What Is Behavioral Targeting?

Traditional advertising has benefits, but for many businesses to stand out in the crowded world of digital marketing, your message must be relevant above all else. Sending targeted and carefully crafted messages based on consumer demographics and interests is no longer enough. You need consumers to connect with your product in a way that leads to purchases. Effective marketing uses behavioral targeting to analyze how an audience interacts with their business. 

With today’s robust tracking and analytics capabilities, sending a message and hoping the right person sees it is a thing of the past. Instead, businesses tailor the most effective messages based on behavioral data to create highly personalized and timely online connections. With 91% of consumers more encouraged to purchase when a brand personalizes communications, behavioral targeting in advertising is a powerful marketing tool.

• What Is Behavioral Target?
• What Are the Benefits of Behavioral Marketing?
• How Behavioral Targeting Advertising Works (in 4 Steps)
• Some Quick Target Behavior Examples
• How Successful Behavioral Targeting Uses Your Data Management Platform
• Which Categories of User Information Do Data Management Platforms Gather?
• What Types of Consumer Behaviors Do Behavioral Targeting Companies and DCPs Track?
• Frequently Asked Questions

What Is Behavioral Targeting in Advertising?

Online behavioral targeting uses customer behavior to gain insight into which advertising forms will best connect with them. The technique involves gathering behavioral data from interactions with your website or ad campaigns and using this information to create messages highly relevant to a specific user’s interests and habits. 

Behavioral ads accomplish several goals, but their primary purpose is to deliver messages to the audience segment that demonstrates the highest level of interest. Identifying this group involves compiling information about their online behavior, like purchase histories, frequent searches and websites they visit to create a complete profile. The more data points you have, the better you understand what motivates your audience — and what they avoid.

Behavioral targeting is different from contextual targeting but they can work well together. Learn more about it here.

With the data you gather from people’s online behavior, you can create audience segments based on any criteria, from how often people interact with your brand to whether they take advantage of special offers, or simply “add to cart” and then log out. Segmenting your audience based on similarities in their behavior lets you tailor your advertising and communications to each segment along their customer journey, ensuring messages correspond with the actions they take.

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What Are the Benefits of Behavioral Marketing?

Behavioral marketing benefits businesses and consumers — personalized advertising is more effective in driving purchases, and consumers avoid seeing content that’s irrelevant to them. Some of the many benefits of behavioral marketing include:

• Increased user engagement: With behavioral tracking, publishers can access consumers who regularly interact with specific marketing material. Targeting consumers based on their habits creates a sense of connection. Once a user accesses your website, you can use onsite behavioral targeting to offer content from areas relevant to their interests.
• Higher click-through rates: Consumers are likelier to click on an ad that appeals to their needs and interests. Once exposed to a highly-desired product, they’re apt to seek out more information and purchase. 
• Improved conversion rates: Online advertising that reaches a particular audience segment already speak to that audience, increasing the chances that users proceed to purchase or request more information, often leading to repeat customers and increased sales.
• Strengthened long-term relationships: With behavioral targeting advertising, you can reach customers at times convenient to them, as you’re meeting their needs by learning more about them. For example, if a customer visits your website once a month on a Friday afternoon, you could send them an email on Friday morning reminding them about your latest deals or promotions, keeping your brand at the forefront of their minds. 

Viewers also benefit from behavioral targeting in the following ways:

• An elevated ad experience: An elevated ad experience: Users find their online experience more enjoyable when encountering an engaging and relevant ad. At least 43% of people consider the personalization of ads important, and a further 31% stated ad personalization drives brand loyalty. In short, personalized ads leads to better user experiences and increased user satisfaction. 
• Streamlined shopping: When personalized ads that display products relevant to consumers are prominent, consumers can access the store and add the item to their cart faster. Reducing the number of steps customers must complete to purchase is a powerful method of increasing overall satisfaction. 
• Timely reminders: Users appreciate reminders about new releases. Keeping them informed about products they enjoy solidifies your relationship, and you can also remind them to complete purchases they may have started before becoming distracted. 

Consumers enjoy a more pleasant shopping experience when they engage with personalized ads, and advertisers benefit from increased website activity and sales, which is excellent for your bottom line and reputation.

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How Behavioral Targeting Advertising Works (in 4 Steps)

Behavioral targeting is like building a puzzle.  By compiling together behavioral data, such as a user’s web browsing behavior, a person’s actions within your app, or even their responses to other marketing initiatives such as email campaigns. Together, these data points form the basis of your targeted ad campaign. The process often involves four steps:

1. Data Collection 

The first step in behavioral targeting advertising is data collection. Advertisers gather information about users’ online behavior and interests through various means, such as website visits, clicks, search queries, social media interactions, and more. This data includes user demographics, browsing history, purchase behavior, and even location data. This information can be collected from a variety of sources including cookies, tracking pixels, universal identifiers and other technologies which help in capturing and storing this information. 

