According to AdAge.com, Google is turning to Behavioral Targeting to beef up its display advertising business.

Here’s the scoop:

[On March 11 Google] announced it will launch a beta test of “interest-based targeting,” which lets advertisers target web users based on where they’ve been surfing across the internet. If a user is reading sports articles on NYTimes.com and also visiting CBSSports.com, for example, it could get lumped into a sports audience bucket, which advertisers can target.

Google will also let advertisers “re-market” web users across its content network, so if a person visits an advertiser’s site or abandons some products in an online shopping cart, that advertiser can find that consumer again on the web and serve him or her ads. In its beta version the targeting measures will be sold through Google’s direct-sales team, with a select group of advertisers taking part; later it will be available in the self-serve AdSense auction marketplace. The targeted ads, which can be either text or display, will run on AdSense partner sites and YouTube.com.

AdAge goes on to note that this is ”the first big sign Google is integrating into its large AdSense network some of the technologies it picked up with its acquisition of [advertising network provider] DoubleClick.”

Unfortunately, it’s also the time that, as reported by MediaPost, consumers remain concerned about online privacy issues. According to MediaPost’s Behavioral Insider newsletter:

Publishers and advertisers by now have internally devoted enormous investments in money, time and intellectual capital to behavioral targeting platforms. Yet when it comes to consumers themselves, most brands still like to pretend that behavioral targeting doesn’t exist, treating it like a secret vice to be locked away, hidden from the public that simply “can’t handle the truth.”

A recent study by Trust(e), an independent nonprofit online privacy advocacy organization, documents why that is precisely the wrong message for brands to be communicating.

The Trust(e) Behavioral Advertising Survey, conducted by TNS, surveyed a nationally representative sample of 1,008 individuals aged 18 and over on their attitudes about behavioral targeting. The survey found that, although consumers remain suspicious of and conflicted toward behavioral targeting, an increasing percentage of the online public are growing somewhat less uncomfortable about behavioral targeting, if (and it clearly remains a BIG if) brands radically step up their efforts to be more open, honest and transparent about where, when and how behavioral targeting is used.

Contrary to the assumption of some in the industry, behavioral targeting as a term is no longer esoteric. In fact, according to the survey, 43.2% of respondents said they’re familiar with the term, and 68.6% knew that their browsing information may be collected by a third party for advertising purposes. Over a third, 34.9%, felt their privacy has been invaded or violated in the last year due to information they provided on the Internet.

The survey found that consumers were not only very sensitive to any perceived intrusions into privacy, but also acted on that feeling by managing their privacy through activities like deleting cookies. Over 36% of respondents said they do at least one of the following in order to surf the Internet anonymously: use proxy surfing software; give fake names and contact info when requested by certain Web sites; and use a Web browser with privacy settings that delete cookies and don’t record a history of visited sites.

Here’s a sneak peek at a little of what our own Marketing Rag has to say about behavioral targeting:

“It creeps consumers out to think they’re being watched. George Orwell did such a great job of introducing the concept of Big Brother in ’1984′ so now people worry about the misuse of their personal, private data for nefarious purposes. Thankfully, most marketers really only want to know what consumers are up to so that they can sell stuff. Behavioral targeting enables marketers like us to promote products that we’ve learned are likely to be of interest to specific segments, rather than try to flog everything to everyone. We’re so over one-size-fits-all. For those consumers who (for example) don’t have pets, they would find it a great pleasure and a very useful side-effect of behavioral targeting NOT to be shown petfood ads.

“To send consumers the right messages, we marketers need to:

• acknowledge that, thanks to modern technologies, we’re better able to understand consumers’ needs and wants without having to constantly ask about them;
• propose that, as a result, we can offer products and services that are more likely to be relevant and of interest to individual consumers;
• enter into dialog with consumers to refine and personalize those offerings even further.

“The other main challenge for marketers, when considering Behavioral or Interest-Based Targeting, is to ensure we have a really good understanding of the processes by which consumers have been sliced and diced by the publishers — in other words, how they have been evaluated and clustered into segments deemed suitably alike (and presumed to be potential targets).  If we use Google’s ‘sports audience bucket’ as an example, are those within the bucket any more or less likely to be potential purchasers of our products? How will we know? Holy segmentation Batman, this sounds like a job for split-run testing!!

“There’s another issue to consider as well. If all the hottest prospects have been identified behaviorally and sold off in segments to interested marketers, at what point do we rule out advertising to the rest, because they are (by exclusion) NOT hot prospects?”

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