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Back to Basics: What is Behavioral Targeting?

September 17, 2018

For many companies, traditional advertising can feel like an arbitrary, hit-or-miss operation. Carefully crafted messages sometimes fall short without an apparent reason. Potential customers don’t connect with the product in a way that encourages them to engage and purchase. These less desirable results often stem from marketers creating ads that fail to address the viewer’s particular interests and desires. They can also result from reaching the wrong audiences altogether.

What Is Behavioral targeting?

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In the age of data and advanced tracking technologies, random marketing should be the way of the past — especially on the web. Not only have prior methods lacked effectiveness, but they have led to the tremendous waste of valuable resources over the years. If you are an online advertiser, you can use the innovations of data management to target audiences that offer higher conversion rates.

While demographic groups and context information is useful, the data that has proven most effective for online publishers relates to consumer web behaviors. Behavioral targeting has increased the creation of relevant ads more than any other marketing strategy in recent years. After taking a closer look at how behavioral targeting works, this improvement should come as no surprise.

What Does Behavioral Targeting Mean?

Behavioral targeting is a marketing method that uses web user information to strengthen advertising campaigns. The technique involves gathering data from a variety of sources about the potential customer’s online browsing and shopping behaviors. This information helps create ads that are relevant to that specific user’s habits and interests, which the publisher can then display in that visitor’s web browser.

The primary purpose of this technique is to deliver advertising messages to the behavioral target markets that have shown the most interest in them. The process involves compiling web searches, purchase histories, frequently visited websites and other information to create a full user profile, revealing what your audience wants, avoids and purchases. Using these data points, companies can formulate ads that align with the individual consumer’s trackable preferences and needs, without conveying messages the viewer would find unappealing or irrelevant.

What Are the Benefits of Behavioral Marketing?

Behavioral targeting may be data-centered, but its benefits are much more tangible than any abstract number systems. Focusing campaigns on behavioral target markets not only benefits the advertiser, but the consumers themselves reap numerous rewards, as well.

One-Click Ads

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Here are a few of the advantages behavioral advertising offers for the advertiser:

  • Increase in User Engagement: Behavioral tracking grants publishers access to consumers who display habits of engaging with specific marketing material. With one-click ads, consumers can be redirected to online storefronts and gain intel on the company in a matter of seconds. However, without advertisements that create a sense of interest and trust, viewers are less willing to engage initially. Once the user accesses the company’s website, the brand can offer content from other areas of the site, increasing clicks and activity for targeted ads down the line.
  • Higher Number of Ad Click-Throughs: A personalized ad that captures the viewer’s likes and needs is a much more useful tool in helping consumers move down the purchasing pipeline than a generic banner ad without relevant appeal. Upon initial exposure to a highly-desired product, an interested viewer is much more likely to seek more information and continue to check out than they are with brands that fail to align with their previous browsing and purchasing behaviors.
  • Improved Conversion Rates: Advertisements that reach a behavioral target market have higher appeal to those who view them, increasing the chances that users will proceed to request more information or complete a purchase. With the techniques of behavioral targeting, companies can see an increase in sales and repeat customers, enjoying higher profits overall.

In turn, the viewer also benefits from behavioral targeting in three ways:

  • A More Exciting Ad Experience: Online users don’t always enjoy the idea of giving up personal information to advertisers. However, they often find it more frustrating when the ads they encounter are irrelevant and unengaging. That’s why a recent study found that 71 percent of consumers prefer more personalized website ads, even if they need to expose their click and purchase habits in exchange. When the ads are more personalized, viewers find their browsing experience more enjoyable overall, leading to higher user satisfaction.
  • Higher Efficiency in the Online Shopping Process: When ads for products that interest them are prominent in their web browser, consumers can click through to access online storefronts quickly, often being automatically redirected to the page about the particular product highlighted in the ad. From there, adding the item to their shopping cart and proceeding to checkout only involves a few easy steps, which online shoppers often appreciate.
  • Reminders and Alerts for New Products: By continually seeing ads for products they find attractive, viewers can keep up with new releases and stay informed about brands they enjoy. Additionally, if a user was distracted from completing an online purchase, a personalized ad about the company may remind and motivate them to go back and finalize the transaction.

More Personalized Website Ads

As consumers engage with personalized ads, they not only have a more favorable shopping experience where they get access to products and brands they enjoy, but the advertiser also reaps the rewards of better sales and website activity, increasing the company’s overall popularity and profit.

How Does Behavioral Targeting Advertising Work?

So, how does behavioral targeting work to create these personalized and profitable advertising experiences? It’s all about tracking user behaviors online and collecting pieces of data from these behaviors called “cookies.” The process often involves four steps.

