Behavioral ad targeting isn’t that big a deal

It looks like behavioural ad targeting is not really what it’s cracked up to be after all.

According to the Wall Street Journal, a new academic study conducted by researchers at the University of Minnesota and Carnegie Mellon suggest that publishers only get 4% more revenue for an ad impression that has a cookie enabled vs ones that don’t.

The study tracked millions of ad transactions at a large U.S. media company over the course of one week.

According to the publication, “ad tech tax,” the middlemen fees consume at least 60 cents of every dollar spent on programmatic ads, according to marketing intelligence firm Warc.

The online ad ecosystem is complex and opaque, said Alessandro Acquisti, a professor of information technology and public policy at Carnegie Mellon’s Heinz College.

It is “hard to understand how much value each participant in the ecosystem is adding to the process, and whether the fees different intermediaries receive are commensurate to their value added,” he said.

In a lot of ways, tech giants like Google, Facebook and Amazon have been driving this shift towards behavioural targeting.

According to eMarketer Inc, in the US alone, digital ad spending from the duopoly of Google and Facebook accounts for at least 58 percent of total ad spend.

A recent report by marketing and e-commerce research firm Econsultancy found that 40% of digital publishers’ display ad revenue was stagnant or shrinking.

Since 2018, many of the largest digital publishers have been forced to downsize and explore consolidation as growth has stalled.

Speaking to the publication, Michael Zimbalist, the chief strategy and innovation officer at Philadelphia Media Network LLC, says that the value of behavioral advertising to publishers was always misrepresented.

“Behavioral targeting has been completely overhyped in its value for publishers from the day it was first invented,” he concluded.

Source: Wall Street Journal