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Behavioral Targeting

What is Behavioral Targeting?

Behavioral targeting is an advertising technique used by online marketers, advertisers, and publishers to present targeted ads to consumers. This is done by gathering information about their browsing behavior, for example the pages that have been visited, time spent on the site, the clicks made, and overall interaction with the site. This knowledge is then used to deliver ads that are specifically relevant to the user.

How does Behavioral Targeting work?

Behavioral targeting is based on customer insights such as web browsing activity collected over a period of time. This is quite different from the more common targeting method of displaying ads matched to the specific content of an individual page or to all users in general. With behavioral targeting, this would mean that two people could see vastly different ads when viewing the identical webpage at the same time.

As we have said before, the behavioral targeting consists of gathering information about a certain visitor and then delivering appropriate content that is relevant for a given persons profile. The data gathering which is one of the most crucial parts in an effective promotional campaign can be done in multiple ways. The data can be gathered from multiple sources, such as websites, mobile apps, CRM systems, and other potential information sources. The data that can be used to gain insights about the customer can be:

  1. Geolocation information
  2. Duration of customer visit
  3. Clicks
  4. Pages viewed
  5. Interactions with objects on the website
  6. Purchase history
  7. Search data
  8. Demographics
  9. Frequently visited pages
  10. Website visit history

Most of the advertisers and publishers are capable to obtain onsite data about their customers and visitors. The ability to order and systemize the data sourcing is critical for creating effective customer profiles and their behavioral patterns. Knowing your customers, their characteristics, and their behavior is a direct method of increasing conversion rate of your enterprise.

How the process works

Step 1: Data Collection and Analysis

During the stage, the data is collected from a variety of sources. Most companies use integrated tracking pixels in order to track user behavior and record it. These are also called as third-party cookies and they are normally stored within the website server (Data Management Platform). The gathered data is then used to segment the users based on their behavior and characteristics. It has be mentioned that apart from using the data from company DMPS and other Ad related source platforms, the behavioral targeting can also be enhanced with data from customer profiles that are registered within the system. There are various examples how this can be used. 

As a typical example would include a registered user making a purchase in an online store. The sales data with users navigation history are stored and analyzed in order to create individual target offers for this user whenever he comes online. Another example is when an unregistered user can be tracked and targeted through the use of cookie information that is stored and saved in the users browser. As soon as the user visits the same website again, the cookie is activated. It sends itself towards the web server and this makes it possible for the website to recognize the customer, target him and display a relevant ad.

Moreover, there also exist another method to collect and track customer data. This can be done via internet service providers who are capable to perform deep packet inspection in order to investigate their visitors traffic and reveal the websites that they visit. After the data is gathered by the internet provider, it is sold to the marketing and other ad-related companies. This data is later used by other companies to deliver individual custom ads based on user characteristics.

Step 2: Segmentation

After the data is gathered the customers are divided into different segments based on their behavior characteristics, such as for example, people who buy the same product frequently are clustered into one segment, while new customers and allocated to another one.

Step 3: Data Application

As soon as the data has been gathered and segmented, the ad campaigns can be implemented. The campaigns will use the data that has been obtained previously in order to create a more relevant advertising angles and match people’s interests. Through The creation of relevant and interesting advertisements, the campaign will contribute towards increasing the chance of conversion, customer response and user experience. 

Benefits of Behavioral Targeting

Behavioral targeting can be described as a powerful marketing tool as it provides a great value to both, the customer and to the advertiser. Through the use of behavioral targeting you are capable of creating personalised advertisement messages to your customers, based on their behavioral patterns and characteristics.

Advertiser Benefits

1.Enhanced user engagement 

Understanding the habits of your customers can help businesses and advertisers to identify individuals that are engaged with a specific type of product or area of interest. Moreover, through improved engagement, the advertisers are able to identify audiences that in particular moment during buying cycle and therefore, the businesses can influence these customers and engage them with their promo materials or products. 

It is highly advised not to target individuals who have low brand awareness or no intent or interest in your product portfolio, as this will result in even lower engagement. Through the use of behavioral targeting, the advertisers are capable to increase the metrics like clicks, conversions and overall reach.

