You are giving off a lot of personal information online. Signing up may ask for your name, zip code, among other info, but big software companies such as Microsoft know more information thank you think they do. For example, they know exactly when you check your inbox, and the average monthly income of your neighborhood. Indeed, these companies aggregate and collect data in very complex ways using complicated tools that record user online behavior merged with other data. Many users are unaware that these companies know so much about them. This is the summary of an article by Michelle Kessler and Byron Acohido, which talks about targeting behavior and mining for online user data. You can get the pdf of the behavioral targeting article here: Data miners dig a little deeper

Behavioral targeting

Behavioral targeting is the main technique for this agendum. Companies like Yahoo observe online behavior of their users, know what they are most likely to buy, and create targeted ads that they sell to advertisers. This is also done by online retailers through cookies, which keeps track of the websites you browse. Behavioral targeting is growing, and online advertising companies are making it their top priority. They point out advantages for both consumer and advertiser. For the latter, they can charge higher for reduced annoyances and more relevant ads. For the former, a user will be pleased to find out advertisers know exactly what he/she needs.

Loyalty cards

Brick-and-mortar companies are doing the same thing through loyalty cards. For exchange of personal information, users get discounts. Catalina, a company that collects the data from 20,000 stores, analyzes the data and creates a portrait of the shoppers, which gets more accurate over time. To date, loyalty cards are growing rapidly, ensuing concern among privacy enthusiasts.

Data-mining

This spawned a new industry called data-mining. Data-mining software is basically used to analyze massive amount of data to help companies figure out which set-ups work best for their company. But as technology progresses, data-mining is becoming more complex. For example, some software take personal records and compare it with thousands of others, looking for any kind of relationship. This method is implemented in Las Vegas Casinos.

Trust: a main issue

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 one doesn’t trust, and share only personal information to those one trusts.

Trust is a main issue, and these 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.

A kind of customer profiling in online firms is called behavioral targeting. This method uses 3^rd party cookies to know the browsing behavior of users. This method is quite effective, but some concerned citizens are calling it an invasion of privacy. This concern is even more prevalent with the cooperation of Internet service providers (ISPs), who intercept web traffic without user consent. This is the summary of an article by Daniel Rice, which discusses a simple solution involving user compensation in light of privacy concerns over behavioral targeting. You can get the PDF of the behavioral targeting article here: Behavioral targeting and economic compensation

Dangers of shared information

Individuals can provide online information about themselves to help the cause of businesses and other organizations. For example, individuals may share information about how many times they drink alcoholic beverages in a day. This helps doctors make better diagnosis, but also exposes the individual to abuse because of that shared information.

Targeting for online marketing

The essential elements to targeting are looking for the right targeting 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 the individuals who are most likely to respond to their advertisements. They do this by implementing behavior 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.

Privacy concerns for behavioral targeting

Online advertisers resort to other ways to obtain information if the former doesn’t work out. They can use behavioral targeting, which cooperates with ISPs involving secret collection of user data. As expected, privacy advocates are on the watch. They even appealed to the government to appoint a privacy czar. This wasn’t approved but privacy was listed as top priority, and measures were done to secure privacy, specifically online trust issues. On the other hand, surveys show that trust is still a concern among majority of individuals.

Economic compensation as a solution

One simple solution to this problem is for advertisers to compensate users for allowing them to obtain third party information using behavioral targeting. For example, when a user visits the website, http://www.getstuffforless.net, that user will receive some form of compensation if he lets advertisers get info from him. More compensation will be awarded if he pries deeper into the website with a much more detailed URL, such as http://www.getstuffforless.net/watches/designer/gold.

This economic compensation model should allow three things: 1. 3^rd party marketing bases their compensation on browsing info. 2. Users will allow this. 3. Fair and secure compensation. However, cheaters, who may use strategic browsing to increase personal revenues, in the user end should be considered. One way to deal with this is by setting a monthly or daily compensation limit. Anomaly detection technologies can also be used for this concern.

When I launched Behavioraltargeting.biz last year I did not think that it would interest many people. Actually – let’s be honest about this: I put up some content to make the domain “sell-able”. I didn’t expect what happened next: People started reading and asking questions.

