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Back to Basics: What is Behavioral Targeting?

November 27, 2017

What is Behavioral Targeting?

Have you ever searched for a product online to consider purchasing it and ended up with ads for that product on all the webpages you visited for days or weeks in the future? That occurrence is the direct result of behavioral targeting, and if you’re an advertiser or online publisher, it can hugely impact the success of your company’s bottom line.

Behavioral targeting is a method of advertising that compiles information about a user so ads that are specifically relevant to that person show up in their browser. Click To Tweet

Behavioral targeting is a method of advertising that compiles information about a user so ads that are specifically relevant to that person show up in their browser. When done right, the process delivers data about your audience, their interests, what they want, what they avoid, the websites they like to visit, which products they need and how close to a purchase point they are, among other facts. The ultimate goal is a full understanding of the people who visit your website so you can customize your online content and optimize ad performance for each web user.

Choosing the right data management platform, or DMP, is crucial to successful behavioral targeting. Just about everybody has data on their consumers, whether they purposely gathered that information or not. Knowing how to use the information for a specific outcome is a critical, often-overlooked part of the process, which can lead advertisers and publishers to push the wrong ads. This is one element leading to the decline in conversion rates. A quality DMP will know exactly what data to gather about each user and how to apply it to achieve a desired result.

How will you know exactly what to expect when you choose a DMP for your behavioral targeting? At Lotame, we want you to have all the information you need to make the right choice and increase your advertising profits. Read more to learn exactly how behavioral targeting works, when it’s applied and what you should expect from the strategy.

Behavioral Targeting Defined

It’s important to define behavioral targeting from the perspective of a publisher or advertiser before setting out to use the method. So what is behavioral targeting? How does it work, and why does it matter? The process relies on capturing data for each visitor and using the information to create relevant ads that align with their specific preferences, needs and interests.

To accurately track online behavior, websites use small pieces of data called “cookies.” These cookies are stored either in the temporary memory of your computer and are deleted automatically once you close your browser, or they are placed onto users’ hard drives to gather data about electronic shopping, online searches, page visits and more.

Clearly, some of the most important information gathered through behavioral targeting is web data. However, it doesn’t end there. DMPs also use a combination of non-web behavior and information to come up with optimal advertising placements. This data includes a consumer’s offline purchase history, day-to-day habits and several other categories:

  • Mobile data: Tracking consumer behavior on their mobile devices in today’s marketplace is key to digital advertising. Some consumers use their phones for their all of their purchases and other activities, and accessing that information is crucial for behavior targeting.
  • Geographic information: IP addresses are numerical codes that identify each computer on the internet and where it is located geographically. Advertisers with this data can tell where someone most often uses the web to access a site, which grants information about where a person lives, works and most often visits. By tracking IP addresses, advertisers can easily determine whether someone travels frequently and where they go, how often and for how long by checking where they are when they access each site.
  • Subscription/registration data: Subscriptions and registrations for almost any website or service usually include a portion where the visitor has to fill out demographic, geographic, contact and interest information. In many instances, portions of this information help DMPs accurately estimate what and when each user will need to purchase and what sales information will actually appeal to them down the line.

Once all the data is gathered, advertisers can draw a precise picture to fully represent a person and accurately sort them into an audience segment. Then, when the user returns to the website or another site in that network using the same browser, the site can show ads relevant to the particular user. Instead of random ads showing up, the consumer’s past behaviors are targeted for more successful and more profitable ad material.

DMPs gather information across multiple diverse sites, so they can compile demographic information about internet users using web beacons, cookies and other advanced technologies. Companies don’t typically get specific information such as phone numbers and addresses from this, but they can infer gender, age and other demographic information to determine which ads would be most useful to site visitors.

What Types of Behaviors Are Tracked for Behavioral Targeting?

To create successful behavioral targeting advertising, DMPs gather data about several types of online behavior for each individual visitor to a site. They closely monitor and record:

  • Pages visited: DMPs start by checking what pages each individual user visits on a webpage or on their network. This has a profound effect on information about exactly why the user has visited the website and what they’re looking for in particular. It helps to identify patterns of behavior and interests that will lead to future visits, purchases and other favorable actions.
  • How much time is spent on each page: Users may click on a page and stay there only a few seconds, skimming the content to decide whether it has what they need and leaving when they realize it doesn’t. If DMPs only gathered data on what pages they visited and didn’t take note of the amount of time spent on each, a large amount of misinformation and misinterpretations could lead to ineffectual advertising.
  • Clicked links: It’s important to know which links drew a user’s attention. That way, we can find out which direction they are trying to take on the internet and, specifically, on the website or network. There’s a huge difference between a consumer who casually surfs the web and someone who comes to a website with a specific need in mind.
  • Specific searches: Knowing the difference between someone who wants to jump around and explore and someone on a specific mission from the moment they come to your webpage helps with targeted marketing in the future. If a user searches a specific term, DMPs record that information so it’s available to determine the person’s ultimate goals and more thoroughly outline their behavior.
  • Element interactions: DMPs can draw several accurate conclusions about someone based on which specific elements of a webpage they interact with most often or at all. While a webpage may have countless engaging components like infographics, links, mini-games, sidebars and more, each user will likely only pay attention to a portion of the content. Their decision is often influenced by their specific goals.
  • Preparedness for a purchase: Consider someone who comes to a website that sells specific products, clicks on a particular item, places it in their electronic cart and then exits the page. We know even though they never made a purchase, they’re much closer and more ready to than someone who, for instance, only visited the page and views the item. This allows for more targeted marketing.
  • Purchases: Information on what people have had in their shopping cart and actually followed through with purchasing helps advertisers predict what products they’ll be interested in next.
  • Time gaps: The amount of time between visits for a particular user on a specific website helps marketers know whether the site is integral to their lives or if they only visit it occasionally. Information on time gaps often changes advertising strategies.

Choose Lotame for Behavioral Targeting

Before the highly-advanced technology and tracking came along that allows for specified behavior targeting, advertising tended to feel like a shout into the void for many companies. As opposed to previous methods, behavior targeting is a much more cost-effective way to reach consumers without wasting ad space, energy, time and money. Publishers can charge a premium for behavioral targeting advertising since it’s more effective and useful than random or context-based advertising.

Reaching users who have a demonstrated interest in a particular product or service is an effective way to increase conversions and gain purchases Click To Tweet

Placing related, relevant ads in front of customers who are already considering a product or ready to purchase one is the smart way to go in online advertising. Reaching users who have a demonstrated interest in a particular product or service is an effective way to increase conversions and gain purchases. If people are already in the purchasing process, they’re less likely to tune out an advertisement as internet clutter. They will likely show interest, click the ad and make an investment, which greatly raises the value of this marketing strategy.

If you feel like you need more information about the definition of behavioral targeting and its intricacies, Lotame is here to help. We’ll be happy to answer any questions you have and help you decide whether this method is best for your company. We’re a leading data management platform that can bring you reliable data through cutting-edge technology. As an independent company, we’ll offer quality focus and agility to help you reach your goals. Request a behavior targeting demo now.