What is behavioral targeting?
Definitions of BT vary. I looked at many sources and came up with the following: BT is the ability to display your ad on a publisher's site -- either textual or display -- to users out of context, based on their interests and needs from information that was gathered by the third-party publisher.

The important piece here is that BT has a direct relationship to placing an ad on a publisher's site. So we are strictly dealing with placing a marketer's advertising message with third-party publishers. In addition, it's important that we limit the term "behavioral targeting" to user behavior data that was collected outside of a marketer's own web properties.

Retargeting as BT
Retargeting is often used by publishers as a form of behavioral targeting. This happens when a third-party publisher places a pixel on the marketer's own website at different phases of the purchasing funnel.

The early phase of the funnel could capture users who came from an ad to a marketer's site but left early. A lower level of data capturing might occur when a user researched products but did not make a purchase. Both of these groups have indicated an interest in your products, or at least in your brand, thus the retargeting campaigns by third-party publishers focus on getting back to them with a unique message (such as a special offer or coupon), as they are more likely to convert than others who have not been in touch with your brand.

The major challenge for many advertisers using retargeting campaigns is the ability to deliver sufficient numbers of retargeted users to surpass the minimum level of inventory buys. Many publishers make retargeting an integrated element of the campaign buy to get around this issue. Recently, retargeting aggregators have surfaced, where several marketers pool their retargeting campaigns together in a single buy through this intermediary to surpass the minimum buys.

Take another look at my definition of BT. Retargeting takes advantage of a marketer's own data, not third-party data. I always recommend that publishers clearly separate the two in their pitches to clients. Many times, I have heard publisher reps talk about BT, only to discover that they really only offer retargeting.