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Andy Beal posted on ThreadWatch this morning about Google’s plans to offer demographic targeting. As Andy notes, this comes “on the heels of MSN’s demographic-friendly AdCenter.” To quote Lee Corso, however, “not so fast, my friend.” Google’s announcement is interesting – and significant – but it is also quite a bit different from what MSN intends to do.

The interesting part is simply that Google, MSN, and Yahoo (in May or June) are all jumping on the behavioral targeting bandwagon. For a while it seemed like Revenue Science, Tacoda, and Kanoodle were the only ones who cared about SEM demographics and psychographics. Now that the big boys are joining the fray, you can expect to see search engine marketers get a lot more serious about their log files, Web analytics, and Nielsen or comScore subscriptions (Google, by the way, is using comScore data, which I have always thought was more accurate that Nielsen, so way to go Google).

But let’s be clear what this Google announcement is and isn’t. The demographic targeting Google is providing is for site-targeting only. Site-targeting is Google’s CPM product. With site-targeting, you type in a word (for example “Iowa hawkeyes”) and Google shows you sites on their distribution network that are relevant to that word. You can then opt-in to advertise on these sites, and you can bid your max CPM amount to show up.

Site-targeting doesn’t apply to Google, or to any search results, for that matter. It also excludes most of Google’s big distribution partners (like AOL), and as noted, it’s CPM only. So Google’s behavioral targeting really only applies to a limited segment of their network.

Also, this is really only quasi-behavioral targeting, in my opinion. The dream of behavioral targeting is that you will someday be able to choose your demographics and have your ad show up wherever someone with your chosen profile is surfing. I believe MSN once described this as such: MSN has information that a particular user is looking for a mortgage. When that user types in “basketball shoes” on MSN, you could still pay a premium and get your mortgage ad to show up in the ad results. Google’s site targeting is essentially giving advertisers access to a slice of comScore data about the user demographics of Web sites on the Google distribution network. This is cool and helpful – don’t get me wrong – but it is not true behavioral targeting, not by a longshot.

Still, kudos to Google for continuing to push the envelope here. I recognize that Rome wasn’t built in a day, you have to crawl before you walk, etc, etc. As John Battelle says, Google has an incredible “database of intentions” on user behavior. If at some point they decide to rely on that database (as opposed to the comScore database), and apply this to CPC ads, whoa, look out – that is some major behavioral targeting they can bring to the table!