, and refine your campaign.

Nahum quoted one of his customers, Matt Van Wagner, President of Find Me Faster in Nashua, NH, who said that it was "very cool that you can select time of day, and adjust bids overall for demographics so easily. To use an analogy—it's like paying a little extra for that better cut of beef."

Nahum addressed a frequently asked question: "Where does targeting and audience intelligence data come from?"

It comes from registered users who have voluntarily provided information when registering for MSN products and services. It also comes from passported Passport users who have also voluntarily provided information when creating their profile. Finally, it comes from third-party data provided by Experian—for the US only.

Shkedi spoke next. He cited a January 2005 report by the Online Publishers Association which found that 40% of Internet advertising dollars are spent on search engines, where people spend less than 5% of their online time. On the majority of the sites where people spend the "other" 95% of their online time, ads are sold for very low CPMs.

Shkedi said AlmondNet presents people with additional paid search ads—after they search—on the sites where they go "post search."

He said that post-search ads benefit web users by presenting them with relevant ads while maintaining their privacy—because no personal identifiable information is collected. It is all cookie based. He also said that publishers' sites benefit by receiving a higher return on their banner ad space.

Shkedi said advertisers benefit, too. They get more opportunities to reach consumers beyond search results pages and reach consumers at multiple stages of the purchasing cycle. Finally, clicks originating from behaviorally targeted ads using recently conducted searches convert 5 to 10 times better than clicks from non-targeted ads.

Shkedi concluded, "As the world shifts to niche, vertical content, searches on vertical sites are more detailed than searches on general search engines and therefore more valuable."

Lee was the next speaker. He said, "Better targeting brings us closer to the holy grail of advertising." Marketers get to put more of their budgets towards their best prospects. Searchers only see the most relevant ads. Publishers get a higher yield on their search and impression inventory.

He said they key was to identify the "power segments" that provide better conversion, higher immediate value, and better lifetime value. This drives a dramatically higher ROI and profit. Plus if your better customers are worth twice as much or convert twice as well, you should be able to bid more for them and still make huge profit gains.

To determine the optimal demographics and behaviors of power segments, Lee recommended looking at your immediate conversion rates by geography or time of day, doing an analysis of your current customers as the convert for male versus female and age, and using your CRM or business data.

If a power segment uses certain keyword phrases, you can look at which sites show up high in organic listings, and find out if these sites belong to a contextual ad network or sell advertising directly.

Lee concluded, "There are only two kinds of marketers at the top of the PPC search results." The first are "brilliant marketers," who are managing to ROI or buying intelligently through segmentation. The second are "total lunatics," who are emotional bidders with no data.

The next panelist was Leitch. She said to ask yourself, "Do I know my customer base?" If you know the gender, geography, lifestyle, income and age of your customers, she advised using that information to boost your bids. If you don't know this information, Leitch added, "Incredible enhancements can be made to your keyword analysis and selection process using this data."

She recommended using the adCenter demographic data to make decisions on which bids to boost. It can aid in keyword selection by finding alternative or additional terms with similar demographic profile matches to your customer base. The data can also help you uncover what your demographics really are and discover why some terms may not be working in your campaign. Finally, she recommended using adCenter data to identify the trends, cycles, and patterns, and other areas of campaign expansion or optimization.

Leitch cautioned that user behavior and patterns will not all make sense or be 100% accurate. The data is only as good as the information provided for use in demographic search options.

Still, she concluded, "The trends that become apparent through the demographic or behavioral data now available will be eye opening."

Todd was the final speaker. She talked about Yahoo Fusion Marketing and shared a case study from Hot Spring Spa.

Yahoo Fusion Marketing is the broad name for any of the integrated ad products on the Yahoo site and network. It targets consumers with specific affinities and interests derived from online behavior. This includes terms searches, pages visited, ads clicked, and products bought. It lets you target by specific category or by "impulse."

Yahoo's behavioral targeting methodology can identify if user visits a flowers Flowers category shopping page, searches on a flower-related term, and clicks on a flower ad in a 28-day period. The combination affects ad display weighting, and may trigger a Yahoo Mail ad selling flowers.

While Hot Spring Spa had been using keyword-targeted banners in search since 1997, their performance was dropping dramatically, and keyword banners were being discontinued.

Todd said, "We decided to give behavioral units a try." They used Yahoo Fusion Marketing, ran "Monsters" and other ad units, targeted ads within Yahoo Mail and several vertical categories, and animated most units with Flash.

"After a hiccup-y start, units started performing better than ever before with fewer impressions," she said. "Spiking the budget seemed to help the system because of the additional user data gathered," she added.

Todd concluded that Hot Spring Spa saw "high CTRs compared to other general placements" and the "email units performed surprisingly well."

Greg Jarboe is President of SEO-PR and writes a news blog. He's speaking at SES Canada '06 about "Balancing Paid & Organic Listings" and "RSS, Blogs & Search Marketing."

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