2.Creating relevant advertisements and matching them with consumer needs

Through the use of personalized messaging in advertisements, the businesses are able to increase the conversion rates and reduce the amount of budget that is spent for advertisements and then wasted. Relevant ad content are much more effective when compared to general ads in moving the customers along the sales funnel. 

3.Improving Return on investment

Most advertisers are looking to maximise the return on investment during their promotional campaigns. By delivering the advertisements that match interests and wants of the audience, the business are able to enhance conversion rates and increase ad performance. By using behavioral targeting, the companies will see a rise in repeatable purchases, customer retention metrics, engagement and overall customer experience.

Consumer Benefits

1.Improved user experience

Most customers are not enjoying the fact that they have to leave something behind when they visit a website. People tend not to trust strangers and therefore are weary when giving up personal data. Moreover, people do not like ads that are irrelevant or when the website experience is damaged because of the unfitting advertisements. Through personalisation, the customers are able to view advertisements based on what they like. This alone eventually contributes towards improved user experience of your customers.

2.Faster search, faster results

Advertisements can act as a shortcut for the purchase, by providing the customers with a faster way of finding the best product without any tedious search. Instead of looking for the product, the product itself finds the customer, therefore increasing the efficiency for customers, saving their time and allowing them to find the products that is relevant rapidly.

3.Better product awareness

Customers are able to stay up to date with product releases, as personalized advertisements will make sure that the customers is aware about the new features of the product, new product release or any other information that is new and relevant for the product. Furthermore, retargeting based on consumer behavior, helps the customers to remember about a certain product that they have viewed but forgot about it, left the page, or didn’t buy it, as the advertisements will show the products that they were once interested in.

Publisher benefits

The behavioral targeting is also able to help the publisher, as publishers use ad monetization as a main source of revenue. In order to stay on foot, the ads should not be irrelevant as irrelevant ads will affect the user experience negatively. The websites with poor user experiences get poorer search results within the search systems as a result decreasing the number of visitors on the website and its revenue stream. 

An example of behavioral targeting would be the following:

A person who frequently visits sporting sites might encounter ads for soccer tickets or basketball shoes on a webpage about the local business economy, while another who visits travel sites regularly might see ads for vacation packages or travel agents. While not at all related to the content of the website about the local economy, these ads are still specifically targeted to a particular user at a particular time.

To accurately track online behavior, websites use small pieces of data called cookies. Cookies are small files of letters and numbers stored either in the temporary memory of a computer and are deleted automatically once the browser is closed, or they are placed onto users’ hard drive to gather data about electronic shopping, online searches, page visits and more. They allow a website to recognize a user’s preference when they return to a website (language, shopping basket contents, etc.).

Data used for Behavioral Targeting

Behavioral targeting utilizes several pieces of data which allows for the creation of a user persona or profile that can be used to segment the audience into certain types. Here are two pieces of data that advertisers and publishers use to create targeted ads:

IP address and geolocation

One of the most basic segmentations advertisers make is targeting audiences by where they live. For example, ads pertaining to discounts and sales offerings can be targeted to a specific region.

The recency of the visit

A repeat visitor can be targeted by showing related content based on what they have search for in the past. This is an effective strategy for retargeting consumers who have already shown an interest in a product or service, moving them further towards conversion.

Benefits of Behavioral Targeting

Because behavioral targeting is about delivering the right message to the right customer at the right time, it is preferred by both advertisers and internet users. Below are the benefits of behavioral targeting:

Higher clicks

Behavioral targeting generates higher click numbers because it allows advertisers to reach out directly to a particular demographic or niche, which means that less of the marketing budget is spent on trying to attract and convince people to buy, and more of it used in transforming visitors into customers. Hosting advertisements that consumers find more interesting means that they are far more likely to click and consider the products and services offered.

Converts Visitors to Customers

By monitoring and tracking online consumer behavior, learning about their interests and preferences, advertisers are able to deliver the right sales strategy to the right people. In other words, behavioral targeting allows advertisers to give customers exactly what they want. Although it may not appear to every member of your target audience, it does give advertisers a greater chance of appealing to customers who are further along in the sales funnel and are more likely to convert.

