Behavioral targeting by itself is generally defined as identifying consumers’ browsing habits to help you make educated targeted decisions when it comes to future marketing and advertising campaigns.
For those with an online storefront, behavioral targeting is the practice of studying browsing and purchasing habits of previous customers in order to predict what customers will buy in the future. When properly used and interpreted, it can let you know how to properly target your advertising efforts to ensure that you only reach customers who are interested in your services and products.
Behavioral Targeting Pros
1. Allows you to know your customers very well
As the internet continues to open up a wealth of marketing opportunities the need to stay directly in tune with customers’ specific wants and needs will increase twofold. In order to market a product it will no longer be enough to discuss how a product works, but how a product can work for the consumer. Thus, an effective consumer marketing strategy is needed in order to create a solid customer base that recommends your services or products and continues to return for repeat visits.
Marketers should understand their craft very well, and have the guts to operate marketing without fear. This means knowing their customers very well, and understanding that their clients are not the sales reps as in the old model, but the customers themselves. Marketers should be customer oriented and focused. They should keep two marketing truisms. One is to retain existing customers and bring your market to your customers. Existing customers are a great source for new business, and you can bring your market by offering incentives on sales, causing spur buying. Another strategy is to implement win-back campaigns for old customers.
2. Anticipate the needs and wants of your current clients.
With behavioral targeting, you can anticipate the needs and wants of your current clients, and use this information to base your marketing decisions on the assumption that the needs of your current clients will close match the needs of your future clients.
Predictive behavioral targeting allows you to be ahead of the bell curve. For example, iPhone’s global success is due to it being the first among its competitors to give users apps and full easy touch screen internet access. Everyone else that followed was just a knock-off or attempted competitor.
Behavioral targeting can provide consumers everything they need before they even realize they need it, which almost always guarantees a sale. Online businesses can anticipate consumer browsing habits and offer suggestions that lead to your products.
3. Increase your productivity.
Properly used, behavioral targeting is a tool which allows you to increase your productivity without spending much initially. This involves studying the behavior of your average client so you know where to search for them and ensure that your ads are being viewed by this audience. This is a much better solution over putting out a general ad and hoping an interested party will happen to view it.
Behavioral targeting allows you to cut time and costs by utilizing behavioral targeting tactics and focusing your advertising efforts on your target audience. When you place the appropriate service or project dressed in a marketing effort they appreciate, and with a price tag that meets their expectations, your marketing sales profits will skyrocket.
The essential elements to targeting are looking for the right target segment and handing out the right advertisement towards that segment. These elements make advertisement much cheaper, because advertising companies don’t have to bombard individuals with undirected advertisement; they will just focus on individuals who are more than likely to respond to their advertisements. They do this by behavioral profiling, which obtains several kinds of information from users, including site registration data, keyword searches, demographic data IP address, country, zip code, history of ad exposures, among others.
In addition, small businesses that do not have lots of money can still take advantage of the current internet advertising market by employing behavioral targeting tactics.That’s because many advertising companies will use behavioral targeting tactics for you if you contract advertising with them.
4. Marketing Research and New Innovations
Marketers have discovered that there is another use for behavioral targeting aside from online ad sales. They found out that it is a good way to do some research and figure out the kind of people that buy their products; for example, what else are their clients interested in aside from their products.
Behavioral targeting also opens new avenues for the advancement of online advertising. For example, cell phone personalized data shows a lot of useful information, including street location. Combined with online advertising tools, the result is behavioral and geographical targeting, allowing advertisers to know the exact person most likely to buy their product and at the right time.
Cell phones can use zip code, area code and GPS data to let users know where the nearest business establishments are. Ads will show up in your cellphone, selling products sold by local businesses within your present location.
5. A Win-win situation for both customers are advertisers.
Cost-per-click (CPC) will rule the ad industry as advertisers will only pay when the shopper clicks the ad and comes back to the retailer’s site. With this CPC model, innovative ad technologies will automatically prioritize the shoppers with the greatest history of clicking on their ads, while minimizing or eliminating the ads served to online shoppers who have historically not interacted with the retailer’s banners – therefore saving retailers money by not serving ads to those who do not click. On the other hand, online shoppers simply do not have the time or interest in viewing or clicking generic ads that do not apply to their shopping tendencies.
