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The idea is essentially to obtain user-behaviour data from the MSN and MS Search networks to find out what people are interested in. They are then targetted with ads on topic to those interests, rather than specific keyword searches.
For example, if I'm searching around for prams and discount baby clothes, chances are I'm a new mum (well, dad actually) so I would be in the "new parent" category which advertisers could specifically target.
The behavioral targeting component of MSN's adCenter ads is one of the bids the company is making to differentiate its search engine marketing product from its dominant competitors
Actually, Yahoo! have been doing this kind of thing for a few years now, and it's likely to have more of a focus with it's upcoming Panama platform.
Google also filed a couple of patents on this last year:-
US Gov Patent Link [appft1.uspto.gov]
This could be the future of ad targetting for the web and the scenery around this space could change quite a bit depending on who implements this the best way. I'm not sure how well it works in practice, but in theory it certainly makes sense.
Anyone here using it?
I'm sorry about the confusion and please let me know if you have any questions.
The two behavioral search technology demos in adLabs are Demographics Prediction and Detecting Online Commercial Intent.
More forum discussion about AdLabs on this thread [webmasterworld.com].