"Submission Master Dummy." That's the latest come-on the social networking site's contextual ad server is delivering to "Sluggo" these days.

Sluggo might sound like the local high school wrestling coach, but in the real world she's just Mary, and tonight she's too tired to grapple with an ad for "the highest quality grappling dummy available" after she hits the publish button on her blog. With family issues and an emerging Web-based business to run, this 48-year-old Midwestern married mother of two teenage girls has enough on her plate. This latest ad almost has her longing for the equally inexplicable sponsored link for "Hot African Shemales" that seemed so drawn to her profile earlier in the year.

Sluggo's got plenty of company. These days, countless users are wishing their social networking sites would simply pay attention to their online travels so they could serve up an ad for something they would—gasp—actually want to buy. After all, that's the whole idea behind behavioral targeting, isn't it? The footprints left behind a user's daily wanderings through the Web (or, in the case of social networks, personal and lifestyle details) are analyzed to later match her up with ads for products or services she's likely to want. It sounds so promising—in theory at least—that behavioral targeting is what many consider the wave of the future.

"Advertisers are extremely interested in all new developments in the behavioral targeting space," said Emily Riley, senior analyst at Forrester Research, Cambridge, Mass. "We're seeing a big uptick in the use of [these] tactics."

According to Forrester data, 24% of advertisers used behavioral targeting in 2008. Last year it was only 16%; the year before, only 13%. And BT's popularity is only going to grow, Riley said. "Almost half of advertisers say, 'Even if I didn't use behavioral last year, I definitely want to this coming year,' and this big jump between 'not currently using' and 'plan to use' indicates a lot of excitement around the topic," she said.

So, bring it on? Not so fast. To BT or not to BT is a tricky question that has drawn concern from privacy advocates, even though a surprising number of consumers say they actually wouldn't mind sharing personal data to see relevant advertising.

There's further disagreement over what BT is or is not, with online media firms using varying definitions to defend themselves against accusations that they're violating the privacy of their users. Behavioral targeting, contextual targeting, keyword targeting, placement targeting, geographical targeting, demographical targeting, psychographical targeting and a host of other terms are thrown into a blender and blurred into a buzzword cocktail that makes marketers drunk—some with excitement, others with confusion. Nowhere is this conversation more excited than in social networking, a realm where users feel comfortable letting their hair down and sharing personal info with "friends."

When it comes to social networks, some claim that the sort of ad-targeting techniques they're using are not, technically speaking, behavioral targeting. And by the strictest definition, they are not. "Behavioral targeting has traditionally been done in a way where an ad network will place a cookie onto your machine and then watch which sites you go to—in other words, they watch your behavior," said Tim Kendall, director of monetization at Facebook. "If you go to Theweddingchannel.com, then you go to Victoria's Secret, and then you go somewhere else, they can generally, with a reasonable confidence interval, infer that you're a woman. It's done behind the scenes, in almost all cases, without the user knowing it's being done. And we don't do that."

But the "behavior" a member of a microcosm such as MySpace or Facebook or Friendstar or Flickr exhibits there is more than just a few vital stats. And the smarter sites are tracking Sluggo's every move, from how much time she spends on her favorite band's music page to how many invites she sends out. And that type of behavioral info—especially when combined with our demographic and psychographic stuff—may be very useful to marketers once they figure out just what the heck they can do with it.



Where Private is Public

Behavioral targeting is relatively new (early online ad company DoubleClick, now owned by Google, launched an "intelligent" targeting service in 2000)—but the debate about privacy it has triggered predates the Web itself. What's more, as targeting technology has improved, the objections of privacy advocates have grown in tandem. One of them is Jeffrey Chester, founder and executive director of the Center for Digital Democracy in Washington.

BT began as a simple process, Chester said: "Cookies were placed on users' browsers to track which Web sites they visited and permutated to retargeting. Now it's a very elaborate system of data analysis." And there lies the root of Chester's argument (one of them, anyway): "Very few people really understand or follow what's going on. Advertisers and marketers have unleashed these very powerful techniques on the global public without really considering their ethical and societal implications."

"Behavioral targeting methods have been migrated, disturbingly, I think, into the social media space with social media marketing," Chester continued, "using not only tracking technology to understand what their users are doing, but also a new form of behavioral targeting—a kind of conversational eavesdropping analysis."

