Behavioral Targeting

Here is a part of a speech that I recently delivered on behavioral targeting:

"What was the front page ad in today's newspaper? Did the ad target a specific type of reader? If yes, then what about all the other readers who found the ad irrelevant?"

That just about sums up the rationale for behavioral targeting of online communication. All ecommerce businesses, except the extremely narrow niche ones, cater to multiple customer types. For instance, an apparel business targets men and women, grown-ups and children, the brand conscious and the bargain seekers.

So how would an ecommerce business "talk" to all of them at the same time, and still make sense?

In print advertising, media planners often talk about "demographic targeting." But with all the targeting possibilities that online media provides, demographic targeting is too limited.

There is a method to create relevant customized messages, and it is called behavioral targeting. As an ecommerce business, you can observe the customer's online behavior, and customize your communication.

Types of Behavioral Targeting
There is no standard definition on what constitutes behavioral targeting. Here are some of the methods used by ecommerce businesses:

• Remarketing
  Remarketing, or as I like to call it, "online ads that follow you," has revolutionized online advertising. Imagine that I am an ecommerce business attempting to attract customers to my latest offering automobile offering. I will be much more willing to spend money on advertising to you, if you recently visited the "latest deals" page on my automobile site.
  
  Even when you exit my website, I want to continue talking to you. So, I would purchase advertising on other websites that is displayed specifically to you. I could tailor my advertising to display customized ad creatives to you based on your clickstreams.
  
  
• Website Personalization
  An ecommerce business usually has a large array of offerings. So which ones does it highlight? Which ones does it feature on its homepage? By analyzing the visitor's browser clickstreams, the ecommerce website can be personalized to highlight products that the visitor is more likely to be interested in. Website personalization is one of the methods of increasing shopping cart conversion.
  
  
• Deal Customization
  It is not just about which product to highlight, it is also about the type of deal that would work best for you. For instance, if an ecommerce merchant sees that you have visited his Swedish massage page multiple times, he could offer you a small discount to nudge you towards making the purchase.
  
  
• Email Personalization
  Ecommerce players could analyze your movement around their website and trigger an instant email to you with a relevant marketing message. This kind of personalization could make that email stand out among the hundreds of untargeted marketing messages that spam your inbox.

How Is Behavior Measured?
Measuring behavior is not as simple as making sweeping judgments about the customer based on which webpage they visited. Here are some of the common tools that web analytics software packages track to help make targeting decisions:

• Number of pages per session
  
• The IP address of the visitor
  
• The location of the visitor
  
• The specific pages visited

The ecommerce business may actually be able to get much more information such as gender, education, marital status, and interests, if they are able to extract it from the customer's Facebook account. For this, the customer will explicitly need to grant them permission.

Behavioral Targeting Privacy Concerns
While ecommerce vendors will cry themselves hoarse, defending the fact that they target based on anonymous data, consumers will never be at ease as they know that their behavior is being tracked and stored. Worse, the data is probably being sold to advertisers. Privacy issues have also given rise to the likelihood of strong regulatory action on behavioral targeting.