Targeted Ads Grow Up

Perhaps the biggest drag for television sponsors is that so many viewers are immune to the message. Even at their targeted best -- like sanitary napkin spots during daytime soap operas or beer and razor ads during football games -- the ads feel sexist, and the market is still never a perfect match.

Well, TV advertising took a step forward when The Weather Channel announced it will accept localized advertising that kicks in when the temperature drops below freezing. Companies such as Campbell Soup (NYSE: CPB  ) and Florida's tourism board jumped at the chance to target an audience facing chilly -- if not snowy -- conditions. Cruise operator Royal Caribbean (NYSE: RCL  ) has set up deals with local networks to air its tempting Caribbean cruise ads in snowed-in markets after the local affiliate's weather forecast.

Brilliant? You bet. Yet that still doesn't come close to matching the Internet's potential of landing the ideal audience. If you think The Weather Channel's new deal is good, consider that the company's website has online weather forecasts for 77,000 cities. You just can't localize that effectively through television. Online you can target a rural area, while you are stuck with a cluster of counties in some television broadcasting areas.

Thanks to contextual online advertising you can now reach an interested party for just pennies. From Google (Nasdaq: GOOG  ) AdWords to Yahoo! (Nasdaq: YHOO  ) Overture, there are reasons why these fast-growing companies are doing so well with their paid search products. It's because they work. Even smaller players such as FindWhat.com (Nasdaq: FWHT  ) and Looksmart (Nasdaq: LOOK  ) have been able to carve out a cozy living by serving up performance-based ads.

While this certainly shouldn't discredit television getting smarter -- and it has when you think about the significance of cable programming evolving to the point where channel specialization now means less wasted airspace for an advertiser -- it still has a long way to go before matching the sound logic of online advertising.

Longtime Fool contributor Rick Munarriz now realizes why in South Florida -- where Caribbean cruises are a common local port deal -- RCL advertises frigid Alaskan treks. He does not own shares in any of the companies mentioned in this story. He is a member of theRule Breakersanalytical team, seeking out tomorrow's great growth stocks a day early.


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