Study finds behaviourally targeted ads more than twice as effective as non-targeted online ads

In 2009, behaviorally-targeted advertising secured an average of 2.68 times as much revenue per ad as non-targeted “run of network” advertising.

The report said that behaviourally-targeted advertising is more than twice as effective at converting users who click on the ads into buyers (6.8% conversion vs. 2.8% for run-of-network ads), and accounted for approximately 18% of advertising revenue.

The study was commissioned by the NAI and conducted by economist Howard Beales, the former director of the Bureau of Consumer Protection at the US Federal Trade Commission.

“Over the past several months, policy discussion around behaviourally-targeted advertising has lacked a critical foundation, because there had never been an empirical assessment of the value of such advertising to ad networks, consumers, and publishers,” said Beales.

“This study found that behaviourally targeted advertising is a critical component of ad network, publisher, and advertiser success. Behaviourally targeted ads sell for twice the price and offer
twice the effectiveness of normal run-of-network ads, significantly enhancing the advertising revenue engine driving the growth of the internet.”

Carat has just released a global adspend forecast, predicting 10.1% growth in online this year and 9.1% growth in 2011.