Perhaps not surprisingly, the industry claims that what it's doing is not eavesdropping. But consumers don't seem to mind. According to Forrester data, despite people's concerns about online privacy, they'll trade some of it for relevancy: 29% of respondents said they would prefer to receive appropriately targeted ads as opposed to random ones (37% of respondents were neutral on this question, and 35% opposed). In November of 2007 when Facebook launched Facebook Ads, a targeted-ad system that included the controversial Beacon platform (more on that later) a comment stream at the time from one Facebook user's blog similarly suggested not all users saw the sky falling. "I like the idea of targeted advertising. I'm happy to see stuff that's relevant to me," said one. "Who cares? Only those people who don't have ad-blocking software installed," wrote another. "I think it's clever," intoned a third, who added: "I don't mind ads, especially the targeted kind."

Last week MySpace launched the MyAds platform (it went live on Oct. 13), which allows anyone from a Fortune 100 marketer to that gangly kid in your neighborhood garage band to access its HyperTargeting software to run ads at the site. For a minimum investment of $25, a MyAds advertiser creates an ad, and then goes through menus of demographic and psychographic categories to pinpoint their desired consumer segment. MySpace, which has something like 67 million active U.S. users, then scans its members' profile information and site activity to see who's a good match/ad recipient.

"I'm not sure that I have a definition of behavioral targeting," said Jeff Berman, president of sales and marketing at MySpace. "We can quibble over semantics here, but at the end of the day, marketers know best what audience they're trying to reach, and the more data you have, the smarter you can be with your media.

"It's that kind of information, and there are a thousand different terms for these things out there, but if you want to focus on . . . 25-40-year-old mom Nascar fans who love romantic comedies and live in 12 specific zip codes, we can do that."

And, of course, advertisers want that. Forrester Research's Social Marketing Scorecard 2008 indicated that 28% of large social marketers—those with annual revenues of $500 million or more—would like to see better behavioral targeting on social networking sites (see related chart, this page).



Better Ads Through Science

What marketer wouldn't like to see better targeting? The idea of aiming messages at social communities is so appealing right now because the technology that can make sense of it all has improved so much. The algorithms behind contextual and behavioral targeting are complicated but, according to Forrester's Riley, the sort of "connect the dots" technology now used by an outfit such as Google to match a user with sites best geared to his search terms would also work for advertisers trying to target people at social networking sites.

Why, then, do social networking site members get "targeted" ads that have nothing to do with their interests? Probably because these sites still have a long way to go before reaching their true BT potential. Right now, sites use a combination of targeting tools, and only some of it blurs on or intersects with behavioral targeting. Ironically, as BT becomes more invasive at social networking sites, the technology should improve and thus serve up more relevant ads based on our true site behavior. As marketers snoop on our site sojourns and jot down our wall scribbles, they will find better ways to turn them into the type of predictive behavior that Google uses to mysteriously "know" what we're searching for, rather than misinterpret keywords like "Sluggo" and stereotype us as some big guy who likes to spend time on a wrestling mat.

Not a lot of opportunities exist yet, Riley noted. Still, advertisers want them, which means sites are exploring them. Revenue Science, one of the biggest independent BT networks, is using forward-to-friend behavior to allow advertisers to target virally oriented people. Bebo, the social networking site AOL bought earlier this year, works with Elkridge, Md.-based Lotame, an agency that helps brand advertisers target unique users, such as new moms, who spend a lot of time on social sites.

Kendall calls Facebook's targeting "user-declared information targeting" because much of it is derived from information users have input and it is done in a more-transparent way. Declared information is mostly stuff members provide in their profile, which can include things such as gender, age, political views, college, occupation. There are site actions Facebook members do that the company uses for targeting purposes as well, such as when one "fans" a celebrity or politician.

The difference between what Kendall's selling and traditional BT is that the latter is inferred information—and if there's a definition of behavioral targeting that draws the most marketers' attention, this one is it. A string of personal data or visited sites is one thing; the ability to predict what a user will buy based on that past data is quite another.

"It's more powerful to me as a marketer if someone tells me one of their interests is kayaking than it is to target someone who visited kayaking.com one day," Kendall explained, because in the latter example, a site visit doesn't a kayaking fan make; also, someone else could have gone on the computer and made that search.

