This is part one of a ten-part series of Direct Marketing trends for 2013. To read the original article with all ten trends, click here.

Over the past several years, a marketer’s ability to target audiences with relevant online advertising has become a refined science. Technologies like real-time bidding, along with sophisticated models and algorithms put advertisers together with consumers most likely to have interest in a product or service. As the technology and techniques have matured, marketers are now able to reach consumers with a precision that didn’t exist just a couple years ago.

There are many ways that advertisers can target audiences. Some of the major categories include:

Contextual targeting

This is a basic form of targeting where display ads are based on the context of the web site. An example would be an advertisement for a rental cars or hotels within the reservation system of an airline. Consumer interest in inferred based on the context of the current site.

Behavioral Targeting

This more sophisticated form of targeting uses a consumer’s browsing history and other collected profile data to marry advertisements with targeted consumers. Cookie exchanges and real-time-bidding networks allow marketers to bid for ad placement in front of consumers matching specific profiles.

Retargeting

This is a simple algorithm for placement of ads based on the physical location of the user. Typical uses would be for local businesses that want to target a specific location. Ad retargeting uses a browsers search history to display relevant offers for products that a consumer has already expressed interest in. An example would be an advertisement for an appliance that follows a consumer from site to site after searching and viewing the product on a home improvement site.

Audience Targeting

Audience Targeting is a form of consumer selection based on demographic, lifestyle, or other consumer information. Audiences are often clustered in segments, which can vary in size from broad strokes of millions to very refined segments of dozens. Examples of audience targets might be consumers with interests in outdoor sports, affluence, and presence on children.

With Audience Targeting, marketers are seeing more and more options to reach specific users. For example, cooperative efforts in the industry might allow a marketer to select specific consumers based on traditional, off-line, direct marketing techniques and partner with on-line portal sides like Yahoo to reach those specific consumers with registered accounts. Another example is an emerging technology of using household IP addresses and mapping them to consumer files using postal addresses. Like the previous example, this allows for very targeted efforts, but with an even greater universe, as it doesn’t require the consumer to be affiliated with an authenticated site.

Understanding the underlying technology and following the rapidly changing trends can seem daunting. However, the return for adoption for some of the newer techniques in display advertising are significant. The technology today allows for marketers to select audiences down to very refined segments or households and talk in more relevant ways. In a world where offer, audience, and timing are drive results, Marketers now have control of all three in online display, like other traditional direct channels. 
 

On a cautionary note, privacy and do-not-track movements are gaining momentum. Partnering with a marketing service provider versed and experienced in these areas is critical to leverage the benefit and mitigate risk.