Behavioral targeting uses information collected on an individual’s web-browsing behavior, such as the pages they have visited or the searches they have made, to select which advertisements to display to that individual. Practitioners believe this helps them deliver their online advertisements to the users who are most likely to be influenced by them. Behavioral targeting or behavioral targeting is a technique used by online publishers and advertisers to increase the effectiveness of their campaigns.

Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography, demographics or the surrounding content. Behavioral Targeting allows site owners or ad networks to display content more relevant to the interests of the individual viewing the page. On the theory that properly targeted ads will fetch more consumer interest, the seller may ask for a premium for these over random advertising or ads based on the context of a site.

Onsite Behavioral targeting

Behavioral targeting techniques may also be applied to any online property on the premise that it either improves the visitor experience or it benefits the online property, typically through increased conversion rates or increased spending levels. The early adopters of this technology/philosophy are primarily within a retail or other e-commerce website as a technique for increasing the relevance of product offers and promotions on a visitor by visitor basis. More recently, companies outside this traditional e-commerce marketplace have started to experiment with these emerging technologies.

The typical approach to this starts by using web analytics to break-down the visitor mass into a number of discrete channels. Each channel is then analysed and a virtual profile is created to deal with each channel. These profiles can be based around Personas that gives the website operators a starting point in terms of deciding what content, navigation and layout to show to each of the different personas. When it comes to the practical problem of successfully delivering the profiles correctly this is usually achieved by either using a specialist content behavioral platform or by bespoke software development. Most platforms identify visitors by assigning a unique id cookie to each and every visitor to the site thereby allowing them to be tracked throughout their web journey, the platform then makes a rules-based decision about what content to serve. Again, behavioral data can be combined with demographic and past purchase history in order to produce a greater degree of granularity in the targeting.

Self-learning onsite behavioral targeting systems will monitor visitor response to site content and learn what is most likely to generate a desired conversion event. Some good content for each behavioral trait or pattern is often established using numerous simultaneous multivariate tests. Onsite behavioral targeting requires relatively high level of traffic before statistical confidence levels can be reached regarding the probability of a particular offer generating a conversion from a user with a set behavioral profile. Some providers have been able to do so by leveraging its large user base, such as Yahoo!. Some providers use a rules based approach, allowing administrators to set the content and offers shown to those with particular traits.

Network Behavioral targeting

Advertising Networks use behavioral targeting in a different way to individual sites. Since they serve many adverts across many different sites, they are able to build up a picture of the likely demographic makeup of internet users. An example would be a user seen on football sites, business sites and male fashion sites. A reasonable guess would be to assume the user is male. Demographic analyses of individual sites provided either internally (user surveys) or externally (Comscore \ netratings) allow the networks to sell audiences rather than sites. Although advertising networks used to sell this product, this was based on picking the sites where the audiences were. Behavioral targeting allows them to be slightly more specific about this.

Source: Wikipedia.com

Richard Branson & Seth Godin video interview

This is a video of an interview by Seth Godin with Richard Branson. Both are known in the marketing world as very successful and innovative thinkers. The main topic of the interview deals with “the crisis in business marketing”.

http://www.youtube.com/watch?v=dk2AO67dn3w

This is the summary of an article by Glen L. Urban, et al. You can get the pdf of the behavioral targeting article here: Morphing Banner Advertising.

An online ad morphs whent it dynamically changes depending on a consumer segments’ preferences. These preferences are determined from the online behavior of these consumers. A dynamic program helps a website determine how the online ad should morph by exploring and exploiting; that is, the program explores by trying out various morphs and seeing which is most effective, and exploits by using ads that are based on recent anticipated results.

This paper is the first random, field testing for morphing, with a relative large sample size used to make more accurate observations regarding steady-state behavior.

Banner Advertising

Banner advertisements are paid advertisements located on a web page. Around twenty four percent of the revenue from online advertising is credited to banner advertisements, and during 2010, that’s around 6.2 billion US dollars. Therefore, a lot of businesses are interested in making banner advertisement even more effective.

