16 Feb Papers, Yahoo team on targeted ads
Palm Beach Post, By CHARLES ELMORE, February 16, 2009
Tailoring online advertisements to computer users – getting truck ads in front of folks interested in trucks, for example – carries high hopes and expectations for more than one industry in a tough market. Nearly 500 newspapers, including The Palm Beach Post, have joined forces with Internet company Yahoo on an advertising platform, including one program that attempts to reach consumers through “behavioral targeting.” That means online consumers who browse for information about hybrid vehicles, for instance, are more likely to notice an ad from a local dealer who wants to sell them one. One forecast from eMarketer.com last year projected the behavioral-targeting ad business to grow from $525 million in 2007 to $4.4 billion by 2012. Yahoo, battling Google and other rivals for pieces of the online advertising pie, wants to redefine the market for local advertising with the help of an industry eager for a jolt of fresh revenues itself, newspapers. “Despite challenges in circulation and readership, newspapers have the most significant local sales force,” said John Hilton, Yahoo’s senior director for U.S. partnerships. “They now have a new way of selling, and our mantra is to get the right message in front of the right person at the right time.” By themselves, newspapers often reach 20 percent or less of online users in their geographic areas, but combined with Yahoo sites can reach more than 80 percent, he said. Google remains the leader in searches and it partners with newspapers in several ways, but it pulled back on an online method for advertisers to place print ads last year. Yahoo says its alliance with newspapers for local online ads remains one of its top strategic priorities. Behavioral targeting means gathering information from tracking software such as cookies, IP addresses and other sources to build a marketing database that can include a user’s gender, income range and browsing habits. Companies say they’re not tracking specific identity. Yahoo says users can opt out of “interest-matched advertising” by choosing that option in its privacy center. Such attentive tracking of users online has rekindled privacy debates, but proponents say it’s better to match users with products and services they might want instead of clutter they do not. Some privacy advocates are raising warning flags about what they call ever-expanding commercial surveillance online. Most users have no idea they’re being tracked and placed in various “buckets” for advertisers, said Jeff Chester, executive director of the Center for Digital Democracy, a nonprofit consumer watchdog group in Washington. The Federal Trade Commission’s 48-page Staff Report on Behavioral Advertising released Thursday recommended voluntary guidelines, urging every Web site that uses such techniques to spell out clearly and concisely what they are doing and give customers a simple way to opt out. The report also recommended companies not store user information any longer than necessary to fulfill a legitimate business or law enforcement need. In a Dec. 17 policy statement, Yahoo said it will “anonymize” user data after 90 days to enhance privacy protection. Generally, consumers have already been seeing localized ads on Yahoo sites, with targeting based on Yahoo’s user data. Yahoo and the newspaper that sells the ad split the revenue. Over time newspapers hope to match online readers more closely with advertisers on their own sites as well. “The reason we chose this marketing strategy was to test our online marketing program to local markets,” said Patrice Kelty-Webster, communications manager for one local advertiser, Tire Kingdom in Juno Beach. “While we don’t have any numbers on the response, we feel that the online marketing strategy supports our overall marketing efforts.” The Palm Beach Post ranked among the top 10 newspapers nationally in revenues from a pilot program with Yahoo during the past year, according to figures from Yahoo. Currently, the Post receives approximately 10 percent of its total ad revenues online and hopes to double that figure in five years, Publisher Alex Taylor said. The newspaper also plans to launch real estate and entertainment “channels” in the spring that are designed to reflect the latest technology in bringing buyers and sellers together, he said. “The success of the newspaper business model is dependent on online advertising doubling in the not-too-distant future,” Taylor said.