The bulk of non-contextual advertising, display advertising, is typically denominated as CPM, in contrast to the CPC of contextual advertising. Why? The bulk of display value’s advertising is to deliver a brand message to a visitor. Targeting of the visitor has primarily been a matter of matching a site traffic’s demographic and geographic information to relevant advertising; more sophisticated implementations have looked at a visitor’s browsing behavior on and off the site, to suss out their general interests and intents, with which to better target the advertising they’re being delivered.

But all of this targeting is predicated on the assumption that the visitor notices the ad. Maybe he scrolls past it in less than a second. Maybe it’s hidden behind another browser window above it. Maybe he shows a pattern of ignoring all image ads with cutesy animations in them. If that’s the case, the most targeted, $100+ CPM ad you’ve delivered to him has been effectively wasted. And in a tight economy, display advertising, most of all, needs to demonstrate value to the advertiser if it wants to avoid the chopping block.

Lotame (that’s loh-tuh-mee, a conjunction of locate, target, and message) is a startup that is seeking to address the issue of visitor engagement with display advertising, and has just landed a deal with WPP’s Mindshare unit to use its technology to better target ads for its clients. Why? According to a video prepared by Lotame, 20-30% of Internet browsing is performed on social networks, while this medium only captures 2% of the total online ad spend. A tremendous exposure opportunity, naturally, provided advertisers know they’re really getting the eyeballs they paid for.

How does it do this? It’s special sauce seems to be carefully monitoring an individual user’s behavior and screen environment. It claims it can notice when an ad is being obscured, and it can detect if a visitor’s mouse is moving or still. Such data gives the firm an idea of the time spent on user engagement with ads. The network can then choose to not display ads to visitors that are sure to ignore them or not even see them at all. It’s a clever technology, and technology is and will be a key determinant among those ad networks that survive the crunch.

This entry was posted on Thursday, November 13th, 2008 at 1:34 am and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.