Many firms try to improve banner ad effectiveness by using behavioral targeting, and increasing click through rates (CTR) in the process. However, most research show that behavioral targeting techniques today are quite static. There’s no automatic and dynamic learning involved among these strategies and they do not improve depending on how successful or bad the banners are. In other words, there is no morphing in behavioral targeting strategies.

Brief Review of Online Banner Morphing

Banner morphing exists because customized banner ads are very effective in catering to the needs of a given consumer segment. A study involving morphing banners needs to be able to accomplish two things: first, based on clickstream data from a given consumer, that consumer must be assigned to a certain segment. Second, there must be a method of assigning the best banner advertisements to each segment.

Segments are identified using a priming study, wherein consumers explore a priming website, then a model is developed to be able to assign a set of consumers to certain segments related to their clickstream data.

CNET Field Experiment

The study is done in cooperation with CNET.com, a website containing reviews and news regarding the latest high tech products. Everyday, 8 million people visit the website, and the site is worth 1.8 billion dollars in the market. Advertising revenue from CNET.com has a high reliance on banner ads, and some of them are behaviorally targeted, demanding premium prices.

In the study, eight banners regarding smart phones from AT&T are used. Visiting consumers are randomly assigned to control and test cells. The banners differ in terms of characteristics that appeal to different consumers having varying cognitive styles. The control cell had randomly assigned banners, while that of the test cells contain banners that morph based on the cognitive style of the consumer.

Results of the Banner Morphing Test

More than 450,000 banners were seen by over 116,000 consumers in this study. There were behaviorally targeted banners, particularly those that are located in pages where there are pictured, discussed, priced, compared and rated phones. Around 27 percent of the consumers saw behaviorally targeted banner advertisements.

Results show that morphing is highly effective in combination with behavioral targeting. Here, banner morphing improves substantially and significantly, and clickthrough rates almost double. The control cell, on the other hand, shows an insignificant lift for consumers and banners even when behavioral targeting was used.

In addition, there was no significant lift for banners that morphed but were not behaviorally targeted. Indeed, there is an interaction between behavioral targeting and morphing.

Implications and Future Directions

Online morphing is currently at its developing stages, and this technology is going to continue to improve website designs and banner ads and make them more effective.

Further scientific studies about banner morphing will also lead to further knowledge regarding designing and developing banners that morph according to consumers’ needs. Indeed, implementing morphing technologies to come up with the best banner for each consumer segment will lead to developments in the creativity aspect of banner ads.

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.

Cons

1. Expensive.

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.

This article summarizes Mikhael Bilenko, Matthew Richardson, and Janice Y. Tsai’s article. The original behavioral targeting pdf file can be download from this link: Targeted, Not Tracked: Client-side Solutions for Privacy-Friendly Behavioral Advertising

Behavioral tracking issues are prevalent in popular media nowadays, mainly because of the rising concern on privacy in online advertising. As such, legislators have come up with the Do Not Track (DNT) solution as a response to pressure from technology and advertising firms, legislators and regulatory bodies.

Do Not Track

There are three kinds of Do Not Track Implementations: HTTP headers, Opt-out Cookies, and Domain Blocking. They all involve giving browsers the capacity to keep third party websites from performing behaviorally targeted advertising. However, DNT doesn’t meet the full criteria required by the Federal Trade Commission on regulation, and most online ad industries now are saying that self-regulation is enough and they don’t need DNT.

Why isn’t DNT successful? Bilenko, et al, suggests that current discussion hurts Do Not Track implementations because the difference between Tracking and Targeting isn’t clear. It is important to differentiate between the two processes because of their importance in the growing financial and technical sophistication of the online advertising system. Policies that do not clearly distinguish the two become dubious.

