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SES 2006: Demographic Targeting

David A. Utter
Staff Writer
Published: 2006-08-07

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This session focused on demographic targeting. It has become a serious issue for online advertisers who want to find higher quality customers online.

Managing editor Mike McDonald of WebProNews filed this exclusive look at the SES 2006 San Jose session on demographic targeting.

To target or not to target by demographics? The signs have pointed to yes thus far, as the major search engines have all talked about offering such an option to their valuable advertising clients.

Microsoft has made the most noise about demographic targeting. Its launch of the adCenter self-service advertising product made demographics a point of difference between it and competitors.

The company accepted the opportunity to get in front of a knowledgeable audience at the Search Engine Strategies 2006 conference in San Jose and discuss the importance of the topic. Jed Nahum, Director of Product Management, MSN Search, discussed questions about the ins and outs of demographic targeting.

"What we do is we collect registration data from our visitors in the form of the Windows Passport," Nahum said of how Microsoft provides the business intelligence and demographic targeting. He noted they enrich that data through alternative and subsequent program registrations.

"One of the questions I face a lot and one - that I cant answer - is what percentage of our searches are covered in demographic data; the answer is most of them, but not all of them," he said.

Nahum discussed data accuracy, an area of significant importance to a would-be demographic targeted campaign. Microsoft matched its ad data across a couple of other databases they control.

About 80 percent of the ages matched across the databases. Nahum noted that the most accuracy could be found in the ages between 20 and 30. (We think that will be good news to a broad range of marketers, who covet young demographics only grudgingly less than they do oxygen.)

Nahum said audience intelligence Microsoft has gathered reaffirmed some things people already know, such as women performing more searches for purchases than men; some new facts, like an even gender split of searches for a given category can skew heavily male when the search has been "man-ified," as in changing from "kitchen appliances" to "viking kitchen appliances."

Kevin Lee chairman and co-founder of Did-It.com, gave a tip on using demographic targeting well: "Make sure you're focusing not just on your customers, but on your best customers."

Lee also noted that time of day could be a big difference in gaining conversions. His presentation showed huge trends in some of these conversions based on what many would consider very tertiary datapoints.

Does Demographic Targeting work?
Michael Sack of Inceptor related a test he performed with advertising, broken down this way:

7 days with no demo targeting
7 days with a specific demographic target of age and gender
7 days without demographics stuff, just using creative optimization
With demo on, he experienced a drop in traffic and cost, but his cost per click went up conversion rate went up as well.
Conversions were best with targeting on, but the optimized content was a very close second.
Interesting phenomenon though: optimized creative generated more revenue.
"Simply optimizing creative had a close, but not necessarily equal, results to the optimized creative," said Sack.

With a thorough analysis of conversion data, advertisers can look more closely at time of day for displaying ads, and pause and restart campaigns based on time.

Michael Sack, Executive Vice President & Chief Technology Officer, Inceptor, warned that privacy concerns could mitigate the usefulness of demographic targeting.

"The privacy issue is, I think, a big part of this. I think people are going to revolt at some point and refuse to provide this type of information," he said.

Demographics can work, according to Sack, but there may be a tradeoff in traffic and revenue, depending on the advertiser. "I think you should be focused on optimizing your creative and optimizing your keywords. If you have a very specialized, highly targeted product and a limited budget, demographic targeting is going to make more sense."


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About the Author:
David Utter is a staff writer for WebProNews covering technology and business.

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