Behavioral Targeting 101

"It were a journey like the path to heaven, to help you find them," the great English poet John Milton wrote in 1634.

Now, in 2004, a number of behavioral targeting infrastructure and software companies are on a journey to help advertisers find "them" -- potential customers whose Web-surfing patterns and behavior indicate a willingness to be receptive to customized offerings for their products and services.

"You have to think about where all this starts. It is about giving the consumer as much relevant advertising as you can, via addressable mediums," says Dave Hills, president of media solutions for 24/7 Real Media.

"In behavioral targeting, the most important issue is starting with the right data," says Dave Morgan, CEO of Tacoda Systems. "There is a hypothesis of what are the 10 to 15 available data points you can use that can significantly impact the value of an audience member. It is not about data mining, or amassing data, but on focusing a collection of high-value data points."

The key, then, is finding these high-value data points. The overriding and proven assumption here is that what pages Web site visitors click on and where they go from those pages indicates at least a presumptive interest in buying products related to the topics that they click on. For example, repeat visits to a Web page with reviews of sport utility vehicles, coupled with a cruise to the automotive section of classified ads on a site, clearly indicate at least a curiosity about SUVs.

Now, let us suppose that same visitor is also going to pages where she clicks through to an online book seller to a book about how to help your child adjust to kindergarten. Behavioral targeting specialists may look at this data and start to conclude that the site visitor is looking for an SUV to fit the transportation needs of her growing brood.

Often, this information is not just gleaned from one visit, but repeat visits over time. Perhaps on the first few visits to a newspaper site, most clicks are to articles about SUVs. On the second visit, or maybe the third, the articles are revisited, but the customer also clicks on the automotive ads. It does not take a degree in rocket science (or in marketing, for that matter) to recognize the likelihood the customer is on a likely trajectory from "investigate" to "purchase."

"We have learned there's no question that quantifying the quality and acceleration of surfing habits can be a significant indicator of purchasing intent," says Morgan.

A Dallas Mitsubishi car dealer used contextual advertising within the automotive section of DallasNews.com to deliver targeted banners to consumers. The newspaper served the same ads, which appeared in the summer of 2003, when visitors returned to DallasNews.com even if they were outside the automotive area. The dealer used Tacoda's Systems' Audience Management System targeting capabilities to reach visitors whose prior actions suggested a keen interest in the advertiser's message.

Belo Interactive, which oversees DallasNews.com, reported that the response rate among the target audience was 7.7 percent as compared to the national average of 0.33 percent. These ads played a part in doubling the number of credit applications the dealership received, and increased the number of online searches by 17 percent. The DallasNews.com campaign generated 44 percent of the total phone calls into the dealership, at a time when several other automotive promotions were running in other media.

The world of online news is fertile ground for behavioral targeting solution providers. Tacoda, for example, works with USAToday.com, Tribune Interactive, Advance Internet and Weather.com.

It has a lot to do with the nature of dead-tree newspapers and their online counterparts as gatherers of timely information meant to serve readers with a collective trove of interests, concerns and hobbies. Plus, the nature of the news is that it frequently changes, a dynamic process in which new pages of at least presumptive interest get posted all the time.

"A lot of inventory is available for newspaper online publishers," says Brian Handly, CEO of Accipter Solutions, Inc., based in Raleigh, NC. Also the broad scope of categories -- sports, business finance, even the classified section -- and the ways in which the user goes to the local level, shows that they are interested in finding these people."

Tomorrow: What differentiates companies in this space.

 

Comments

neal lasta
neal lasta May 25, 2010 at 11:17 PM

Hi! You made a very nice point about the nature of dead tree newspapers and how, with respect to advertising, they are inferior to behavioral targeting employed by online advertising.

May I add that another reason why behavioral targeting is superior is because it is aimed at finding potential customers and presenting your product instead of waiting for them to stumble upon you. This just reminds me of the article http://behavioraltargeting.biz/target-marketing/