I actually got curious…and behavioral targeting fits pretty well in my portfolio as it combines the topic of my study (Master in (Behavioral) Science) and my daily work as a Internet Marketing consultant. I just asked one little question on Linkedin: “Who do you consider to be a leader in the industry of Behavioral Targeting”. A few weeks, many interviews and phone calls with CEO’s and CTO’s later I am baffled: This is actually a topic people are very interested in at the moment – and there isn’t much information yet, besides to – often very scientific studies – that are often waaaay to complicated for people who have not studies stats for years – and the opinionated articles in general journals, that often focos on the privacy part of Behavioral Targeting.

I would like to show you who is reading this blog, but I cannot. I do respect your privacy. What I can show you is the wide variety of people that have searched for the content of this blog on search engines in the last few weeks. If you read through it you will get an idea of what this blog is about and what interests the readers.

Thank you for your interest in Behavioral Targeting and your trust in this blog. I will strive to keep up producing interesting articles that give you objective information about what is going on in this very new and interesting field of advertising.

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the internet has become a major avenue for advertising, toppling

Response rates to banner ads have decreased dramatically, paving the way for two strategies for online advertising. One is ads incorporating audio and video to make them more appealing, and the other is Google developing Adsense; displaying simple text ads that are targeted to content. This is the summary of an article written by Avi Goldfarb and Catherine Tucker, which investigates both strategies and their effectiveness for online advertising, and how consumer perceptions of privacy and intrusiveness affect them in such. You can get the PDF of the behavioral targeting article here: Online display advertising..

Data gathering

This study incorporates a large randomized field data from 2,892 distinct web ad campaigns of various products, shown on many different websites. On average, there 852 survey takers per campaign. Furthermore, consumers are randomly exposed to the ads or not, and campaign lasted for 55 days. Furthermore, respondents answer online questionnaires with five-point scale as to what extent a respondent is likely to buy a certain product, and whether one recalls the ad. Income, age and number of hours online are also asked for regression purposes.

Contextually targeted and High visibility advertising

There are 3 kinds of Banner ads compared in this study: 1. “targeted” and page relevant where product category matches website category, 2. “obtrusive”, using video, pop-ups, etc., 3. and both targeted and obtrusive. Comparing groups exposed to the one among the three ads versus groups not exposed at all (control), the 3 types of banner ads are evaluated to see which is most effective.

Methods

Effectiveness (purchase intent) per individual is measured as a function of contextual targeting and high visibility. Estimation is done by converting effectiveness function into linear model of visibility, which features advertisement-web and viewer characteristics. Furthermore, the random nature of data allows for estimation of ad exposure effect through a difference-in-difference equation, which features effectiveness and a control for possible demographic disparities among ad exposed group and control group. A direct estimation is used because of the random nature, experiment-like setting for data collection. A groups’ purchase intent is investigated to find whether the difference between control and exposed groups relate to ad visibility and ad-website content relations.

Combination nullifies individual success

Results show that increase in purchase content is shown for targeted and obtrusive ads, where contextually-targeted ads are slightly more effective. Surprisingly, however, combining both techniques nullifies the success each has separately; it is significantly negative. This result is more pronounced for categorically “private”  products, and private-minded people.

Highly visible ads have higher recall than contextually-targeted ads. Combining two techniques are shown to not have significant effects on ad recall. Thus, the negation effect must be due to resulting influence in customer behavior. Results suggest that by combining both techniques, consumers feel that advertisers are putting a more conscious effort to manipulate them. Targeted ads are perceived as useful, but combined with obtrusive techniques, they become perceived as manipulative; a negative effect on how consumers perceive the advertised products.

Privacy as the primary factor

Negation among consumers is increased when both are implemented because of privacy concerns. Targeted ads are informative, but they also raise privacy issues. Privacy entails prevention focus among consumers, such that they become more sensitive to 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 when both techniques are combined. In this study, privacy is stratified when users check the box “I prefer not to answer that question” for income, segregating privacy-minded people from respondents. Privacy-minded people affirm highly visible ads, as long as they are not contextually targeted.

Other results

This study also clarifies online advertising through its extensive data gathering which allows for more generalized conclusions on the success of online advertising. One conclusion, for example, states that there is 3 to 4 percent boost in stated purchase intent through online advertising, although banner ads are shown to have small effect on consumer’s likeliness to make purchase and ad recall.

