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Online ads targeted by offline data October 18, 2007

Posted by jeremyliew in ad networks, advertising.
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Wednesday’s WSJ has a fascinating article about how Acxiom mines offline data to target online ads. It’s the most targeted and data rich approach to targeting online ads that I’ve heard of or seen and I’m very surprised that it didn’t get more blogosphere coverage.

Acxiom’s new service, Relevance-X, goes further, drawing on the company’s database of 133 million households to determine which ads to show. Acxiom’s consumer database includes information gleaned from sources such as public real-estate and motor-vehicle records, surveys and warrantee cards consumers fill out. Estimates of annual income, marital status, average ages of kids, home ownership and property value, educational level and travel histories are also available.

The company classifies each U.S. household into 70 clusters based, it says, “on that household’s specific consumer and demographic characteristics, including shopping, media, lifestyle and attitudinal information.” Clusters range from “Married Sophisticates” to “Penny Pinchers.”

Acxiom contracts with Web sites that collect consumer addresses, such as online retailers and those offering sweepstakes and surveys. In a blink, Acxiom looks up the people who provide their addresses in its database, matches them with their demographic and lifestyle clusters and places “cookies,” or small pieces of tracking data, on their computer hard drives.

When those people visit Acxiom partner Web sites in the future, Acxiom can read cluster codes embedded in the cookies and use them to pick which ads to show. The company doesn’t disclose the sites that carry such targeted ads, but says they reach 60% of U.S. Internet users.

That allows a company selling an expensive antiwrinkle cream, for example, to contract with Acxiom to display its ads to affluent women 40 years or older in the “Skyboxes and Suburbans” or “Summit Estates” clusters.

Wow.

Acxiom says that there are no privacy concerns because only gender, zip and the segment that a person belongs to are stored in the cookie and used to target, and segments are all at least 1m people. Personally, I don’t see why there should be any privacy concerns for online targeting since this same data has been used to target offline advertising for a long time. But this is exactly what caused Doubleclick’s acquisition of Abacus Direct to come under huge scrutiny in 2000, and led to the subsequent spin off of Abacus.

This data could have a significant positive effect on industry wide CPMs if its targeting can really improve the effectiveness of online advertising.

Comments»

1. will - October 20, 2007

I’m amazed too . . . maybe people are slowly being desensitized by all the social networks wrt their privacy info?

2. Jud Valeski - October 20, 2007

wow is right. someone’s pounding through all the hard work of stitching together the offline paper trail we all leave; hat’s off!

3. Pascal Van Hecke - Daily Links » 2007 » October » 20 - October 21, 2007

[…] Online ads targeted by offline data “Acxiom’s new service, Relevance-X, goes further, drawing on the company’s database of 133 million households to determine which ads to show… The company classifies each U.S. household into 70 clusters” (tags: advertising privacy marketing databases) […]

4. Casey - October 25, 2007

Helpful post and I agree with the surprise that there hasn’t been more chatter about it. But then again, here in the U.S. consumers, IMO, are surprisingly unconcerned and often unaware of data, privacy and security concerns. Many citizens and countries in Western Europe take a very different stance and are much more protective of such data. ANYWAY, not meant to be a civics post here…

Reason for my post is that I’m struck by the lack of dialogue about implications for DYNAMIC PRICING (sometimes called targeted pricing or discriminatory pricing, depending where you may sit in the debate). Doesn’t anyone recall Amazon’s experiment about 7 years ago?
I think many just are unaware or shrug it off (as inevitable?). Interesting study released by the Annenberg Center at UPenn a couple years ago on this topic:
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1245

I know that dynamic pricing has existed for quite some time (e.g., different pricing in different countries, etc.), however I believe that we’re now in a landscape where it can occur on a more massive scale in terms of frequency, micro-targeting (similar to airline seats, where you may pay much more than your seatmate, though historically that has been tied to yield management algorithms related to inventory, timing, etc., not your personal wallet and price elasticity), etc.

Just thought it seemed relevant to the topic, as I know that some companies use ad-servers (Atlas, etc.) to serve content as well as ads.

5. Casey - October 25, 2007

clarification on above post:
the present targeted pricing on airline seats would seem primitive compared to the dynamic pricing possibilities available with layering in additional consumer-specific data (or even just their “veiled” categorization label according to demographic/psychographic labels).

6. Rob Leathern - November 2, 2007

There’s a long history and lots of experience that direct mail guys and offline marketers have with these types of segments, Claritas PRIZM clusters etc. so this is really not new news. The new part of this news is being able to tie together a network of partners, mostly large ad networks I would assume, that together can get you to a significant reach number. Also the aggregate user numbers are much more interesting today than they were 7 years ago, leading to some obviation of too-small-targeting group concerns.

Consumers still haven’t acquired a (dis)taste for being more inquisitive of how and where their information is showing up and being used but my sense is this will change because inevitably, there are emergent properties of this type of data aggregation too… and it may be too late once people do realize that the toothpaste is out of the tube data-wise.

7. Acxiom Bringing Relevance-X to a Cookie Near You - November 2, 2007

[…] commented on the Jeremy’s (Lightspeed Ventures) blog post concerning Acxiom’s new consumer cookie tracking network.  The WSJ article he quotes […]


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