How Microsoft’s Behavioral Targeting Works

Dec 26, 2006 at 9:02am ET by Barry Schwartz

Microsoft Ad Push Is All About You at the Wall Street Journal has a nice overview of how Microsoft’s behavioral targeting ad software works, nothing ground breaking, but a nice overview. I’ll quote a piece of the article for you:

Here’s how it works: If someone types in “compare car prices” on Live Search, Microsoft’s computers note that the person is probably considering buying a vehicle. The computers then check with the list of Hotmail accounts to see if they have any information on the person. If they do, and an auto maker has paid Microsoft to target this type of person, the computer will automatically send a car ad when she next looks at a Microsoft Web page. As a result, people should see more ads that are of interest to them. “We know what Web sites they have visited and what key words they used,” says Mr. Dobson. “We can deduce what their interests are.” Microsoft says that in testing in the U.S., behavioral targeting increased clicks on ads by as much as 76%.

The rest of the article discusses the competitive landscape.

Barry Schwartz is Search Engine Land's News Editor and owns RustyBrick, a NY based web consulting firm. He also runs Search Engine Roundtable, a popular search blog on very advanced SEM topics. Barry's personal blog is named Cartoon Barry and he can be followed on Twitter here.

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ONE COMMENT ON How Microsoft’s Behavioral Targeting Works

Diane Vigil, December 27th, 2006 at 1:25 am ET:

Frankly, this would (as they say) creep me out.

First, they’re checking to see if you have a Hotmail account. Next, they’re checking (I assume) your cookies to see wherever *else* you’ve been. Does this only happen with Internet Explorer, or any and every browser you use? And for how long and where are they tracking your “interests”?

I can see this backfiring, though. Say you search for something in a way that indicates that you’re interested in buying. Maybe you’re not; maybe you were doing it for a friend or relative. Yet, everywhere you go after that, the pages are plastered with ads for the same types of items. Not to mention that credibility and trustworthiness are vital issues when addressing consumers, who may now feel they’re being watched surreptitiously and/or hounded by virtual salesmen.

It’s the same problem that I think localization can bring: you search for something in an area, and, ever after, your search results are limited to that area, as happened to me once at Yahoo.

Only the cookie-reading, account-checking cyberstalking by marketeers is creepier. I can see the value in proferring ads of interest to consumers, but I suspect they may be treading the line between helpful salesmanship and too-obvious intrusive tracking.

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