April 11, 2008, 12:00 AM

New ad network targets online shoppers on purchase and browsing behavior

After two years of collecting anonymous data about 140 million online shoppers from 375 retail and manufacturer web sites, aCerno launched this week.

After two years of collecting anonymous data about 140 million online shoppers from 375 retail and manufacturer web sites, aCerno launched this week as a pay-per-action network that selects which banner ads to display much as Google chooses which paid ads appear on search pages: by how much the advertiser is willing to pay and how likely an ad is to lead to a sale.

The company claims it is the first online network that uses actual consumer purchase and web browsing behavior to determine which ads to display. When a consumer first arrives at one of the participating retailer or manufacturer web sites, the system places a cookie on his browser with a unique ID number, enabling aCerno to track the individual’s subsequent online activity.

“If you’re interested in buying a big-screen TV, and you’re on the web going to e-commerce sites and looking at different brands and price points, what we see is a cookie number unique to a browser that is associated with all that viewing of products and information about big-screen TVs,” says Tom Sperry, CEO and chief privacy officer of aCerno. “We know cookie 456789 is probably very interested in purchasing a large-screen TV. Our advertisers can deliver a message to that user and influence that purchase decision on which brand he’s going to buy and where he’s going to purchase.”

The system’s analytics also can predict what a consumer might buy next. “If you buy a big-screen TV, then maybe you’re interested in a surround-sound system or furniture for your TV room,” Sperry says. “We only get paid when we generate a transaction, so it’s very important to us that we’re sure the ad we’re showing has the best change of generating a transaction.”

The aCerno system scores every cookie for every advertiser. The data for each cookie typically is refreshed every 60 to 90 days, and the cookie is not associated with data that would identify the consumer, Sperry says.

A test this year showed the aCerno system improved conversion rates nearly eight-fold over traditional online ad-placement systems, which typically place ads based on the content of a web site or by the kind of consumers who typically visit the site, aCerno says. Almost all the ads aCerno places are on the 400 most popular web content sites, and 80% appear on top 100 sites, Sperry says.

Each advertiser bids on ad placements, and aCerno considers those bids along with the likelihood that the ad will lead to a purchase by a specific consumer. In the event a click on an ad leads to a sale, advertisers pay either a percentage of the sale or of an agreed-upon average order value, Sperry says. He says advertisers only pay on sales deemed incremental, and that they determine that by looking at such factors as whether the customer had purchased previously and, if so, how recently. There are more than 450 advertisers on the aCerno network, the company says.

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