Not only is it being discussed, it has been adopted by most of the major U.K. publishing groups including Associated Newspapers, FT.com, The Guardian and News International. But despite that, behavioural targeting in the online advertising world is still a very new concept and is being treated with the caution one would expect for something that is breaking new ground.
A discussion on the subject therefore needs to be clear as to what behavioural targeting is -- and equally what it isn't.
Behavioural targeting is about analysing where and to whom an online advertisement is served. Put very simply, cookies are used to track consumer behaviour on the web and identify their tastes and interests. This information is then used to segment audiences to enable advertisers to make informed choices about where they buy space. For example, someone looking online for holidays would then be served advertisements relating to travel. More specifically, if they had shown an interest in a particular destination, the material would be relevant to that location.
The idea of segmentation is obviously not new -- print and broadcast media have relied on it for years. Where the web differs is that results are based on actual consumer behaviour, not on surveys of what they say they do.
What behavioural targeting is not is a Big Brother-style tracking device. Consumers are free to disable their computer's cookies so their surfing activity cannot be traced. Increasingly, they also have a choice as to whether or not to be involved due to new opt-out measures being introduced in the industry. However, whilst these factors are obviously essential to maintain the web's neutrality, a key point to remember is that behavioural targeting gives the user a better online experience because it results in the provision of information that is relevant to them. And, recalling the early days of intrusive and irrelevant banner advertising, it seems likely that this will be welcomed.
From an advertiser's perspective, behavioural targeting has the potential to be a valuable tool because it allows the delivery of messages to audiences that have already shown they are interested in relevant areas. Advertisements can therefore be really tailored to this readership, making them more effective and increasing ROI. This enhancement of online advertising is also of huge benefit to publishers because it significantly increases the value of their untargeted inventory.
So it would seem that the outlook is rosy for this new phenomenon-- and, in principle, it is. But, as with anything with the potential to be so sophisticated, there are some caveats.
First of all, the versatility of the internet makes it an ideal tool for both mass dissemination and one-to-one communication. However, marketers need to remember that advertising is not about the one-to-one experience -- its aim is to reach as many in the target audience as is possible with one message. The technology that enables behavioural targeting offers the ability to segment users into numerous, highly-specific groups. But the danger then is that audiences are narrowed down so severely that money spent on advertising to these minute groups is not effective-- put into basic terms, it doesn't make financial sense to create and produce an advertisement that is seen by too few people.
It is also important to remember that, whilst behavioural targeting is really useful on big portals, on single-interest sites it is less relevant. For example, a user looking at a property website is obviously interested in property. (Although the specific property information in which they are interested can be used to further streamline their profile.)
Finally, the importance of real-time cannot be underestimated. Returning to the travel example, a user looking at holiday websites today may well book their break there and then. So an advertiser who cannot target them with relevant information until tomorrow potentially misses a sale. Even with products and services that have longer buying decision times, it is essential to get relevant information to the prospective customer while their research is fresh in their minds.
Overall, behavioural targeting is one of the most advanced, interesting and exciting things in the digital marketing industry. But just because it can be made to be complicated, doesn't mean it should be. Consumers will not appreciate over-complexity, and it will severely impact ROI. Everyone involved in this nascent trend of online advertising has a duty to use it with the intelligence it deserves and -- perhaps paradoxically -- that means keeping it simple.
Dirk Freytag is the CEO of ADTECH.