Benefits of Internet Big Brothers’ Behaviour

The internet is not anonymous. Google, Yahoo and AOL record your search information for up to eighteen months after you first click the “search” button; but whilst this may conjure up images of a Big Brother-esque state the reality is more positive. Few would object to the information being used to find terrorists or serious criminals, and there are benefits even for the average consumer. Some websites are fostering a “village store” mentality; they build up a relationship with their customers based on past shopping habits and recommend items of interest to them. The customer loves rock-music; an ad appears reminding them of their half-price sale on all rock albums. Sites suggest that, having bought a new car, useres might check out another site offering great deals on car insurance. This service, known as behavioural targeting, has come about through monitoring browsing history, sometimes from the moment you log on to the internet. It has become a contentious issue in marketing as issues of privacy war with those of profitability.

Behavioural targeting works by monitoring your internet activity across various websites and then recommending things you may be interested in through advertising. There are three different types: first-party targeting where user behaviour is tracked by means of a cookie on a specific website; "network" advertising where sites contract with each other to share the data about user journeys; and the most contentious: ISP based behavioural targeted advertising. Whilst ISP networks operate on the same principles as the previous two, the data gathered is more comprehensive. ISPs can intercept users' browsing activity, putting each user into a box that broadly and anonymously categorises them, and gives them ads based on which "box" they are in.

The benefits of this targeted marketing for companies are obvious. By focusing their advertising they ensure their message reaches their target audience, generating better responses and cost-effectiveness. Network advertising also allows them to reach audiences outside the immediate context of their website, increasing the frequency and relevance of visits to their site. It ensures relevant messages reach consumers and lessens the chance of them being bombarded with irrelevant marketing messages or “ad spam”. Estimates suggest that the average consumer receives almost 600 million marketing messages a day, and according to a 2009 Microsoft report 97% of all email sent is spam. Relevant advertising lessens the chance of customers simply consigning emails to their spam box, or ignoring online ads. As 24/7 Real Media’s Dave Hill succinctly says, “It is about giving the consumer as much relevant advertising as you can, via addressable mediums".

The success of behaviourally targeted campaigns is normally measured in terms of direct response – how many people actively respond to the advert – rather than in brand awareness, meaning it’s difficult to build a subtle picture of its effectiveness. Concerns also revolve around issues of privacy; this anxiety has led to Dr. Larry Ponemon’s of the Ponemon Institute’s report that 98 percent of companies curtail investment in online behavioural targeting because of “consumers' privacy fears”.
One approach to alleviate these fears is transparency about the company’s approach to advertising. There is pressure on them to be honest about their intentions, an emphasis which has resulted in the creation of the “Power i” icon. This is a little “i” which will appear on adverts which use demographic and behavioural data to target consumers. Clicking on the icon will take consumers to a website where they can find more information about how the advertiser used their Web surfing history and demographic profile to recommend them the ad.

In Dr. Ponemon’s interviews with 90 senior marketing managers from large organisations he found 63% reported that behavioural targeting was the best “rate of investment” generator of any marketing tactic. The clear potential of this approach cements the need for corporations to work out a policy which will protect and educate users as to the method behind targeting whilst still generating good returns for the organisation. Transparency also helps the consumer trust the advertiser, improving brand-image and allowing them to see the benefits of adverts which are relevant only to their tastes. Cloud-based programmes like Spotify, which openly acknowledges that it uses users’ music tastes and basic personal information to choose which adverts they hear, provides the positive face of behavioural targeting and a model for other companies.

Pre-roll inoculates against viral risks

Kylie Minogue writhing provocatively, drumming gorillas and a man fighting a bear for salmon - the one thing they all have in common is that they are successful viral video adverts, for Cadburys, Agent Provocateur and John West respectively. These classics are instantly recognisable; but there are hundreds of viral videos which languish in the depths of the internet, never to be seen. If viral videos are the flashy, fading face of internet advertising pre-roll adverts - short, un-skippable clips which appear prior to online videos – are the ambitious rising stars. Pre-rolls have played crucial roles in campaigns for FRANK, the Metropolitan Police and T-Mobile, and Cisco’s prediction that 90% of web traffic will be video by 2013 means eyes are increasingly turning towards their marketing potential. Pre-rolls success has led to interest in developing other forms of online video advertising, and increased focus on assessing their effectiveness.


Pre-roll advertising is targeted predominantly at the younger demographic as they form the largest percentage of online video viewers. Content providers like Channel 4 capitalize on this by featuring demographically-sensitive pre-rolls before the videos hosted on their sites. The “on-demand” format of these websites means that these videos target an engaged user; accountability is also increased as viewers cannot normally skip the advert. However, the biggest benefit of online pre-rolls is their interactive component: links they provide mean ad-viewers can take direct action on the videos they watch.

There are limitations in the pre-roll format, the most obvious of which is that users may resent being forced to watch an advert. YouTube’s ‘biz blog’ says as many as 70 per cent of viewers abandoned a video when confronted with long, non-skippable pre-roll commercials. However, the majority of YouTube is user generated content, meaning there is less demand for it and thus less impetus to watch the pre-roll. Companies like Tremor Media have recognized this limitation and only include pre-rolls on high-demand premium context. To avoid the viewer becoming bored their adverts are only 15-20 seconds long, acting as a 'teaser' and offering the viewer the possibility of viewing the full-length ad or visiting the advertiser's website. Proctor & Gamble, Universal Pictures, Microsoft, and Ubisoft have all participated in Tremor Media's beta test of these new pre-roll formats.

Many companies are anxious about investing in pre-rolls. As Viral Advertising’s Matt Smith highlighted in a recent NewMediaAge article,”A lot of people in agencies still think online equals cheap as far as film is concerned,” despite advances like YouTube HD. AOL Media Network’s Janet Balis highlights the limitations of corporate imagination when it comes to pre-roll advertising, arguing "Most are looking to buy 15- or 30-second pre-roll, not because it's the most interesting thing people want to be doing, but because there are real challenges to transitioning online. A lot of people want to innovate, but it's challenging to do that on a broad scale".

There is a lack of quantifiable data on the effectiveness of online video advertising. Evaluation normally comes from “last-click” measurements – counting how many people actually clicked on the link - which only reflects people who directly reacted to the advertisements. United Internet Media’s Head of International Business Eric Urdahl says that, “[The internet] is still considered by a lot of brands to be more of a direct response medium than for branding. The problem is measurement, which has been established for performance-based campaigns... But brand advertising affects the entire purchase funnel and you can’t measure the effect of the campaign just by the last click.” Research shows that audiences respond to 10% of all rich-media ads, compared to the 0.4% they actually click on, meaning relying on clicks isn’t necessarily reliable and companies’ fears may be misplaced.

The unpredictability of what will and won’t become an internet sensation means viral videos are a risky approach to online video strategy. For every drumming Cadburys Gorilla there is something like Sony’s faked 2006 Christmas campaign for the PSP, which saw the brand condemned by as “a hideously soulless marketing company”. Pre-roll provides a far safer alternative whilst still having the potential for as much creativity and impact. One reason the potential of “pre-roll” isn’t being capitalized on, is succinctly summed up by Tremor Media UK’s Managing Director Adrian Lacey, “Creative companies are proving to be rather uncreative about the potential of online video”. His proposed solution can apply to the advertising industry as a whole: “[Companies] need to be less conservative and think about the fun they can have by creating online video ads, as well as understanding the engagement and interactivity offered by the formats”.