AOL, TACODA and the Anatomization of All Media
The web is buzzing about AOL’s acquisition of TACODA, the behavioral targeting ad network and technology company.
What the heck is behavioral targeting? For Mediavorous readers who don’t spend a lot of time thinking about interactive marketing, behavioral targeting (BT) puts an advertisement in front of a user that the BT technology infers the user is interested in based on where the user has clicked in the past.
So, if you’re visiting a lot of sites that have articles about, for example, four-door Lexus SUVs with V6 engines, then the BT technology will conclude that you’re shopping for a car and might serve up an advertisement for the competing Hyundai Veracruz.
What’s interesting about BT is that it will serve up the ad when you’re visiting the sports section of NYTimes.com or somewhere else. In other words, although BT derives much of its intelligence about what the user is interested in via the content of the websites the user visits, it deploys that intelligence into situations where the content might be entirely different.
This is important for two reasons, the first of which is relevant for iMedia and the second of which is more relevant for the Mediavorous audience.
#1. It marks another AOL investment in the ad inventory business (all the blank spaces into which ads get placed are “inventory”), with prior moves including the 2004 acqusition of Advertising.com — a big network of websites where one advertiser (say, Nike) can put its ads across the network all at once — and earlier this year’s acquisition of ThirdScreen Media, another network but one focused on mobile phones.
While AOL believes and continues to invest in its own content — and even moved away from a business driven by dial-up access fees to one driven by advertising — it also has quietly built the ability to put the right ad next in front of the right person no matter what the criteria: whether an advertiser wants to buy propinquity (putting a car ad next to a highly-branded car article on AOL or the New York Times), reach (buying ads next to lots of car articles across the web) and/or frequency (exposing the prospective customer to the ad lots of times).
#2. This is another step forward in the anatomization of all content, which really started when Napster and iTunes essentially killed the album and shifted the focus of music consumption to individual songs. Of course, radio had been playing individual songs for decades, but the presumption there was that the singles were free samples for the album or CD because most of the time that’s what you had to buy to get the single. What Napster and iTunes did to music YouTube and other video sites have done to TV. Now, if you’re looking for one funny bit from The Daily Show you don’t have to watch the show itself, you just check it out on YouTube later.
I’ve written many times before, here, about eventness, but one of the other great pleasures in media involves another concept, “cognitive funding.” The first person to talk about this was Steven Pepper, a twentieth century art theorist at Berkeley. Pepper taked about funding in terms of a painting, where if you looked at the Mona Lisa three times by the final viewing you were seeing the cumulative exposures of T1 + T2 + T3, where each exposure built a cognitive and aesthetic fund. When an object of scrutiny is sufficiently complex to reward repeated viewings, the more you look, the more you like. This also works for serial fiction of all sorts. Essentially, if you watch on episode of “Entourage” you aren’t getting nearly the cognitive experience as you are if you watch a whole season.
The human mind is torn between the desire for novelty and the desire for building cognitive and aesthetic funds.
What does all this have to do with behavioral targeting? It helps me to focus on what’s different now — at the beginning of an explosion of all media that will only get bigger — compared to the glory days of television that ended about 10 to 12 years ago, right about the time that cable TV got bigger and internet content started to be generally available and statistically significant.
In the old media days, funding was easy because there wasn’t that much to choose from. Today, it’s hard because there are so darn many media choices. As I’ve said before, audiences are overwhelmed by the sheer quantity of things clamoring for their media attention and underwhelmed by the quality of the individual things they do watch (as Barry Schwartz has argued, the number of choices leads to opportunity costs that inevitably decrease the satisfaction of the thing eventually chosen).
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