2. Behavioral Segmentation

Once data is collected, it’s used to create user profiles. Advertisers analyze this data to segment users into specific groups based on their interests and behaviors. These segments may include categories like “sports enthusiasts,” “frequent travelers,” “tech-savvy individuals,” and so on. The more granular the segmentation, the more precise the targeting can be. User profiles can be continuously updated as new data is collected.

3. Ad Targeting and Delivery:

With user profiles in place, advertisers can now target their ads more effectively. When an individual visits a website or app that supports behavioral targeting, the ad exchange platform checks the user’s profile and matches it with the most relevant ads. Advertisers bid in real-time for ad placement based on the user’s profile, and the winning ad is then displayed to the user. This all happens in the blink of an eye, thanks to programmatic advertising technology.

4. Ad Personalization and Optimization:

Advertisers don’t stop at merely displaying relevant ads; they also aim to optimize their marketing campaign for better results. Through continuous monitoring and analysis of user interactions, they can refine their targeting strategies. This may involve A/B testing different ad creatives, adjusting the frequency of ad display, or fine-tuning the targeting parameters. Advertisers seek to ensure that the right ads are shown to the right users at the right time.

While these four steps sound simple, you need access to a robust method of gathering data and an effective way of implementing the above process for it to succeed. Many behavioral advertisers use data solutions like a data collaboration platform (DCP) to leverage advanced data collection and analytics capabilities. 

Some Quick Behavioral Targeting Examples

A target behavior is any action that could give you more information about how to communicate effectively with your audience. Some examples of target behaviors include the following:

• Adding items to a cart and not checking out. 
• Searching for a specific type of product, researching the ingredients and comparing brands. 
• Engaging with a website. 
• Participating in campaigns. 
• Buying behavior, such as making a purchase at the end of the month. 

So, if a consumer visits the same web page periodically to read comparisons between different types of face cream, and then visits a manufacturer’s website, you can learn several things aside from their evident desire to buy a new face cream and target your digital advertising to reflect the user’s preferences.

Another example of behavioral advertising would be a consumer who adds a product to their cart but leaves the purchase incomplete. There could be several reasons for this incomplete step, including getting distracted. However, you know the consumers are almost sure they want the product, and you could send them information about the latest deals or reminders to complete their purchase.

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How Successful Behavioral Targeting Uses Your Data Collaboration Platform

Nearly every company has data on their customers. Some collect it proactively, while others end up gathering information unintentionally. Either way, data is only useful if you know the right way to use it to attain any desired results. For example, advertisers want to ensure they implement the information correctly to avoid creating ineffective ad content.

Data collaboration platforms are purpose-built for marketing. They collect and unify first-party customer data from multiple sources to build a cohesive view of each customer, and then allow marketers to enrich and activate this data. With this data and the right platform, organizations can drive growth and revenue, activating known and unknown first-party customer data and informing personalization for the greatest impact.

What makes a data collaboration platform (DCP) beneficial for companies looking to use behavioral targeting? The right DCP will know what kind of data a company needs from users to achieve a specific outcome, drawing from sources of both online and offline data to drive optimal advertising potential.

Which Categories of User Information Do Data Collaboration Platforms Gather?

Computer browsers are one of the most prominent sources of behavior information for targeted ads. However, DCPs tend to go a step further than focusing only on web data. Consumers are people with a variety of interests and preferences — in both professional and leisure realms of life — some of which can’t be determined by only looking at online habits. That’s why the best data collaboration platforms, or DCPs take a look at offline information and other data a consumer’s device gathers on a regular basis. They also give users the ability to share and collaborate data with another partner of their choice, to extract even more behavioral insights. 

A few other categories DCPs can access to find information on a consumer’s regular habits and histories include:

• Mobile device data: Mobile device identifiers attached to smartphones or tables offer some of the most valuable tracking methods of potential customers’ behaviors. Through day-to-day activities, users provide data about their activities, communications, search and navigation history, mobile purchases, social media clicks and check-ins, and other information that can have a critical influence on the best way to target them. Considering how often people use their devices — especially their cell phones — retrieving this relevant data could be the key to unlocking higher response rates and engaging a new audience.

• Connected TV (CTV) behaviors: Using CTV behaviors, DCPs can activate media campaigns based on data gathered on intent, interests, viewership and demographics. With the right first-party and third-party data, advertisers can target whole families, showing different ads in different households, even if they are watching the same thing. 
• Geographic location: Location-based targeting uses various data sources such as GPS, social media geolocation, and IP addresses to enable businesses to focus their marketing campaigns on particular geographical regions. This approach is particularly advantageous for businesses seeking to engage with customers in specific geographic areas.
• Subscription or registration entries: Full access to a website or product often requires users to create an account, purchase a subscription plan or fill out registration forms. Strategic DCPs can pull the information the user provides in these instances, which can include demographics, ZIP codes, contact information and fields relating to interests or activities. These pieces of data, along with others, enable DCPs to estimate purchase needs, times and locations so that they can present appealing and necessary messages to the consumer in ideal future circumstances.

Gathering these data points to create content that represents the consumer and highlights their interests can be a challenge. Fortunately, with the help of quality data enrichment solutions, the process becomes much more achievable.

