Sep 5, 2007

Yahoo and Blue Lithium

Yahoo acquires Blue Lithium, as widely reported.

Personally, I think this is a much more interesting deal than Yahoo's acquisition of Right Media, Microsoft's purchase of aQuantive, and Google's buy of Doubleclick, because I believe advanced targeting, particularly as it relates to social media, is the biggest growth opportunity in online advertising.

Andy Monfried and I exchanged notes about this last night. We are seeing a secular shift in consumption patterns towards more interactive ways of communication. To date, the ability to present relevant marketing and advertising to new forms of social media has been lacking, for a number of reasons including the difficult of targeting inside a publishing model where he consumers are a (or "the") major source of content. Better targeting -- whether from analytics, ad networks, or exchanges -- can solve this problem (and ultimately allow social media sites to be free to use!).

Henry Blodget frets about the behavioral targeting perception risk that this deal may usher in:

"We continue to expect that "behavioral targeting"--in which publishers and ad networks place cookies on users' PCs and gather data on what they do--will eventually experience a bout of intense press and government scrutiny."
While I think this risk is overblown (behavioral targeting does not represent more targeting of users, just better targeting), the perception does remain, and ad tech companies must get ahead of the perception game.

UPDATE: Andrew Parker, in a comment below, thinks the issue here is not that great, but for a different reason:
"There's a larger question as to whether behavioral targeting should be default opt-in or default opt-out, but I think this is a much smaller issue consider how easy it is to opt out of every behavioral targeted network all at once."
He points out that Tacoda, a Union Square Ventures company, puts a link to opt-out of targeting right on their home page.

1 comments:

Andrew Parker said...

The security and privacy risk is also overstated because any concerned individual can easily opt out of ALL behavioral targeted ad networks in on convenient location:

http://www.networkadvertising.org/managing/opt_out.asp

There's a larger question as to whether behavioral targeting should be default opt-in or default opt-out, but I think this is a much smaller issue consider how easy it is to opt out of every behavioral targeted network all at once.