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Connected: Time-of-day ad targeting growing on the Net
Saturday, July 29, 2006

It's 11 in the morning, and you're just starting to notice that knot in your stomach as lunchtime approaches. But you're busily working, and you just happen to need to do a search. So you open a window with Google or MSN and search for your required information. Coincidently, you see an advertisement for a local pizza shop or sushi restaurant.

Actually it's probably not a coincidence.

Google recently announced that it would start to let its advertisers select the time of day to run their ads, a capability that MSN advertisers have had for months. Of course, in this usual game of one-upmanship, Google has stretched the way it allows the timed targeting. Not only can an advertiser set what day part, but also can be as specific he or she wants -- within 15 minutes.

For many advertisers whose products are sensitive to time of day -- such as restaurants, entertainment and transportation -- time-based advertising adds a new way to make sure that they hit the prospect at the right time. However, even though at first glance it looks as if it will decrease the amount of money paid for advertising, it might actually increase the amount paid.

Certainly an advertiser won't be paying for undesirable time periods. If you know 90 percent of the decisions to buy your product happen between 11 a.m. and noon, you won't let Google run your ads between 7 p.m. and midnight. You'll save more money that way. But you'll probably pay more for the ads you do run before the noon hour -- because you, your competitors and other merchants who have products that are purchased during the same day part will bid up the price of the per-click advertising during that hour.

That's likely to be one of the reasons that Google is offering the new targeting criteria, even though Google's director of product management told Mediaweek that day part-based targeting has been requested by advertisers. Imagine being able to satisfy client demand, and get more money for it at the same time.

Day part-based ads allow Google to better "monetize" its page inventory. Every time a page is displayed to a user, Google executives and stockholders want to make a few cents. They've been pushing to get more users to see more pages so there are more opportunities to make these few cents.

Now, since there are more people bidding for fewer opportunities to display their ads -- because they are saying they want to display them only certain times of day -- the bids will increase for those day parts. One could safely assume that there also will be more clicks on the ads because they hit at the right time. That means more money for Google because Google gets paid only when the user clicks on an ad.

Even though the advertiser may pay more per exposure, he or she should benefit from the extra targeting. Anytime you can focus on the people most likely to buy your product at the time they are most likely to buy, your advertising will work better.

The problem with the new day-part targeting is that many companies will start to use it because it sounds like it will help them -- even though it may not be the right way to target customers. That's a frequent problem with Internet advertising: It's easy to do but tough to do right. Like so many things.

First published on July 29, 2006 at 12:00 am
David Radin, a free-lance writer for the Post-Gazette and consultant, is a staunch believer in sending the right message to the right person at the right time. Send your related question or comment to him via www.megabyteminute.com.