In addition, one survey shows that more than half of respondents are comfortable with behavioral targeting, while another survey shows that two-thirds of respondents find tracking invasive of their privacy. Given that most users do not have basic understanding on how these processes work, the survey results show that they have different perceptions toward tracking and targeting.

Tracking versus Targeting

According to the Center on Democracy and Technology, “Tracking is the collection and correlation of data about the Internet activities of a particular user, computer, or device, over time and across non-commonly branded websites for any purpose other than fraud prevention or compliance with law enforcement requests.”

On the other hand, targeting is “the use of processed data for personalization in the context of a specific task, such as advertising.” A lot of parties are involved in both tracking and targeting processes, e.g. tracking can be done by the first party, which a user expects to be exchanging data with, or a third party or another operative entity. In other words, delivering targeted ads go through a complicated route, so fully differentiating the concept of targeting and tracking is important.

Mechanics of Tracking

Tracking architecture isn’t usually supplied in detail because of intellectual property rights and privacy issue sensitivities. In third party tracking, when a user views a webpage, a certain element in that page, which could be a tracking pixel or a JavaScript code, sends client-side identification data, or data that is available on the web browser that runs on the user’s computer. User identification is stored in a cookie and there are many ways to perform very precise identification.

The tracking server collects data about the properties of the page being viewed. These properties may include search terms if the page was visited from a search engine search, or the page’s category. Other forms of data include user data contained in cookies, properties from the browsing activities of a certain user, location and demographics, etc. These data can be stored client-side or server-side.

Mechanics of Targeting

Targeted online advertising becomes more effective when more user data is available to assess a user’s responsiveness to targeted ads. More information regarding browsing behavior, location, demographic, and others, will lead to advertisers being able to modify their ad prices for better ROI.

Information from tracking is utilized by ad platforms in selecting ads. Choosing which ads to display can be done through real-time bidding or RTB platforms. A website publisher requests advertisements from the RTB platforms, which is then forwarded to several ad networks. Tracking data can be collected from the website itself, the RTB platform, or the ad networks. Furthermore, user ID matching adds to the complication of the whole process.

FTC Do Not Track Framework

During 2010, FTC issued a report stating that advertising industries have been ineffective with regards to self-regulation for privacy, so they proposed a framework called “Do Not Track” which basically gives consumers the choice without hampering online behavioral advertising benefits.

The Center for Democracy and Technology states, in its analysis of DNT, that they believe users cannot block “all advertising or prevent all data collection.” The following are the five key parts for a successful Do Not Track mechanism which could be used for self-regulation: Easy to understand and use, Effective and Enforceable, Universal Choice, Opt out of data collection and use, and Persistent consumer selection.

The four major web browsers support DNT solutions in one form or another. Firefox 5.0 supports HTTP Header, Google Chrome has persistent opt out cookies as a plugin, Internet Explorer 9 has both Domain Blocking and HTTP Header, and Safari 5.1 supports HTTP Header. Analyzing these browser-based DNT solutions reveal that not one of them currently meets all of the criteria presented in the previous paragraph, with the most difficult ones to fulfill being Opt-out of Use and Collection, and Effective and Enforceable.

Targeted, but Not Tracked

The paper discusses methods which clearly distinguishes targeting and tracking, and use that for the benefit of both users and advertisers. Users get to keep their own personal data via client-side aggregation, while advertisers can still employ targeting and keep most of their gains. It further discusses three solutions related to this technique: Plug-in Based Client Side Profiling, Native Client-Side Profiling, and Revenue Impact Analysis. These three solutions all involve installation of plugins and representing profiles via topics.

http://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.

This is the summary of an article from Spring Metrics. Here’s the link to the original article: Behavioral Targeting And Social Media

Social Media helps Behavioral Targeting growth. The popularity of sites such as Facebook and Twitter, and even Youtube presents a very rich resource for user data, which are then used to create highly targeted advertisements. And because a huge number of social networking site users browse through their mobile devices, the right targeted ads can reach them at the right time.

