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How well do you know BT?

For businesses, the art and science of effectively listening to consumers is rarely devoid of controversy. And no discipline of direct digital marketing endures more of this controversy than behavioral targeting.


The term "behavioral targeting" elicits radically different responses, depending on to whom you utter the phrase. Those who represent consumer privacy interests cringe when they hear the phrase, while marketers salivate at the enormous opportunities both for generating revenue and for improving the consumer shopping experience. The inevitable and ongoing battle between the opposing interests, however, would be well served by a better understanding of the different types of behavioral targeting in market right now.


Like any strategy or tactic in the direct digital marketing world, grasping the nuances of BT is crucial to complete understanding and effective use. There are three important nuances that distinguish onsite behavioral targeting from its slightly more controversial cousin -- offsite BT.


Nuance 1: Data collection
Onsite behavioral targeting is powered by data that is collected only on a company's website, or by an interaction with its marketing materials that led to a website visit. Examples include website browsing history, a keyword search, or a banner ad click. On the other hand, offsite behavioral targeting -- like an ad network, for example -- is powered by data that is collected on an individual across the entire web.


The difference here is obvious. There is some information consumers willingly share with a company within the context of its website. While privacy groups primarily take interest in data that is collected on an individual across the web, the issue of where data is being collected should matter a great deal to all parties involved.


Nuance 2: Data use
Privacy groups, and some consumers, become very unhappy when they discover that information they shared on a company's website (even if it's behavioral) drives advertising that they see on their favorite blog or a Facebook page. Not only does where the data is collected matter when it comes to behavioral targeting, how it is used also draws attention.


Privacy advocates -- the folks who are actively working to diminish the prevalence of offsite behavioral targeting -- raise red flags quickly when data collected on a company's website is used for offsite targeting. Using data to power onsite targeting strategies designed to remind consumers of content they have browsed previously onsite, however, is simply good marketing, and consumers understand that.


Nuance 3: Perception matters
Both how data are collected and how they are used dramatically impacts a consumer's perception of a company. Both short-term and long-term perception of offsite and onsite behavioral targeting are subject to challenges; yet, while onsite is universally deemed acceptable, offsite faces a much tougher road to acceptance.


There might be some long-term challenges inherent to ad networks and other offsite behavioral targeting. The methods used for gathering customer data and using it will always be exposed to scrutiny at the highest levels. Privacy advocates will bear a torch for even perceived unscrupulous data mining. Simply, onsite targeting is not subject to the same level of data gathering scrutiny that offsite targeting is. Therefore offsite targeting is relentlessly battling perception issues from consumers, privacy groups, and lawmakers on Capitol Hill.


Concerns regarding over-communication and the inescapable "Big Brother" perception can be alleviated by effectively throttling the intensity of the behavior-based experience, most especially with offsite targeting. Some companies might throttle use of targeting based on specific business rules configured within a software platform (like a time limit on specific content being displayed), and others might throttle based on the level of engagement from a browser or the propensity of a customer to churn. If the offsite behavioral marketing is managed properly, then Big Brother territory is easily avoidable.


While the primary types of behavioral targeting are different both in practice and perception, it is possible for the two to work well together for the benefit of all. While offsite behavioral targeting is extremely effective at carrying personalization and relevance throughout the web, the micro-level of understanding demonstrated on the web at large is often mishandled or completely absent when a consumer clicks through to the website.


For example, advertising content from example.com follows a consumer around the web. That content showcases products the consumer recently abandoned in a shopping cart. If the consumer eventually clicks on the ad to return to example.com, that relevance and personalization is often not carried through because of the different data types and feeds that drive offsite targeting and onsite targeting.


Conclusion
If behavioral targeting did not work, marketers would not use it. The truth is that savvy online shoppers crave a deeper understanding from businesses, and behavioral targeting helps marketers listen better and supply that demand.


The good news is that consumer adoption and tolerance of targeting practices -- both offsite and onsite -- are evolving more rapidly than ever. Consumers see the efficiencies in shopping, and marketers are learning how to better identify ways to include behavioral targeting in the marketing mix without being perceived as creepy and over-aggressive. However, it is important for marketers to pace themselves: The market will evolve naturally, and consumer acceptance of more advanced offsite behavioral targeting techniques will come with time. And both must work in concert to advance the industry.


The market's strong desire to self-regulate -- and its ability to organize and execute that self-regulation thus far -- has assuaged many privacy concerns. Going beyond self-regulation to a deeper understanding of the types of behavioral targeting is essential to maintain positive momentum.


Josh Gordon is the editor-in-chief of the direct digital marketing blog The Lunch Pail and director of marketing at Knotice.


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Comments

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Commenter: Jim Brock

2010, July 09

Very helpful post for marketers considering behavioral targeting. When assessing your partners, PrivacyChoice provides resources to assess privacy practices.

Look up any tracking company in our index for details:

http://www.privacychoice.org/companies/all

And ask potential partners to compare their policies to our best practices checklist, available here:

http://scr.bi/cRz0Cl