Yahoo uses Nectar database to improve targeting

By February 12, 2010Advertising, Yahoo!

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Tim Bradshaw has a piece in the FT today describing how Yahoo and offline loyalty card company Nectar are teaming up to help target display ads on Yahoo’s properties:

Online advertisers will be able to target shoppers based on their high-street purchases for the first time in the UK under a new scheme from Yahoo and Nectar.

The internet company and the loyalty card provider have signed an exclusive deal to combine their databases for customers who opt into the campaign.

Privacy buffs out there will note that this is opt-in only.  Nectar customers are given extra loyalty points if they opt-in and the number who do so will be an interesting indicator of the value people place on their privacy (to the extent this anonymised service is a privacy threat).

Beyond better targeting this deal offers advertisers the ability to see the impact their ads have on offline spending, which is automatically tracked by Nectar.  Apparently this is the first deal globally which will link online ad views with automatically captured purchase data.  This could be a very big deal, helping to drive FMCG ad spend online, which still accounts for only 4% of total online adspend.

Nectar covers a number of the largest UK stores, including Sainsbury’s, Homebase and BP.  They have 16.8m members, and 20,000 have signed up so far.

Some of the smarter people I know are talking about the general case of the first part of this.  That is taking lists of profiled people (cookies) and offering them to advertisers (probably ad networks) who can then generate higher CPMs and/or better click through by targeting against the profiles.  The business model might take the form of auctioning blocks of impressions from the list.  There might be a startup opportunity here.

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