Implications

The results explain the unexpected success of Google Adsense, with ads that are not visually appealing but wouldn’t be as effective if made into such. These results also have relevant economic implications. $664 billion is spent each year for ads that are both obtrusive and targeted. Advertisers could spend 5.3% less and still maintain performance of their ads, which are no more as effective as standard banners. Another implication is that government policy regulators, on use of browsing behavior data for advertising, should weigh the two strategies carefully in light of viewers’ demand for privacy and reduction of manipulation.

Parkland, Florida. — Monday, June 14, 2010 —Blue Umbrella Inc. An R&D company pioneering in indoor navigation, today announced an indoor navigation solution that according to the company president and chief scientist “will have a game changing” impact on the market.

The solution aims to open an untapped market – the indoor, where we spend more than 80% of our time and where GPS or ordinary navigation method prove to be unreliable. Ehud Mendelson, the company president, explains, “indoor navigation is completely different than outdoor navigation, to be practical there is a need for better accuracy below 1m, well below the existing method provided today, as well as speed and easy deployment “.

Blue Umbrella’s method uses the existing Bluetooth available almost on any phone and tiny, low cost (Below $10) beacons installed in a known location in the area like a mall or store. The beacons provide a proximity triggering mechanism for a fast and easy deployment with superior accuracy (below 1m) to even product in an aisle. Mendelson notes, “ What is unique that the tiny tags/beacons are autonomous and there is no exchange of communication between the beacons and the user resulting in faster locating without even need for cellular or internet , it also saving the user’s battery power”.

The company tailors a special patented applications for the indoor users to be used in everything from finding specials, sales, and coupons to finding where you park your car and in an emergency even providing you with alarming and notification and directing you to the exit route. The products in development are part of 14 applications for indoor use, based on patents pending going back to 2005. They include Indoor Navigation™, Nav4mall™, Nav4Store™, Nav4Sale™,Nav4Museum™,and Nav4Indoor™ to name a few.

“The needs for Indoor navigation is not limited to the shopping mall, we see it being used inside department stores, and even in supermarkets, commercial buildings, shows,
conferences, and museums as well as hotels, resorts, amusements parks, and at any places like downtown where there is a need for better accuracy than that of today’s method” .

Aside from the user navigation, the company developed “ Sales sense™”, a next generation marketing method for the mall or store owner to benefit from analytic information (without reviling user identity).The innovation, which includes marketing and privacy control tools, brings web-like sales tools to real life and real time application benefits the facility business owner for the better shopping experiences.

In view of the emerging market and this huge opportunity, the company is seeking a strategic partnership for the go-to market, “In today’s tight GPS, outdoor navigation, and LBS (Local Based Services) market, indoor navigation may represent a huge new and promising market. Our mobile infrastructure platform and application can be easily integrated with existing locating and navigating solutions and serve as a turn-key for Tel /GPS/manufacture/operator and local search and advertising applications for the huge emerging market around the world. The market possibilities are endless!”

Blue Umbrella Inc., is a privately held company with headquarters in Parkland, Florida. The Intellectual property includes 7 patents pending going back to early 2005 as well as Trademarks including Nav4mall™, Nav4Store™, Nav4Sale™, Nav4Museum™, Nav4Indoor™ , Indoor Navigation™ , Search4parking™ Return2parking™ Nav4Realy™ Nav4Emergency™

Ehud (Udi) Mendelson
Blue Umbrella Inc

News release:
http://news.thewherebusiness.com/content/blue-umbrella-indoor-navigation-offers-one-metre-accuracy

Short presentation:
https://www.box.net/shared/1jqf90it36

Short view of our innovation:
https://www.box.net/shared/ke16vg7de2

The internet has become a major avenue for advertising, toppling down other traditional media such as TV and newspapers. Newspaper ads, in particular, have shown significant drops in annual revenues over the years because of competition from internet advertising. According to many, the unique feature of the internet is its ability to give out information to a targeted audience. This is the summary of the paper by Dirk Bergemann and Alessandro Bonatti, and it is all about investigating the role of targeting in ad allocation across different media, and the equilibrium price for advertising. You can get the PDF of the behavioral targeting article here: Targeting in Ad Markets

A model to compare old and new media

This study aims to create a model which compares the new and traditional media. The model created in this study is one that involves a lot of markets (media) and products (advertisers), and a variety of buyers distributed across the media markets. The changes in targeting technology are systematically analyzed, and advertising and product markets of various sizes are ranked using a hierarchical structure. Particularly, the tension between value extraction and competition is being investigated. This tension is investigated extensively because it is believed that this is the main issue regarding the continuing improvement of targeting among all media involved.