Facebook as an Effective Targeting Tool

Facebook is a great tool for targeting because most of its users tell almost everything about their most recent updates; what interests them at present, mostly depending on what they have purchased or expressed interest on at any given day. That can be done through Facebook’s available ad targeting options.

Perhaps the most interesting quality of ad targeting through Facebook is its ability to keep track of who your friends are. The old saying goes, “tell me who your friends are and I’ll tell you who you are.” In principle, your friends influence what you are interested in and what you intend to purchase. That information is unique in social networking sites such as Facebook.

YouTube and Twitter

The same principle is true for Twitter. Through tweet updates one can assess what one’s interests are. You can send an individual advertisements that are relevant to his or her interests, and this ad can go viral once they retweet the ad to his or her friends.

For YouTube, like and dislike has become a very important tool for target advertisers. Also, the comments sections are really helpful. Together, advertisers can come up with the appropriate targeted ad which will show up in the next video they watch.

Social media growth definitely spells growth in the need for behavioral targeting and marketing. These ads address a person’s needs in real time, and so they will be more effective than paid search ads or pay per click ads.

This is the summary of an article by Miguel Helft and Tanzina Vega. Here’s the link to the original behavioral targeting article: Retargeting Ads Follow Surfers to Other Sites.

If you remotely show interest in buying a certain product that appears in a website, but decide not to for now, that product can follow you around as ads that appear in other websites. If you don’t know anything about behavioral targeting, it will probably creep you out. While more people are now more familiar with targeted ads, the thing is, these ads are becoming even more targeted and suited to meet individualized needs and highly specified products they have seen online. This technique is known as personalized remarketing or retargeting.

Personalized Retargeting

Companies that are now using or are planning to use this advertising technique include Microsoft, Google, Nordstrom, eBags.com, Diapers.com, and Discovery Channel store. According to Aaron Magness of Zappos, there is an overwhelmingly positive response to this technique. But not everyone is happy. For some online users, they feel that they are being stalked; that their civil liberties and privacies are being invaded.

Retargeting utilizes cookies. A person that visits a website and looks at a certain product, a cookie is placed in the browser of that person, which generates and advertisement for that particular product to be displayed in other websites visited. The person can click “Why am I seeing this?” a message inside the banner ads he or she is seeing, which explains how these ads are generated. Users can also opt out.

General Impression of Remarketing

Surveys show that generally, people don’t like retargeting or remarketing, despite the fact that some of these haters understand the technology perfectly. Still, remarketing is tried out by such huge companies as Google, forming AdWords.

Compared to behavioral targeting, remarketing is quite similar, but more specific. Behavioral targeting has been subject too debate. In fact, some advertising executives think that highly personalized remarketing may be too much. To them, retargeting is acceptable as long as it is done in a subtle fashion.

This is the summary of an article by Steve McClellan and Brian Morrissey. Here’s the link to the original behavioral targeting article: The Future of TV.

Cable television is becoming less popular, and instead of watching tv programs on, well, tv, viewers opt to just watch them online, in YouTube or Hulu for example. In addition, Microsoft, Google and other Internet players are planning on entering the television business. Advertisers are now given a new advertising platform in the internet.

TV to Introduce Targeted Adveritising

In response, huge television companies plan to integrate the measurability and targeting capabilities of ads that are displayed online with the branding power of television. One particular company, Canoe Ventures, is working on creating a national platform for interactive and addressable targeted advertising.

To increase inventory effectiveness for advertises, and deal with the problem of wasteful mass advertising, the future TV’s will be interactive, flexible and measurable. It will work like the world wide web.

Video is a very powerful advertising tool, and it will be more powerful if the viewers who see the ads will not dismiss them as being annoying, but will actually respond to them by making impressions. That’s the motivation of a certain Project Canoe: six of the major cable companies found in the United States felt the need to collaborate with a joint venture to provide targeted television ads to their viewers.

