Bebo’s recent decision to allow users to decide which types of ads they want to see highlights the need to make banner advertising more relevant. The next generation of ad serving tools will learn what consumers are interested in and will lead to a renaissance for direct response banner advertising.

Modern marketing demands an ever more sophisticated approach to targeting customers and thankfully the tools and technology at our disposal to assess people’s aspirations, likes and dislikes online are the best yet.

With e-commerce software we can capture every click of the mouse to give a complete history of interests, considerations and purchases. We can then use this information to make inspired suggestions that prevent customers buying their next product elsewhere.

Nobody does this better than Amazon, which now has an almost complete history of every book I’ve purchased over the last 10 years. Amazon certainly knows how to use this data too, turning it into relevant recommendations that I regularly respond to.

And it seems I’m not the only one, as I understand that personalisation is believed to have a direct effect on 15% of all sales. But it’s not just about the money: by making relevant information they are encouraging me to invest in a commercial relationship that will save me time.

Not everyone is in such a luxurious position as Amazon, which possesses the kind of data that marketers’ dreams are made of. What products do you think I might be interested in when I stop buying cocktail recipes and buy the Readers Digest DIY bible? Or what if I get myself a copy of “Fatherhood: The Truth”? If only they’d create some segments and let us advertise to them, they’d be able to recover all that money the spent on exclusive advertising deals back in the 90s.

Unfortunately such opportunities for targeted online advertising are few and far between, so it was great to see social networking site Bebo announce recently that it wants to give users the power to select areas they’re interested in, so they only see ads that are relevant to them. It will be a first for the industry and as a marketer I am delighted that this is happening. 

In the UK, internet advertising now accounts for almost 6% of total spend on advertising and continues to grow. However, much of this spend is accounted for by search and banner advertising is somewhat trailing behind. With CPMs at rock bottom personalisation can be the salvation of the banner ad, and it’s no surprise that a Web 2.0 site like Bebo has recognised this.

But allowing people to select their own advertising is only part of the process and will not appeal to everyone. The next stage is to observe what interests visitors and use this behavioural data to present them with better targeted banners and content. It’s no wonder people zone out of advertising when all they see is the same ads again and again, whether they’ve already responded or not.

So, why aren’t all companies with a web channel implementing this type of solution already? Costs have been a major factor – this kind of software has never been cheap and, until recently, was disproportionately expensive compared to banner costs. However, the technology is now finding its way into ad servers and thankfully banner advertising can now move away from simply throwing enough a mud at the wall to see if any sticks.

We are about to see a step change in banner targeting, welcome to Banners 2.0.

Paul Cook is MD of Levexis.