Value Extraction

In the first part of this study, it was assumed that the consumers are distributed across all advertising markets through an exponential distribution. As the distribution gets bigger, a match between advertising and consumer increases, and as a result, social welfare increases because advertisers have a higher chance of reaching the kind of audience they want. At first, one would think that this implies that the equilibrium advertising prices will improve as well. However, this study shows otherwise, because another factor interplayed. This factor is a weaker competition as the concentration of consumers increased. What this weak competition does is that it lets advertisers focus on a few markets and neglect the other markets. The advertising value may have increased, but the advertising price has declined because of this.

Competition

The second part of this study discusses the competition for consumer attention among advertising markets. In this model, an advertiser can use two different media to send his/her message to a consumer. Competition between two offline media and an offline vs online media is then investigated. For the first scenario, it has been shown that the equilibrium prices of the two media are equalized, and advertisements are assigned on different media based on the total supply. On the other hand, competition between online and offline media is more complicated, because each of the two media must compete for every advertiser. This study finds that because of online media’s advertising capabilities such as attribute and behavioral targeting, competition with offline media will lower the latter’s price of advertisement, but even more so, for large capacity online medium, it will lower the offline media revenue more than a competition with another offline medium would.

This is the summary of the article written by Maciá-Fernández, et al., which suggests a method that ISP’s can use for behavioral ad targeting without violating the Federal Wiretap Act. You can get the PDF of the behavioral targeting article here: ISP-Enabled Behavioral Ad Targeting..

ISP’s efforts to implement behavioral ad targeting

Online advertising is worth $20 billion, with the biggest player in Google. Google has gone on to become rich because of their subscriber’s web browsing. In contrast, ISPs have been reduced to ferrying internet traffic for subscribers, but unable to win their online spending. To resolve this, some ISPs resort to collaborating with companies that use deep packet inspection techniques; techniques that intercept web page requests to apply behavioral ad targeting. However, there is a legal issue behind this. ISPs, unlike Google, are not exempt from the Federal Wiretap Act, which simply states that it is illegal to “intercept the contents of communications.”

To somewhat resolve this issue, some ISPs developed “performance advertising services,” which allowed users to opt-out of the ad targeting anytime. Still, there’s a general fear that opting-out doesn’t include online data collection.

Using TCP information for legal ad targeting

However, this study shows that ISPs can make their behavioral ads and user tracking legal. For this, the controversial deep packet inspection techniques and reverse engineering user browsing patterns must be abandoned for an alternative. The main challenge is if it’s possible to use the browsing patterns visible in the limited information found in the TCP layer. Then, website features are extracted for profiling. These features include location, link, cacheability, etc. The two kinds of data are then correlated through a designed algorithm.

This study was successful in looking for web browsing patterns in the TCP headers. The previous illegal technique involved packet-level network traces, and the method used in this study is aimed at knowing the websites visited by users without touching the packet payload, or the essential data carried by the packets. Furthermore, this approach is made for access ISPs. These are ISPs that are required to record TCP packet headers somewhere where it can be tapped in the network.

The first goal is to extract total number of web pages entered by client, and location and size of root files, a file that is found in every website and is connected to objects defining the website. These user subtraces are then separated into slices. The TCP packet headers of each slice are then used to recover website features. Then, they use what they call a Detection Algorithm, to correlate the information in website profiling and the features extracted from TCP headers. Several phases are described in the algorithm, including tagging phase, and selection phase.

Evaluation

The algorithm was successful in obtaining very high detection rates. It is mentioned that this high quality performance is attributed to the algorithms ability to obtain statistical page diversity at all explored websites. Furthermore, when websites are outdated, the algorithm shows that its detection is flexible with time.

www.youtube.com/watch?v=jXoDSu12ces

In this Youtube video Jack Myers and Mark Ghuneim explain what the implications of behavioral targeting are and what you should do as a business to use behavioral targeting AND have a good and open relationship with your customers.

