If you are looking for a customer, in the past you had to peer through a publisher’s window. A marketer trying to reach upscale men interested in finance, for example, would logically place ads in The Wall Street Journal. Marque publications and web sites controlled elite, special audiences, so the ads weren’t cheap.
Ah, but this model is changing, and the dark irony is web publishers may face the same threats that newspapers do today. New online tracking systems are beginning to connect the dots about everything you, as an individual, do online — and now they can serve ads by placing cookies on your computer, following you across thousands of web sites, and forgetting about the marque publishers that used to control niche audiences. OMMA predicts that by 2012 nearly one-quarter of all U.S. display ads will use behavioral targeting.
The trend is growing complex and war-like. ValueClick, for example, is one retargeting network with more than 13,000 web sites. Clients who place an invisible pixel inside a Flash banner ad can then place that ad on a marque site — for example, WSJ.com — to trigger ValueClick retargeting. When a consumer visits WSJ.com, they may not click on the banner ad, but the ad puts tracking onto that consumer’s computer — and then a series of subsequent ads can “chase” that individual consumer every time they enter the broader ValueClick network of other web sites.
Whoops, WSJ. The retargeted ads cost less.
This is delightful for advertisers because the retargeted impressions cost only a fraction of the original, expensive, marque site ad. Consider that some WSJ.com banner ads cost $60 or more for each 1,000 ad impressions; ValueClick’s retargeting costs less than $4 per 1,000 impressions against the same audience. If you are an advertiser, you just figured out how to reduce your costs by 93 percent. But how does The Wall Street Journal feel about an outside force identifying, and in a sense, lifting away its precious readers?
We’re researching these new trends, and how major online publishers might defend themselves, for a future national news column. If you have your own ideas, please share. The cost savings are obvious; the strain this will put on broader online publishing and ad revenue models is far more complex.
Photo: Simon Pais-Thomas