Relevance, the holy grail of online advertising

BY aarrieta

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Advertising relevance turned into what all companies in the market are looking for.

Generating higher number of conversions with the lowest possible inventory, what generates more efficiency and therefore a higher return for the companies.  Since advertisers pay more for campaigns with a lower cost that generate more.

At the beginning relevance search was about technology, where it competes:

  • Predictive technology, based on statistical analysis from previous campaigns, on which it prospect future behavior campaigns.
  • Contextual Technology, where the relevance is looked upon relating the advertiser offer to related keywords related to the content that the target user is Reading/searching.
  • Behavioral Technology, where relevance is looked upon analyzing the behavior of each surfer to find behavior patterns that are associated to specific target characteristics.

So far none of this technologies are superior to other since predictive technology is the most efficient to monetize inventories without vertical text content as fotologs or some forums such as Directa Networks in Fotolog

Contextual technology is ideal to monetize editorial content (that includes even text from emails) and vertical content where relating the ad to the text is more precise. For example: a post about my holidays in Bahamas in a personal blog with AdSense  that sells cruises and hotels in the Bahamas.

Behavioral technology is the best when it has a important data base and can be combined with predictive. For example: running a campaign among credit card owners using behavioral segmentation of Directa Networks

Currently another method that the industry is experiencing with to achieve advertising relevance in campaign geo targeting in which any user with caring about the origin of the site that he or she is visiting he or she is watching local and relevant advertising. It is useless if I am in Mexico and enter the site of the newspaper El País to see ads of a BBVA contest that applies only for Spain. This is a lost impression for the media and worst paid by the advertiser.

This “geo-relevance” today is mainly achieved through the work of the networks on the principal e-marketplaces or exchanges; where the networks freely exchange advertisers and inventory looking for the best eCPM for the advertiser and the Publisher.

THis explains why Google is willing to pay multiples of 62 times ebitad (3.1BUSD) for Double Click. Or why Yahoo is rushing to buy the remainings of  Right Media for USD680 million. AdECN is rushing into opening the UK and having a critical mass to be in the picture. Or Wunderloop, another company specialized in Behavioral Targeting and profiling announce the launch of its  Exchange and Microsoft is about to buy 24/7 Real Media or how German says how long will take MSN to buy Atlas (aQuantive)?

It is not clear who is going to discover the relevance holy grail, but the way it looks, it will be later sold to the highest bidder among Google, Yahoo or MSN.

More Info: DoubleClick Advertising Exchange , Google compró Double Click, Google Buys DoubleClick for $3.1 Billion (NY Times) , DoubleClick to Set Up an Exchange for Buying and Selling Digital Ads (NY Times), Microsoft está a punto de comprar 24/7(Mariano Amartino en Ubertbin), Real Media, RMX Terry Samel, RMX y DC (Enrique Dans), DC y Google en Merodeando (Julio Alonso)

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