Wednesday’s WSJ has a fascinating article about how Acxiom mines offline data to target online ads. It’s the most targeted and data rich approach to targeting online ads that I’ve heard of or seen and I’m very surprised that it didn’t get more blogosphere coverage.
Acxiom’s new service, Relevance-X, goes further, drawing on the company’s database of 133 million households to determine which ads to show. Acxiom’s consumer database includes information gleaned from sources such as public real-estate and motor-vehicle records, surveys and warrantee cards consumers fill out. Estimates of annual income, marital status, average ages of kids, home ownership and property value, educational level and travel histories are also available.
The company classifies each U.S. household into 70 clusters based, it says, “on that household’s specific consumer and demographic characteristics, including shopping, media, lifestyle and attitudinal information.” Clusters range from “Married Sophisticates” to “Penny Pinchers.”
Acxiom contracts with Web sites that collect consumer addresses, such as online retailers and those offering sweepstakes and surveys. In a blink, Acxiom looks up the people who provide their addresses in its database, matches them with their demographic and lifestyle clusters and places “cookies,” or small pieces of tracking data, on their computer hard drives.
When those people visit Acxiom partner Web sites in the future, Acxiom can read cluster codes embedded in the cookies and use them to pick which ads to show. The company doesn’t disclose the sites that carry such targeted ads, but says they reach 60% of U.S. Internet users.
That allows a company selling an expensive antiwrinkle cream, for example, to contract with Acxiom to display its ads to affluent women 40 years or older in the “Skyboxes and Suburbans” or “Summit Estates” clusters.
Acxiom says that there are no privacy concerns because only gender, zip and the segment that a person belongs to are stored in the cookie and used to target, and segments are all at least 1m people. Personally, I don’t see why there should be any privacy concerns for online targeting since this same data has been used to target offline advertising for a long time. But this is exactly what caused Doubleclick’s acquisition of Abacus Direct to come under huge scrutiny in 2000, and led to the subsequent spin off of Abacus.
This data could have a significant positive effect on industry wide CPMs if its targeting can really improve the effectiveness of online advertising.