Advertisers only want to pay for clicks that are driving sales, and consumers want relevant ads about products or services they actually care about. A study conducted by PreferenceCentral suggests online consumers are growing increasingly comfortable with targeting and retargeting. A majority of consumers prefer relevant, tailored ads as a trade-off for quality, free online content.
Behavioral targeting is twenty to thirty percent more expensive than other traditional online advertising strategies.
It is not an overnight process. In order to see segment marketing work oftentimes a company needs to rework itself from the management level up and invest in either consultation agencies or a consumer research team. The profits from segment marketing are dependent on how invested and thorough the business is when dividing its market.
2. Doesn’t work for all products
It doesn’t work for all products. Usually behavioral targeting is more effective for products that don’t have mass appeal. If your products are for senior citizens, for example, it may be a tad more difficult to find viable viewers.
3. Privacy Concerns
When the products and services offered by the company require privacy, a person may be annoyed and offended if he or she receives an email offering him those kinds of items and services. There are always strings of privacy attached to any information from individual. Conservatives call it spying when those supposed private information were exposed for the purpose of marketing.
As for now, targeting is modest because of several privacy restraints. FCC rules set limits to the use of location and other customer data. They also set other restraints, such as the ability of users to easily opt out of mobile updates anytime they want to.
Data-mining technology has raised eyebrows as privacy violation is inevitable for all of these used data without permission. Several scientists have attempted to create tools that would limit databases’ ability to extract personal information. Others suggest proper disclosure; one should limit sharing information to companies on doesn’t trust, and share only personal information to those one trusts.
Trust is a main issue, and behavioral targeting companies claim that they are highly responsible for these data, imposing bans and regulations. However, some consumers aren’t confident. They are wary about what these large companies can manipulate users to doing in the future, as they manipulate us into buying certain products now.
Targeted ads are informative, but privacy entails prevention focus among consumers, such that they become more sensitive to the presence or absence of negative outcomes. Furthermore, prevention focus makes consumers more wary of manipulative intent. Ultimately, it is privacy concerns that primarily cause negative impressions on consumers.
4. Problems with cookies and usernames.
The most common way to track user online behavior is with cookies. They are used to track behavior by observing a user’s mouse clicks. The aim is to obtain enough data to record a user profile and determine his/her preferences, so that ads can be personally served, increasing a user’s purchasing desire. The downside of this technique is that there may be multiple users in one computer, such as in public venues. Furthermore, browsers now have the option of deleting cookies and choosing to prevent some or all cookies from gathering data.
Another common technique is the use of username and passwords. THis method is more effective than cookies because tracking a user’s preferences become more personalized. However, some users share their usernames and passwords with others, while it is highly likely for several users to have the same usernames and passwords. It may be frustrating for users as well to keep track of these information in various websites.
5. Problems with location-based marketing.
Location-based marketing is not that popular among the majority. Most of us would prefer privacy with our cell phones. Seeing an ad in our cell phone is not a marvellous event. The ad will need to add relevant information to the situation, otherwise users will get the feeling of being spammed.
6. Health Risks Caused by Highly Influential Ads.
Digital marketing will continue to be a strong force in the society, but it raises concerns about the possible health risks these highly influential ads can do to the society, and especially to the youth and cultural minorities that have a unique susceptibility to obesity and health related problems. Specific digital marketing practices that potentially raise these health issues should be regulated.
For example, some practices make it hard for consumers to distinguish between content and marketing, and blurs the lines between point of purchase and influence.
Generally, these practices should be developed under the considerations of adolescent and child development, government advertising rules, industry guidelines, etc. If not addressed properly, these emerging digital marketing trends could have a long-lasting unwanted effect on the public health.
7. Uneducated clients.
One of the challenges of behavioral targeting is educating clients about it, and helping them understand what it is all about. Advertisers should also be told that while behavioral targeting is effective, it works best when complemented with other advertising techniques.
8. Limited Reach.
Behavioral targeting is very effective for highly motivated consumers, but consumer preferences change rapidly; a slight targeting delay backfires for the consumer. Behavioral targeting may ignore potential customers, especially those who need motivation and influence.