Visitors to The Wall Street Journal Online today will become the latest lab rats of online advertising, as the Web site starts grouping them into classes like "car buffs" and "consumer techies," all the better to serve them ads for Lexus or NetFlix wherever they may roam on the site.
Sending ads based on interests usually requires users to register personal information with the individual Web sites. But the Journal Online is joining a growing group of online publishers in adopting technology that can classify users merely by monitoring where they click.
The effort, the latest tentative step in the herky-jerky evolution of Internet advertising, contrasts with another increasingly popular approach: intrusive ads that unexpectedly jut into articles or cover most or even all of the screen.
Such intrusive ads have many fans among marketers. But there are worries that users will resent sites that permit ads to interrupt them too often, and that news sites will risk their credibility if the boundary between advertising and editorial content becomes too faint.
"It is not the way Web sites should be going because it's undermining the very nature of the Web," which offers instant gratification and usefulness, said Jakob Nielsen, a principal at the Nielsen Norman Group in Fremont, Calif., which researches user behavior online. With behavior-based ads, he said, "the challenge becomes, how good can we become at finding out what they want and need? If we do that, there's going to be no need for that disruptive full-screen advertising which says, `We don't care what you were doing, we're going to slam you with this thing.' "
Getting it wrong could halt a fledgling rebound in online ad spending that may finally be getting under way. A new report from the Interactive Advertising Bureau indicates that ad spending online rose to $1.6 billion in the fourth quarter from $1.5 billion in the previous quarter, the first quarter-over-quarter increase recorded by the bureau since 2000.
Another research group, the TNS Media Intelligence/CMR unit of Taylor Nelson Sofres, reported that Internet advertising totaled $1.5 billion in the first quarter of 2003, up from $1.4 billion in the same period last year.
Offering advertisers another way to slice up the audience was another way to fight for those ad dollars, said Randy Kilgore, vice president for advertising, marketing and sales at the Journal Online, part of Dow Jones.
In the past, auto marketers, for example, could try to reach readers shopping for cars by placing ads near relevant content, like the Journal Online's leasing calculator. "But I don't stop being into a car just because I left the leasing calculator page," Mr. Kilgore said.
To that end, visitors to various parts of the Journal Online will be placed in one of eight categories - car buffs, consumer techies, engaged investors, health enthusiasts, leisure-minded, mutual-fund aficionados, opinion leaders and travel seekers - or into a custom category designed at a marketer's request.
Behavior-based advertising should particularly appeal to sites that do not ask users for personal information to view their content, according to Omar Tawakol, vice president for product marketing and business development at Revenue Science in Bellevue, Wash., which developed the system being used by the Journal Online.
The Journal Online becomes the latest Web publisher to pursue behavior-based advertising. Tacoda Systems in New York provides its Audience Management System to clients like CondéNet, part of the Condé Nast division of Advance Publications; Tribune Interactive, a network of newspaper sites owned by the Tribune Company; and USAToday.com, the Web site for USA Today, owned by Gannett. AlmondNet in New York also offers similar services. And The New York Times on the Web, part of The New York Times Company, in March introduced its own version of behavior-based advertising, developed internally.
For the Journal, behavior-based advertising also offers a way to seduce advertisers without giving over its pages to distracting animations.
"You won't see Bart Simpson running across our screen," Mr. Kilgore said, referring to the cartoons, sound effects and screen-takeovers that have captured marketers' imaginations in a very different way.
On Slate.com, for instance, a current ad for the Blue card from American Express expands beyond its boundaries, covering portions of articles with gray and blue blobs that eventually coalesce into a credit card as space-age music plays.
Visitors to the Web sites of ABC News, TV Guide and The New York Times last weekend also could see cavemen appear in full-screen, 15-second commercials promoting the Discovery Channel's "Walking with Cavemen" special, which first ran last night.
That these expansive ads, which can be stopped with a single click, are distracting is exactly the point, according to both supporters and detractors.
"One of the biggest problems is that those ads tend to have an unbelievable ability to interrupt whatever a person's doing at that point," said Charlene Li, principal analyst at the San Francisco office of Forrester Research.
"The thing I hear is that if it's interesting and funny, people won't mind as much," Ms. Li added. "And I say that's true, but most of the time they're not."
But backers argue that it provides a better canvas for ad agencies' creative executives than boxy, contained formats, including the larger-size ads also gaining ground.
"We're a television brand," said Susan Campbell, vice president for consumer marketing at the Discovery Channel in Silver Spring, Md., part of Discover Communications. "And our goal in the media that we choose is to try to be as dynamic and multidimensional as we can." The online campaign for "Walking With Cavemen" was created by itraffic in New York, part of Agency.com, and uses technology from Unicast.
Others said the ads might sometimes grate on users, but they were a price of free, quality financial information.
"I can't tell you that there aren't people who say, `I wish you wouldn't do it,' " said Larry Kramer, chairman and chief executive at CBS MarketWatch, a financial Web site that runs full-screen commercials before users reach its main page for the first time each day. "When I ask how else would you have us do it, they don't have a better answer."
Of course, aiming such ads more carefully might make them irritate less.
Full-screen ads are first and foremost a nuisance, said Michael Cohen, 38, a New York disc jockey who was renting access to the Internet at a copy shop last week.
"It's not the worst thing in the world," Mr. Cohen said, when reminded that ad revenue supports free content online. "It depends on what it is. If it was for a new Lexus, I wouldn't be interested. If it was tickets to a Dylan concert, then I'd be interested."
Posted on aef.com: June 19, 2003
Nat Ives, The New York Times. June 16, 2003
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