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Study finds behaviorally targeted ads more than twice as valuable and effective as non-targeted online ads

Today the NAI is releasing a first-of-its-kind study about the economic value of behavioral advertising.   The study was conducted by former FTC Consumer Protection Bureau Chief Howard Beales, based on data from twelve NAI members with total ad revenue of $3.32 billion in 2009. Read the study and the NAI’s accompanying press release.

The study finds that behavioral-targeted ads sell for twice the price and offer twice the effectiveness of ordinary run-of-network advertising.   This added revenue flows back to publishers: the survey found that more than half (54.6%) of revenue went towards the purchase of advertising inventory. The study also finds that behavioral advertising revenue accounted for an average of 17.9% of the survey respondents’ overall revenue.
 
The Beales/NAI study highlights the importance of behavioral targeting to the advertising model that supports free online content and services for consumers.  The growing significance of behavioral advertising as a source of revenue for Internet content and services providers underscores the need for careful consideration of policies that would affect the current advertising marketplace and the innovation it supports.
 
We hope that this new economic data will help inform the public policy debate, and the NAI will be filing the study as a comment for the FTC’s “Exploring Privacy” Roundtable process.

Chuck Curran
NAI Executive Director