While the data categories above define some information DCPs can collect, the specific behaviors that reveal this information aren’t necessarily evident from the data types themselves. To create valuable material, DCPs must monitor a range of web activities and record the relevant information for advertisers to use to their advantage.

What Types of Consumer Behaviors Do Behavioral Targeting Companies and DCPs Track?

Companies that specialize in behavioral marketing by implementing the full potential of DCPs must pay constant attention to their audiences. As users perform specific actions online, such as completing a web search, DCPs record that information to continue the conversation with the consumer through ads.

Behavioral targeting is why, for example, someone may browse through different products on an online storefront without finalizing a purchase. Then, in the following days or weeks, this consumer will begin seeing ads for that particular website all over their feeds as they navigate the web, a reminder of their expressed interest.

Which actions set these kinds of processes in motion? A few of the behaviors DCPs focus on include:

• Frequently Visited Pages: Within a specified network, DCPs begin their monitoring by checking the web pages a user accesses, whether they visited once, multiple times or on a regular basis. Looking at these pages may reveal patterns in user behavior or interest trends, as the DCP gauges why the user visited the site in the first place. For example, if the user bought something on the page, the data may predict they will make another purchase down the line, which influences the advertisements they will see moving forward.
• Webpage Viewing Times: The amount of time a consumer spends on a particular site is a crucial element of measuring their interest level. While they may initially click on a link, they might only scan the page briefly before exiting, finding the information irrelevant to them. Other times, the viewer may have a higher interest and read the entire content. If DCPs only gathered URLs without accounting for the amount of time a person spent on the pages, DCP owners would be subject to misinformation that could decrease their advertising’s effectiveness.

• Clicked Ads and Links: One of the best ways to determine what sorts of language and advertising grab a particular user’s attention is by monitoring the links they click on. Clicking habits reveal a user’s objectives when navigating the web, the kinds of products they are looking for and the types of messages that draw them in. A potential customer may prefer to casually surf and remain entertained, while others strategically click through pages to meet their needs. Identifying these differences in behavior helps DCP users create a more effective ad campaign.

• Personal Web Searches: Web searches reveal which online users are on a mission to fulfill a particular need and what kind of assistance they may be searching for. If a customer opens your website and searches for a specific item, in the future, your DCP can use that recorded data to provide related targeted ads as soon as that customer reaccesses your website. Additionally, documented search terms can be stacked with other data to create a more thorough profile of this consumer’s behaviors and web activity goals.

• Webpage Element Interactions: Web user goals vary significantly from one consumer to another. One way to help narrow down what these users are looking for is by identifying which elements of a particular website they tend to interact with. From navigational sidebars, icons and menus to engaging graphics, blog posts and video content, consumers focus on the portion of web material that speaks most accurately to their browsing objectives. DCPs draw intuitive conclusions from this data to deliver messages to those audiences in the most appealing positions and formats.

• Transaction Progress: At times, customers may fill their virtual shopping carts only to abandon their purchasing efforts at checkout. While this may seem like a negative result for retailers, it actually indicates a higher willingness and readiness to follow through with purchases in the future compared to users who only view items without putting them in their carts. Marketers can direct ads to the consumers who are in the process of completing transactions, highlighting the products they expressed interest in buying.
• Purchase Histories: On the other side of the checkout line, DCPs track the history of purchases customers make on web pages to help predict what sort of products they may be open to buying next. The follow-through of purchases is a huge indicator that the user is invested in the brand and will likely order again. Relevant, personalized ads can keep this interest at the forefront of the customer’s mind until a product or need arises that compels them to take action.

• Time Gaps Between Visits: The amount of time viewers spend away from a webpage can illuminate critical points for advertisers to use in their marketing strategies. Short absences may indicate a user with a great need for the product. If a user only accesses a website or network on an occasional basis, the company will know the content is valuable enough to the consumer for them to visit from time to time, but also that the website isn’t an integral part of their daily life.

The highly advanced technologies that enable data management and behavior-tracking changed the way companies advertise online unlike any other innovation. Now, consumers can enjoy a richer user experience full of ads that speak directly to their interests, while online retailers and service providers reap the benefits of a more efficient, sophisticated means of understanding their audiences.

Frequently Asked Questions

If your company has engaged in ineffective campaigns, it may be time for you to leap into the data-centered world of behavioral targeting — and we know just the place for you to start.

Choose Lotame to Manage the Data for Your Behavioral Targeting Ads

Increasing your conversion rates has never been easier, thanks to the innovation of behavioral targeting. When you publish content to reach users on a personalized level after they have demonstrated specific interest, you can improve the cost-effectiveness of your advertising, saving both energy and resources.

Lotame is here to help you navigate the unfamiliar territories of data-centered marketing approaches. Our end-to-end data collaboration platform,  Spherical, allows you to accelerate customer data and drive revenue with actionable customer intelligence, tapping into built-in analytics to support personalization and inform your strategic planning. 

Ready to try it out and start presenting personalized ads to your audiences? Contact us to learn more about our data collaboration and data enrichment solutions, or request a demo for your behavioral targeting today! Not ready? Read about some of our success stories.