The coming of the Internet marketing

Internet marketing is an exponentially growing trend in business today; however for most of the 20^th century, advertising relied on traditional ways to disseminate information through conventional media. The results are good, but the expenses are colossal. The coming of the Internet marketing has brought in major impact on how advertisements are being done. One of those innovations is behavioral targeting. To date, the concept is not so new but its influence is greatly becoming popular as the battle for ROI (return of investment) stiffens with the fierce competition.

The need for effective advertising

The need for effective advertising is a glaring issue for entrepreneurs in this year and for years to come. Behavioral marketing provides effective ways to advertise to marginal groups that have the potential to buy it. The year 2010 is an excellent opportunity to expand its market and broaden its acceptability to entrepreneurs and consumers alike. The use of individual behavior in the internet on sites they usually view, purchases they made, and other activities is such a powerful tool to identify the needs of individual. The strategies may seem to have change over the years but the purpose is always the same for marketing and that is to earn profit at minimal expense.

Future behavioral targeting methods

The trends for behavioral targeting has a different curve for the year 2010 and onwards, as the category for targeting will now include family size, gender, age and income to perfectly accommodate not only the needs of individual but also his family; taking into consideration their purchasing power. With the addition of correct information, the products and services that will be offered will also be tailor fit to every aspect of the consumer. Behavioral targeting methods are also being developed with the building of a new platform that accurately measures the attributes of the audience in addition to impression, click and conversion metrics. This tool will be effective in providing advertisers with accurate picture of the specific audience that saw and interacted with each of its ads. The audience is calculated by variable and customizable metrics applicable to each marketer. These insights not only define and track audience metrics, but also help shape future marketing and even product decisions.

Reading the minds of consumers

The use of SEO and SEM to direct traffic in the internet is a successful tool in conquering the internet marketing supremacy. Reading the minds of consumers is a battle for behavioral targeting to be surmounted this present market situation. Predicting however is never an exact science as the history tells about it.  Forecasting the future needs can be as simple as looking at the calendar. Subtle weather changes and holidays can drive sales for specific business. According to the book “Reading Virtual Minds” (aff) by a behavioral scientist Joseph Carrabis – Through computers, we can be able to identify future behaviors recognizing the overt and covert cues from individual consumers. Understanding the inherent possibilities of consumers can help advertisers to mount actions to take advantage of it.

The challenge for every online marketer has always been how and when to position the advertisement at the right time and at right customer. With the use behavioral targeting, identifying the intended audience for the specified products and services is very much possible. These methods are more likely to bring ROI (Return of Investment) than sending the message to everybody which could only reach a handful of interested audiences who are willing to give a positive reception.

Identifying the right time for consumer’s needs is always a primary concern for any business. The opportunity that behavioral targeting gives them is the power to see and come up with the actions to satisfy their needs with timely and audience specific advertisements.

Websites keep the files from individual who log in, purchase, or any other transactions and keep them as cookies; these files can be used for behavioral targeting. The information gathered from individuals becomes a valuable asset for companies who want to generate advertisements for persons who are more than likely to be interested and purchase their products. Turning conventional advertisements into a personalized way and tailored for a specific group of customers is a revolutionary method that most entrepreneurs need these days.

When you have an online website for selling bags, knowing the customer’s preferences in color and design can lead to advertisements of dresses that would accentuate their previous purchases; with that, it can lead to more sales at less advertising efforts.

There are instances however where behavioral marketing can be limited. For one, if your products are for senior citizens. We all know that computer come into conception in the 80’s and most senior citizens do not know how to use the internet. This will pose some problems on finding viable viewers. Also, when the products and services offered by the company require privacy, a person may be annoyed and offended if he or she receives an e-mail 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.

Indeed, sky is the limit for the growth of modern marketing; it has no other direction than upward. The promise of behavioral targeting will be enjoyed when everybody starts to embrace it as the ultimate experience in advertisement. Information from individuals when used in a fair and healthy marketing propaganda is a wonderful idea that would catch the attention of anyone unlike the usual advertisements that are quite irritating at times. Using private information should warrant the approval of individuals to avoid offended souls because everything in the marketing world should be built in trust