Behavioral targeting

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In the past, commercial realtors had to count on their prospects for answers when determining where leads originated. They had to ask those prospects if, for instance, they'd picked up the phone book and called the first person they'd found, or if they'd dialed a number they'd seen in an ad. Today, however, Tout Media's realtor clients are using methods such as text messaging to help them gauge how effective their marketing is and to target prospects based on their actions.

"We have signs out there that say, 'For more information, text this word to this number,"' said Morgan J. Moran, president of Tout Media, a behavioral marketing company. "The person texts the realtor and gets a photo and an asking price. But that text message also gives the realtor some important information. They know your approximate price range, they know what area [you] were looking at; they know the time and day you were out looking at properties. They can combine different text messages and figure out what other properties you might be interested in and text you new suggestions and ads."

Tout Media has taken behavioral marketing—marketing that targets prospects based on their behavior and interactions with marketing messages on Web sites, e-mails or ads to improve ad susceptibility—to the next level. Yet the majority of marketers are just getting started, said Emily Riley, an online advertising analyst at JupiterResearch.

Behavioral marketing is definitely taking off, she said, but it's still an emerging venue, and the average marketer can't do it alone. "It's most popular when you're talking about massive amounts of not-very-valuable inventory," she said. "On larger sites, you can observe behavior, 'cookie' someone and find them again later; but if you're smaller, it's going to be very difficult for you to do. That's why you need to be a part of a [network such as] Tacoda or Revenue Science."

Defining behavioral targeting

Behavioral targeting can mean different things to different marketers. For example, the process of simple retargeting—using Web analytics to serve up a particular ad to someone who has been to your site before—is considered a type of behavioral marketing. On the larger scale, behavioral targeting looks at how people behave across many sites over time and lets marketers target them based on that behavior, using services such as DoubleClick's Boomerang and the ever-growing behavioral targeting networks such as Revenue Science and Tacoda Inc.

"The essence of behavioral marketing is hitting people, not places," said Monty Hudson, VP-media development at behavioral targeting company Revenue Science. "You want to track down someone's intent."

Being able to look into someone's daily movements is both a blessing and a curse; it often tricks marketers into missing the forest for the trees. For example, one of the biggest mistakes marketers make when embarking on a new behavioral campaign is trying to be too granular, said Curt Viebranz, CEO of behavioral marketing company Tacoda. "The immediate knee-jerk reaction is to target very finely, but then you end up with segments that are quite small," he said. It's better to look at multiple behaviors and combine them to find your perfect customer, he said.

Another mistake: assuming multiple visits to a site means someone is a good prospect, which isn't always the case, said Eric Porres, a partner and COO at advertising firm Underscore Marketing. "Behavior can take many forms. A visit to a marketer's Web site and visiting three b-to-b sites over 30 days might define one behavior—a casual observer—while visiting three sections of the marketer's Web site plus downloading a white paper and posting to a blog could indicate another behavior—an active participant," he said.

JupiterResearch's Riley agreed that marketers can get into trouble if they read too much into a behavior without linking it to other actions. "If I read an article about golf, that does not [necessarily] mean that I'm in the market for new clubs," she said. "But it might if I read the article and then go check out golf club prices."

The best approach for marketers, experts said, is to combine site-side, network, search and e-mail behaviors.

Privacy, please

Marketers must also remember to respect prospects' privacy.

Revenue Science's Hudson advises being proactive when planning your behavioral buy. "You should be asking about a company's privacy policy and practices related to it," he said. "Specifically: Do you collect personally identifiable behavior and do you co-mingle that data?" (Hudson noted that Revenue Science doesn't collect personally identifiable data.)

This is why using e-mail in the behavioral arena is such a difficult task. Sure, it might seem like a good idea to serve up an offer to someone who has clicked through to five articles about a specific topic or product—something that's only possible if the prospect has logged into your site—but is it really your wisest move? Prospects are used to being targeted based on behavior when they search the Web, but taking it one step further may be off-putting for some.

It's still worth considering, Riley said, because when done correctly, behavioral targeting pays off. "Behavioral marketing can double or triple your conversion rates," she said. "But even so, you still need a wider-reach campaign. You're not going to double or triple your overall revenues—just the small segment that you're able to target."

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