Marketing - behavioral targeting

The concept of behavioral targeting in marketing has had somewhat of a revival lately after a great deal of negative coverage in 2004. 

Advertising companies providing behavioral targeting services tout up to 2000% increased response rates compared to other forms of online media buys. By 2008, behavioral targeting spending is expected to exceed $2 billion for that year. 

Some experts think that in a decade from now, behavioral targeting and marketing will be synonymous; i.e. all successful marketing will be based on behavior.

What is behavioral targeting?

Behavioral targeting is the method by which advertising or other content is shown to a client or potential client based on activity on a site or network of sites. It differs from contextual advertising as it's not based on the content or a part of a Web site, but on the person who is interacting with that content.

Collecting this type of information is usually done by monitoring and tracking the content accessed via the users' unique IP coupled with a cookie stored on the users' computer. Data such as the types of sites visited, topics accessed and length of time spent viewing is analyzed, then that user is classified as being in a particular category. On future visits to that site, or another site within the network, advertising is then presented that is considered to be most likely appeal to that user.

Behavioral targeting across networks

As you can imagine, large advertising networks can amass enormous quantities of data on individual users and really refine what is displayed to the user. Have you ever been to a site that displayed ads totally non-related to that site, but oddly enough promoted a product or service you're really interested in? Chances are that is behavioral targeting at work.

For example, let's say that John displays the following activity for a session:

Car manufacturer site - 10 minute visit
Spare parts site - 5 minute visit
Weather site - 2 minutes
Searches for mechanical repairs on search engine
Auto classifieds section - 5 minute visit
Local new car dealer - 20 minutes
News site - 3 minutes
Teddy bear blog - 2 minutes

Through John's activity, we can say with some degree of certainty that John's current focus isn't on teddy bears or the weather, but that car is in need of repair and he's tossing up whether to get it fixed or buy a new one. Therefore, he would be a good candidate to serve new car offers to.

A word of warning

If you're going to utilize an ad network that specializes in behavioral targeting, be sure to understand *how* they target and *how* your ads will be displayed. There's been a number of high profile cases in recent years of ad networks utilizing spyware to gather data and show ads. Advertising via spyware isn't a great way to increase favorable perceptions of your business and products :).

In-house behavioral targeting

Where ad networks aren't involved, behavioral targeting can still be carried out effectively on a single site; but it does require multiple accesses by a user, or a lengthy visit. For example, if this kind of behavior is displayed.

- arrives on site on product page
- reads further details about a product
- leaves site
- returns to site 2 hours later
- goes to special offers page
- goes to product page
- leaves site
- returns to product page next day

... at that point, or on the 2nd visit, it would be advantageous for an ad to be served promoting a special time-limited offer for the product as the visitor has displayed some hesitation in following through with a purchase. The person may be comparison shopping.

Autoresponder software  & mailing list managers Get more from your email marketing - tips, reviews  & free trial software/services.

Small scale behavioral targeting

As you can imagine, the software needed for this kind of targeting is quite expensive, although I'm sure that over time it will become more affordable. Even so, there are some strategies that you can use in relation to your own site to experiment with behavioral targeting that won't require you to take out a second mortgage.

Use your cart software.

It's not unusual for people to add products to a shopping cart and proceed all the way to the checkout stage - and then abandon the cart. In another article, I cover some strategies for minimizing shopping cart abandonment, but the abandoned carts themselves can offer a gold mine of information. 

Depending on your shopping cart software, even thought the order wasn't fully processed, the email details of the shopper and the items in the cart may have been retained.

You can use that information to email the person - after all, you will already know exactly the type of products they were interested in and can tailor an offer to suit.

Autoresponder/ list management software

If you're running autoresponder and or list management software, checked into some of the advanced features that some of these applications offer. The autoresponder/list manager package I use includes a feature where you can initiate a mailout to subscribers who have/haven't clicked a particular link in a previous communication. 

This allows for better segmentation, i.e. trying to stir up interest in a particular group of subscribers such as those who have already expressed an interest in a product vs. those who haven't and need some extra coaxing.

At the other end of things, you can also break up your site into particular subscription segments. For instance, on Taming the Beast.net, I could break it up into search engine optimization, general web marketing, web development, ecommerce etc. and have a different subscriber list for each; easily achieved by having different forms submitting to different list databases. By tailoring content for each of these segments, I may get a better response to particular offers. It doesn't necessarily mean a totally new emailed content for each segment, perhaps just swapping around content to better suit each group.

Of course, these two ideas will only allow you to tap into a small percentage of your visitors; but it may be enough to start understanding more thoroughly your visitors as a group, or series of groups, and tweak your on-site marketing and purchase processes to suit.

Related articles

Shopping cart software reviews

Autoresponder software and list managers

Creating effective landing pages.

Minimizing shopping cart abandonment

Michael Bloch
Taming the Beast
http://www.tamingthebeast.net 
Tutorials, web content, tools and software.
Web Marketing, Internet Development & Ecommerce Resources
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