Too Little Too Late?

According to Tim Hanlon, from Publicis Groupe’s VivaKi, it may be a little too late for cable companies to deliver targeted ads, because online videos are getting more popular and they are practically more in line with targeted video ads.

On the other hand, Canoe Ventures CEO David Verklin, stated that there’s a lot of work to do indeed, but the timing for them is perfect; that the platform will be scalable at this point in time.

Using the DVR

To pursue this platform for targeted ads on Television, the DVR will be used. It is already in 28 percent of American homes, and will be used to target individualized ads. It also allows users to pause a program and use interactive ads. Ironically, so far, 60-70 percent of DVR users skip out the ads.

Web Meets TV

The huge internet companies find their future in television. They are driven by the money obtained from advertisement, by which the largest channels for video advertisements are found in television. For now, Microsoft and Google have only taken short steps toward Television. Google has been acquiring television viewer data, while Microsoft has bought a technology company which makes it easier for operators to sell targeted advertisements on television. Google has signed deals with NBC Universal and Dish Network, while Microsoft’s Navic software is already being used by Dish Network, Charter, Time Warner cable, and Cox communications

The Next Top Model

Jeff Zucker, CEO of Universal, once said that conservative TV has no desire to “trade analog dollars for digital pennies.” But in the future, there will lots of other advertising formats in play aside from the usual commercial breaks that we are accustomed to.

There are still several unanswered questions for the future TV, including the currency model for the sellers and buyers of these ads, and who will be the dominating players for this future television.

This is the summary of an article by Raymond R. Burke. You can get the pdf of the behavioral targeting article here: Behavioral Effects of Digital Signage

According to a 2008 research, 30 to 40 percent of consumer brand decisions are made in stores. In-store marketing is really powerful. It’s even found to be more effective that outdoor, print, radio or television advertising, but less effective than online marketing. The article focuses on digital signage, flat panel monitors found in stores that continuously replay ads, and their effectiveness as point-of-purchase communication tools.

Supporting Research

The main company participating in the research is Tesco plc, an international grocery based in Britain. For each of 100 Tesco stores, 40 plus digital signages are placed in several areas of the store, such as in beauty and health care, beer, wine, etc. An advertising campaign was tagged with several characteristics, including campaign length, category and department, mesage type, frequency, price, product characteristics, etc. Sales are compared for test and control stores during and after campaigns.

Results

Analysis from the Tesco experiment showed significantly higher product lifts for entertainment, snacks and beverage items as compared to non-food items. It seems that these ads are most effective when consumers are only interested in instant, and less effective for planned purchases. Further results showed that products that highly penetrate certain categories had higher increases in sales. Effectiveness of digital signage may be due to day and time of day of the week. Responsivenss of shoppers may be due to visibility, orientation and location of signs. In addition, shorter messages may provide higher increase of sales per screen time. The supporting research is composed of several studies, the first of which is done by Video-Mining Corporation, showing video displays of paint products.

Need State of the Shopper

The experiment results showed that engagement is highest during the weekends. During week days, consumer traffic is highest during the afternoon and lowest in the morning. Engagement during the weekdays is highest during the evening, and lowest during the morning. These differences are due to the fact that shoppers have varying reasons during shopping for day of the week and time of day. A study conducted by DS-IQ, which run digital signage for eight weeks treated primarily according to variations in ad length. There was an 8 to 9 percent increase in sales for 30 second digital ads versus when the ads were not played. However, when 15 sec ads were shown in the same loop, the increase was greater than 50 percent.

Managerial Implications

Results show that digital signage is different from advertising done on television, and more like point of purchase displays. The best kind of digital signage messages are those that are direct to the point, relevant and simple. Managers should take note that in in-store advertising, it’s best to continue to make some adjustments with the programming schedule of digital signages based on constant analysis on the effectiveness of these ads.