The foundation of behavioral targeting is that we can analyze a user's online behavior and deliver the ad most relevant to his or her specific needs. Most marketers would agree with this definition. However, if you asked 25 marketing executives what strategies can benefit from behavioral targeting and how they can execute against them in a buy, you'll have 25 different explanations. The truth is that, while all behavioral targeting is based on the one general idea above, there are three main strategies of behavioral targeting that can be matched with different objectives.
Since there are many nuances that allow behavioral targeting to succeed, it is exceptionally important for the agency and the marketer to a) learn the different ways to apply behavioral targeting and b) test what the proper strategy is for a particular campaign. If the agency and the marketer do not have an accurate game plan for using behavioral targeting, then the desired results will not appear. When that happens, behavioral targeting as a whole is usually blamed, rather than the specific application of behavioral targeting that was not suited for the particular objective. Here, then, are three different ways that behavioral targeting can be applied.
1. Inventory extension
Behavioral targeting at its most basic application is the ability to extend inventory outside a specific section of a site-- this is the most basic form of behavioral targeting. This was the first use of behavioral targeting, and is still most common among major advertisers like finance, technology, and automotive companies, who have established buy patterns where media is either bought on an upfront basis or in bulk for a long term period and where, as a consequence, there is high sellout of premium sections. Inventory extension has had the deepest adoption from the marketer level because the advertisers have large budgets and a large core audience set. It benefits them to reach that audience with a greater frequency than standard contextual inventory can support.
2. Life stage targeting
The second concept we can look at is augmenting the definition of your audience by looking at life stages. When we talk about life stages, we're really referring to broad psychographics: preparing for college and being in college, recent graduates, home owners versus renters, new families, growing families, people who are planning on getting married or recently married, as well as focusing on categories that represent affluence, such as retirees. Behavioral targeting can help identify these events by predicting -- and then planning against -- the collection of users' keyword searches and content consumption within the life stages of audiences that best fit their product.
The key is to go beyond a simple contextual buy that will hit the percentage composition of your target audience on a specific page at a specific time. Behavioral targeting allows the buyer to plan against a user who exhibits multiple behaviors within the contextual definitions of your life stage audience over long periods of time, therefore eliminating more contextual waste and increasing media efficiencies.
For example, let's say you're in the market for a car and have been visiting automotive sites searching for mini-vans and SUVs with a third row seat. You are more than likely in an established family that is growing. The oversize SUV also indicates that you are probably in a moderate to high income level. Behavioral targeting, based on your online behavior, has narrowed what ads would be relevant to a growing family: college savings, 529 plans, baby/toddler items, new homes, mortgages, and obviously the makes and models of automobiles that are applicable. Behavioral targeting "colors in" a segment based on something that is a complete departure from a contextual buy. Life stages, then, become fully represented through behavioral targeting and the audience composition is a segmented population with a high close-of-sale percentage.
A third way to apply behavioral targeting is search re-targeting. Essentially, search re-targeting takes users that have clicked on your search ads and have gone to your website, but have not converted, and allows you to re-message them across a network of sites. These are the people that have already been tagged as pre-qualified to the initial message that has been sent and have acted on it, eliminating click fraud and giving advertisers greater ownership of the audience they have already paid for. This is proving to be one of the most effective applications of behavioral targeting, based on dollar-per-conversion. By applying behavioral targeting to search keywords you can take a broad campaign and tailor messages to specific interests based on the keyword or phrase that they searched on. This brings us to a key to this stage: creative messaging.
One overlooked advantage of behavioral targeting -- whether it is inventory extension, life stage targeting or retargeting -- is that it allows you to develop a call to action that is specific to an individual. An added discount or incentive to go back to the website and look for a further conversion can reward those who already have an interest in your brand, product or service. Behavioral targeting permits you to look at the creative delivery as a new strategy in addition to a media plan when you're buying an audience. A creative plan -- where you already have your audience and you know that composition is high enough -- can have a big impact and increase conversions. The best example is for retargeting. The key here is that you're capitalizing on the fact that that user has shown interest in the given offer, and you can enhance that offer when they come back.
The truth is, behavioral targeting can work for every advertiser. It's just a matter of selecting the strategy or mixture of strategies that works best for you. By understanding these flavors and when to use each, every advertiser can find a way to integrate behavioral targeting into any campaign.
Kevin McGurn is director of revenue management at Revenue Science. .