Kendall gave some examples of how marketers worked with Facebook's user base. When apparel brand Anchor Blue wanted to promote its new Heidiwood line, it tapped into this user-declared info to target ads to Facebook members whose pop-culture interests were aligned. H&R Block has used the site to aim ads at new filers during tax season, and J.C. Penney used Facebook to target new college students with a campaign focused on dorm life. Marketers looking for more of a direct-response sale than a long-term branding effect also see the benefits in targeting at social networking sites.

While it's not a major focus, Facebook is experimenting with targeting keywords in people's status messages, declarations members update on their profiles in Twitterlike fashion for their friends and God to see. "I might say, 'I'm glad Biden won the debate,' and we can target off that," Kendall explained. "It drops into Tim Kendall's bin of targetable keywords."

According to Forrester's Riley, that's pretty much alright with most users (see chart, page 024). "Consumers care more about obtrusive threats where they actually are harmed in the process—their computer stops working, they lose money from their checking account," she noted. "When you look at things like 'Web sites tracking my behavior,' only 13% are concerned about that. They understand there's a quid pro quo between them and the Web site, that they're tracking me, they may send me a catalog, may target me later with an ad. That has become subconsciously sort of OK to the consumer."



Warning Beacon

As Facebook learned with its Beacon program, not all tracking is subconsciously sort of OK. The social networking site launched Beacon with much fanfare in New York on Nov. 6, 2007. By the end of the month, 50,000 Facebook members had signed a petition objecting to it. In a nutshell, the program used cookies to telegraph what Facebook users were up to on member sites among their friends. Enrollment was automatic and, users complained, the opt-out box disappeared after only a few seconds. Soon afterward, Facebook's founder Mark Zuckerberg was backpedaling via press release. Beacon, the statement said, was meant to "help people share information with their friends about things they do on the Web. We've made a lot of mistakes in building this feature."

The biggest one, of course, was broadcasting shopping behavior without permission, making it visible not just to other members, but to advertisers whose products were being purchased. Facebook was quick to act, changing Beacon from an opt-out to an opt-in service so users could choose whether or not they wanted their online behavior broadcast.

Riley said Beacon violated rule No. 1 with consumers: it crossed the creepiness threshold. "If you remind me that you're tracking my behavior, then that bothers me, especially if it somehow ruins my friend's Christmas by telling them I bought them that book on Amazon," she said. "There's this imaginary line in the sand between ads that are helpful and ads that are are creepy; 28% of people would prefer well-targeted ads to random ads, and that's higher than the number who are concerned about being tracked by Web sites. So, behavioral targeting is good—I don't want to make it sound like I'm saying it's all bad. However, there are many things that people think of as private behaviors that should not leave the borders of the Web site where they happen. And purchasing is one of those things."



Influencing the Outcome

The privacy debacle of Beacon (which has since been made fully opt-outable) now behind it, the industry is looking at "influencer targeting" as the future of BT. Traditionally, behavioral targeting tracks the purchase-oriented target, such as the plasma-screen TV shopper, or the interest-oriented target, i.e., the monster truck fan. However, Riley says marketers are interested in members of these community sites for additional reasons, such as their social qualities and the role they could play in, say, buzz campaigns.

Identifying influencers in the community and leveraging them is something MySpace is definitely looking at, Berman said.

"To change the reputation of a forgettable brand to one that is considered cool, you'd want influential people to be associated with it, and ideally, act like a brand advocate to friends," Riley explained. "It can be a lot more cost-effective—and just plain effective—to communicate to that group."

A marketer who is planning a viral campaign might identify and target members of social networks who forward a lot of information to their friends, since they're virally oriented, too. Facebook is testing this with its Engagement Advertisements, which use gifts and other goodies as incentives to encourage user interaction," Riley said. "But imagine how successful that kind of targeting could be if you could extend it outside of Facebook."

"So much now is reaching the right person with the right message at the right time, and up until very recent history advertising has been forced to take these shotgun approaches," added Berman, who believes there's no more powerful platform for brand ambassadorship than MySpace with its user-driven messaging and content. "The most effective messenger has [always] been a trusted source; it's always more powerful when it's coming from someone you know and trust. When you have a friend who is vouching for a band or a movie or a bacon salt, it's certainly a very powerful thing." b