Firetop

Traditionally advertising messages accompany relevant content. When I was a marketing manager this was generally the way a publisher pitched a sales opportunity to me “We’re writing an article about corporate training, would you like your training courses advertised alongside it?â€? The web has naturally followed the same model as both print and TV in this regard; even the much-admired pay per click search model aligns adverts against keywords. Behavioural targeting however is something quite different; by monitoring a visitor as they navigate a website, tracking articles and keywords contained therein, a picture can be built up of a visitor’s unique interests. This information can be used to target advertising to a visitor wherever they are on a website - based upon their prior reading preferences and not just their immediate ones.

I was putting together some rate-card prices for behavioural banner advertising this week and trying to decide whether the CPM charged should be higher, lower or the same as standard CPM rates. It’s already widely accepted that relevant adverts against relevant content achieve the best click rates compared with behavioural advertising. This is because there’s no substitute for putting the audience in the right mindset; using content in order to respond to a relevant advert. Behavioural advertising, whilst targeting people who have read appropriate content, is not as immediately relevant in the moment. So click rates are lower. A reason to suggest a lower CPM rate be charged then?

Statistics in the public domain suggest that although click rates on behaviourally targeted adverts are lower (averaging 50% less), conversions to buy after clicking are higher than content aligned advertising (50% more). That’s probably not that surprising; the audience is still historically relevant, but now they have to be that little bit more interested in the services as they’ve had time to give what they read recently more thought. Hence behavioural ad clickers are much more serious about why they’re clicking than those caught up in the spirit of relevant content. The trouble is, even if you halve the click rate and increase the conversion rate by 50%, you still end up with slightly fewer conversions than you would from content-targeted advertising.

Behavioural targeting is still advantageous in that it provides additional targeting options, but to my mind you can’t charge a higher rate for behavioural campaigns if the end result is fewer conversions. Advertisers do still have the brand association benefit, and conversions won’t be much fewer. So I settled on the same CPM rate regardless of whether it’s behaviourally targeted or content associated.

Estimated Calculations - Content vs Behavioural

50% lower click rate
50% increased conversions
 
Assuming 200,000 impressions:
Content: 0.4% CTR - 800 clicks
Behavioural: 0.2% CTR - 400 clicks
 
Content: 800 x 2% conversion = 16 conversions
Behavioural: 400 x 3% conversion = 12 conversions

Bookmark to: