November 19, 2009, 12:00 AM

Display ad-serving technology balances personalization and privacy

Dotomi technology skips cross-site tracking, looking deep into merchants` own data to personalize ads.

Personalization is one of the hottest trends in Internet retailing, but increasingly, consumers are scrutinizing how marketers gather and use data on their online behavior. Personalized display ad-serving vendor and online media buyer Dotomi says it has boosted conversions significantly with a system that addresses those concerns.

Dotomi cites one unnamed retailer that gained a 44% lift in clicks on the personalized ads versus clicks on standard ads, as well as 46% higher conversion rates off those clicks. The vendor also cites conversion rates averaging 18% higher on personalized, targeted offers served to customers on-site in controlled tests across the sites of several multichannel retailers.

Dotomi uses its own technology to personalize display ads served on behalf of its retailer clients, dynamically adjusting the message, frequency, sequencing, offer and creative of the ads it serves for its clients to consumers on portals, ad networks and publisher sites.

Unlike behavioral ad targeting, generally based on data gained by tracking consumers’ behavior across sites, Dotomi doesn’t track consumers from site to site. It personalizes the ads served for its retailer clients based on customer data gathered by the individual retailer within the bounds of its own privacy policy and then shared with Dotomi, according to chief operating officer Ken Treske. The vendor deepens that data about the customers of that retailer with technology that matches a customer’s online and offline interactions with the merchant.

To further address consumers’ privacy concerns, the vendor also offers retailers the option of placing a button within the display ad that shoppers can click on to see an overlay showing a short explanation of why the ad is being served to them, a permission menu that covers the serving of future ads, and an opt-out box. About 20% of the marketers for whom Dotomi serves ads now use this option. Treske says he expects that percentage to grow next year as more retailers use privacy protections as a competitive edge.

The system, he says, creates one-on-one marketing that’s more individual-specific specific than the customer segment approach associated with behavioral targeting, while respecting shoppers’ privacy. While Treske didn’t attribute the results to specific retailers, Dotomi’s retailer clients include VistaPrint LTD. , No. 44 (a PDF version of each company’s financial and operating profile can be ordered by clicking on its name).

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