Cons of Behavior Targeting

What type of user information do Data Management Platforms record?

At the current state computer browsers are the source of the biggest consumer data that is used for targeted advertisements. Most DM Platforms are going beyond simple web data that is obtained through tracking pixels and other technical innovations, as consumers are people with a great deal of different interests and preferences in any field, from work to leisure. Some of these preferences can only be determined by looking at the behaviour of those individuals online. This is the reason why DM platforms are focusing on looking at offline and other data information that devices gather on a day to day basis.

There exists a great number of the ways through which data management platforms can gather and information that is relevant for establishing consumer regular habits and preferences. These can be:

Device Data: Cookies that are stored on the computers, tablets or smartphones are one of the most valuable data sources that can be used to track the buyers behaviour. Cookies track user activity, communications, navigation history, search queries, social media activity, check ins, purchases and other relevant information that can be used by the companies in order to create appropriate and engage advertisements for spot on targeting. 

Input Information: In order to gain full access towards the website features the users are required to create an account, choose a subscription plan or fill in personal information. The data management platforms can utilize this information from the users input such as ZIP codes, contact information or any other data field that is interesting for the company. This information allows the company to predict consumers’ purchase needs, location and time.

Geographical Position: It can be said that mobile devices aren’t the only information source that can indicate consumers geographical whereabouts. Whenever a computer is accessing the given webpage in the website, the data management platform can retrieve the IP address from this computer. This identification code can be used to track the location of a given PC that just accessed the website. Companies can use IP addresses in order to track or estimate where the consumer lives, works and spends leisure time in. This data alone can be used to create relevant advertisements and target the individual with appealing content.

It has to be noted that gathering some of this data combined with creating appealing and engaging content can be challenging. However data management platforms are here to help and make this process, easier and more convenient for the end user. On the other hand the data management platforms are unable to reveal the real motive for some of the user activity as it all comes down towards the human individualistic behaviour. In order to stay relevant the DMP has to observe a wide range of data sources and simultaneously record relevant information so that it can be combined and used to deliver appropriate advertising content.

What kind of Consumer Behaviours do DMPs track?

Companies that focus on behavioural marketing are always on the lookout for the behaviour of their audiences. The information about the customers can be gathered in many ways and many information types can act as indicators of consumer behaviour. 

  1. Frequently Visited Pages: The DMP can check the pages that the user visits, whether they visited it multiple times or one time, if they have visited it in the past and now they are a returning client. Through the analysis of the page visit history the company can get to know the behaviour patterns such as why the user visited the website in the first place. The potential example of such activity can be a case when the consumer bought something a while ago and the system is opt to predict that he might commit a second purchase as a result the DMP will suggest to focus this user with relevant advertisements.
  2. Viewing times: This can act as a solid indicator of the interest level to the content that they view on a particular webpage. This knowledge can be used in order to tweak the content in a way to keep the viewer for a longer period of time in order to engage him with the company and its service portfolio. 
  3. Clicks: One of the best sources of information about trigger interest of the consumer is the information that is revealed by analyzing the links that people click. Click habits can help to reveal users’ objectives, the kinds of products that they are looking for as well as the types of information that trigger their interest. Understanding those interests and people’s needs can help to create engaging content and contribute towards enhancing marketing campaigns.
  4. Webpage Interactions. The information of what people click in, where they stop their scroll and which website elements interest those users can help to narrow down what people are looking for within the website. User goals vary from person to person and understanding individuals motives is a key for establishing a connection with this individual through the use of the website.
  5. Web Search Queries: This information is able to help to reveal what kind of objective a user has or how the company can help him reach this objective. The potential example of this situation can be when a user searches for a specific good and then leaves the website and comes back, the DMP can show this item right away to him without him needing to search for it. Moreover, the search history can help to create a customer portfolio and reveal his motives for engaging with the company and visiting the website.
  6. Time Gaps: The time gap between the user visits can indicate the crucial points for the advertisers that can be used in the future advertising campaigns. For example, a short absence can show the observer that the viewer is highly interested in a given product, whereas occasional visits are going to indicate that the content is interesting and engaging, but the website itself is not the core interest of the given user. 

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