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Behaviorally Targeted Online Ads Get Better Reception than Contextual

Online consumers are consistently more receptive to behaviorally targeted ads than to contextual advertising - with behavioral targeting (BT) outperforming contextual by as much as 22% in some categories - according to a study on consumer receptivity to online advertising, conducted by JupiterResearch and commissioned by Revenue Science and AOL.

Moreover, the behavioral-targeting-receptive audience is a higher-value segment than contextual-targeting-receptive consumers, according to the study, which found that 93% of the BT-receptive audience have shopped online.

“We’re glad to see that the voice of the online consumer echoes our position that behavioral targeting is more effective - for advertisers, publishers, and for consumers - than contextual advertising,” said Marla R. Schimke, VP of marketing at Revenue Science.

Among the key findings of the study:

• Overall, two-thirds of online users have taken actions as a result of viewing online ads.

• Across all advertising, 14% more online consumers are more receptive to behaviorally targeted ads than to contextual ads - 63% vs. 49% of the total audience.

• BT outperforms contextual advertising in terms of consumer attention by at least 10% across 14 major product categories, from Financial Services to Consumer Electronics to Pharmaceuticals to Fashion and Style. For example:
  • 17% more online purchasers of computing products are more receptive to behaviorally targeted ads.
  • 18% more online auto purchasers are more receptive to behaviorally targeted ads.
  • 20% more online telecom purchasers are more receptive to behaviorally targeted ads than to contextual ads.
• Attention-getting behavioral targeting is preferable because more than 75% of online shoppers shop only once per month or less - and the majority research a product only once or twice before buying.

“Due to the level of consumers’ online activity, marketers have to maximize a limited opportunity to move consumers through the purchase funnel,” Schimke said.

The study also found that BT-receptive consumers are a higher-value audience:

• Behaviorally receptive consumers are more likely to have a higher income, spend more money online, and shop online more frequently than others.
• Behaviorally targeted ads fare better among both high- and low-online spenders:
  • Among people who spend more than $500 online annually, 10% more were defined as behaviorally receptive.
  • Among people who spend less than $500 online annually, 17% more were defined as behaviorally receptive.

About the study: 2,035 people were surveyed by JupiterResearch in April 2007 on what types of advertising drive interest and action, as well as their receptiveness to different advertising. The survey instrument consisted of 25 questions.