1. Collect Cookies

When users visit new websites or create an account, for example, a cookie is placed on their computer, stored either temporarily on a local memory drive from which it is deleted after the browser is closed or more permanently on the device’s hard drive.

2. Create a User Profile

As cookies are collected and stored over time through new page visits, ad clicks, time spent on particular content and other data, behavioral patterns can form related to shopping and search habits.

3. Designate Consumer Groups

Using the patterns and profiles created, companies can separate users into different target market groups. Once these distinctions are made, websites that focus on behavioral targeting will be aware of the purchasing trends, interests, likes and dislikes of the members of these individual audience segments.

4. Share Relevant Information With Viewers

At this point, instead of receiving random ads, consumers will only view custom content and personalized ad material that draws from past behaviors when they reconnect to the network or website.

For this process to be successful, it requires a powerful data gathering tool and a successful means of implementing it. To do so, the best behavioral advertisers use a data management platform, like the one we offer at Lotame, that provides reliable data-collection tools and cutting-edge analytical resources.

How Successful Behavioral Targeting Uses Your Data Management 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 make sure they implement the information correctly, so they can avoid creating ineffective ad content.

Tools for content creators

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One of the most helpful tools for content creators is a data management platform (DMP), which can help harvest data about their audience, store it, analyze it and use the results for successful behavioral advertising.

What makes a DMP beneficial for companies looking to use behavioral targeting? The right DMP 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 Management Platforms Gather?

Computer browsers are one of the most prominent sources of behavior information for targeted ads. However, DMPs 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 DMPs take a look at offline information and other data a consumer’s device gathers on a regular basis.

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

  • Mobile Device Data: Cookies stored on smartphones, tablets and laptops are some of the most valuable for tracking a potential customer’s behavior. Through day-to-day behaviors, 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.

Cookies Stored on Devices

  • Geographic Location: Mobile devices aren’t the only indicators of a consumer’s geographical movements. When a computer accesses an online network, DMPs can pull the computer’s IP address — or numerical identification code — which communicates where the PC is in the world. Advertisers can use an IP address to track where a user visits their website, indicating where that user may live, work or spend much of their time, as well as revealing travel habits depending on different log-in locations and the time spent between visits.
  • Subscription or Registration Entries: Attaining full access to a website or product often requires users to create an account, purchase a subscription plan or fill out registration forms. Strategic DMPs 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 DMPs to estimate purchase needs, times and locations, so it can present appealing and necessary messages to the consumer in ideal future circumstances.
  • Demographic Information Through Diverse Networks: DMPs offer the advantage of using first-, second- and third-party data to collect wide ranges of demographic, behavioral and contextual audience information that make campaigns more layered and effective overall. The cookies and other advanced technologies DMPs use to compile this data won’t pull specific personal information like the addresses and phone numbers of consumers, but software-owning companies can learn the general ages, genders, locations and other demographic data points to create ads that communicate more personally with typical site visitors.

Wide Range of Information

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

While the data categories above define some of the types of information DMPs can collect, the specific behaviors that reveal this information aren’t necessarily evident from looking at the data types themselves. To create valuable material, DMPs 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 DMPs Track?

Companies that specialize in behavioral marketing by implementing the full potential of DMPs must pay constant attention to their audiences. As users perform specific actions online, such as completing a web search, DMPs 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 DMPs focus on include:

  • Frequently Visited Pages: Within a specified network, DMPs 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 behavior or interest trends, as the DMP 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.

DMP Success

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  • 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 DMPs only gathered URLs without accounting for the amount of time a person spent on the pages, DMP 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 Internet, the kinds of products they are looking for and the types of messages draw them in. Some users may prefer to casually surf and remain entertained, while others strategically click through pages to meet their needs. Identifying these differences in behavior helps DMP owners create more effective campaigns.
  • Personal Web Searches: Similarly, 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 DMP 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.

Web Searches

  • 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. DMPs 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, DMPs 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.

Illuminate Critical Points for Advertisers

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 browsing 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.

If you find that your company continues to waste time and ad space on 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. If you need additional information about the intricate details of behavioral targeting strategies, look no further! As an independent leader in the data management industry, we are happy to answer questions and help you decide whether our DMP or other quality solutions can benefit your company.

Behavioral Targeting Ads

Contact us to receive more information about our DMP and behavioral targeting methods. You can also check out our DMP Playbook to answer your questions about how a cutting-edge data management platform can work for you.

Ready to try it out and start presenting personalized ads to your audiences? Request a demo for your behavioral targeting today!

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