Some buzz these days on real-time bidding in display advertising. 

New York Times: Instant Ads Set the Pace on the Web by Stephanie Clifford
ClickZ: Real-Time Bidding: What It Is and Why It Matters by Mike Baker
ClickZ: A 10-Step Guide to Evaluating Demand-Side Platforms by Mike Baker

Bottom line: 
With real-time bidding and optimization you can get the right ad, in front of the right person, at the right time, place, and price. 

Article highlights:

“While companies have been plugging real-time bidding for a couple of years, industry heavyweights are now behind it…Advertisers say real-time bidding cuts down on wasted money. You can use less media, because you’re using more selected, or more efficient, media.”

 “Until the arrival of real-time bidding, said Mr. Mohan of Google, “the technology hasn’t really been there to deliver on the promise of precise optimization, delivering the right message to the right audience at the right time” in the display world.”

 “…match users to targeted ads based on the attributes of each ad impression.”

 “Cost efficiency… Your ad spend can go further, with less budget spent on poorly-targeted impressions.”

“…an advertiser has to receive an ad impression, analyze it, decide what to bid on it, and decide automatically what ad to show in less than a quarter of a second to avoid slowing down the page-load time. It also lets companies funnel what they know about a Web user into the ads they show that person.”

 “Actionable insights… By learning what works for your campaign at the impression level, you have a great opportunity to identify trends and discover new insights about your best — and worst — consumers, context, and creative.”

This is heaven for marketers. 

You take your converter insights from your site and build segments based on the predictive attributes of the converter.  Your media optimization agency takes the segments, finds and targets them out on the web.  Their technology will make the decision on what ad to serve, when to serve and to whom to serve, and at what price based on the target’s likelihood to convert.  You can pay $10 for segment A, which converts at 4% and $3 for segment B, which converts at 0.5%.  Or, you can reject the impression, because there is no likelihood to convert.  You get the point.  Ultimately, you drive conversions with less impressions, because you’re only showing your ad to qualified audiences.  To sum it up — cost efficient and targeted.

Anyone doing this?  Any success?

It’s stunning that only 25% of interactive marketers use behavioral targeting.  Consumers are not one-size-fits-all and expect an experience relevant to their needs. 

For instance, this evening I searched for a flight to Munich, Germany.  After reviewing the flights results page, I decided to click on “Vacation Packages” in the top navigation and got targeted with an ad about Carribean resorts.  I’m not interested in Carribean resorts.  The ad is not relevant to my needs – which was a trip to Germany.   On top of that, I’m targeted with an ad for New York vacations.  Oh my…  My experience on the site could have been more customized through behavioral targeting.   They could have made some money on me with a tour package to Munich or a vacation package to the Alps.  Lost opportunity  (speak sales).   I’m going elsewhere…

Deliver the right offer to the right consumer at the right time!

It so happens that I received Coremetrics’ “A Marketing Imperative: Profile, Personalize, and Profit” whitepaper in my inbox today.  It highlights why delivering a personalized experience can increase sales and optimize marketing.  Here are the highlights:

Despite widespread recognition of the power of personalization, only a handful of companies do it truly effectively.

According to Forrester Research, only about 25 percent of interactive marketers use behavioral targeting (a term synonymous with personalization).  That means that 75 percent of interactive marketers don’t use personalization, or use it in limited and ad hoc instances.

If budget-conscious consumers and companies grow more discriminating, it becomes more important than ever for retailers and B2B marketers to zero in on customers and prospects with content that is relevant and customized to a customer’s needs.

And studies 8 by Aberdeen of companies that have deployed personalization solutions revealed that:

• 88% of best-in-class companies say they’ll realize return on investment (ROI) from personalization
• 76% agree economic gains from personalization outweigh investment costs

Personalization should not be viewed as a one-time or ad hoc effort. It is best treated as a core business strategy and should be supported by:

• Well-defined and detailed performance goals
• A structured performance monitoring system
• A dynamic roadmap for continuous optimization
• Automation across all stages of the personalization lifecycle

“In today’s homogenized world, customers want, expect, and desire a more customized and personalized experience,” the CMO Council said…

Forrester says that “almost twice as many marketers say they’ll be using [behavioral targeting] in the next year, which would make its adoption rival that of other established forms of online targeting, such as geographic, demographic, and contextual.”

Personalization means delivering product recommendations, offers, and content based on what you know about a given customer. Done right, it means developing dynamic profiles of individual customers and demographic segments by integrating data from disparate sources.

Understanding customer behavior in real time and matching marketing efforts to what you know about a customer at a given moment gives you the best chance of delivering content and recommendations that match your customer’s interests.

Test, Monitor, Analyze, and Adapt

As dozens of studies have shown, smartly executed personalization systems almost invariably generate highly attractive ROI, enhance online conversion rates, boost average order value, and strengthen customer loyalty and retention.

Anyone still not sold on personalizing the user experience?