You may be wondering what behavioral advertising is. Another way it’s referred to is OBA, or online behavioral advertising. Behavioral advertising is a technique used by online advertisers to present targeted ads to consumers by collecting information about their browsing behavior. It’s a way to portray the most relevant ads to the consumer, based on their web-browsing activity.
You may have noticed behavioral advertising at work in your own searches. For example, if you’re researching cars, and you’re going to a bunch of car dealer websites, or are searching “cars for sale” in the search engine (such as Google or Bing), they’re going to see that and will direct car ads to you. The same goes for a specific website.
What Data is Used for Behavioral Advertising?
Many platforms, such as social media platforms, use behavioral advertising. Before behavioral advertising, companies had to try to cater to a wide range of potential users. This made it more difficult to make your ads personalized and relevant. Behavioral advertising uses several types of data. For example:
- Time duration on a website
- How often you visit the website
- Recency of your last visit to the website
- Specific pages you browse and how often you visit those pages on a website
- Interaction you have with the website (videos watched, content read, etc.)
- Purchase history
- Products viewed
- Time gap in between visits
- IP address and geo-location
- Search history
- Mobile device data
- Communication content (social media posts, emails, etc.)
- Registered user login information
Advertisers keep in mind their users demographics, geography, etc., to make sure their online ads are relevant to their users profiles. With more recent technology, websites have improved their behavioral advertising. By using the above kinds of data, the advertiser can show you personalized advertisements that are relevant for you.
How Does Behavioral Advertising Work?
- First, data is collected and analyzed: This includes information gathered from websites (third-party cookies), mobile apps, marketing automation systems, and range of other sources. A data management platform (DMP), or the equivalent (for example, a digital signal processing or DSP), collects data, then stores, organizes, and analyzes the data. The DSP then uses the collected data to create specific user segments. SEO Design Chicago can help you understand what a DSP is and how to use it. For more information, contact a representative.
- Next, user segmentation: Behavioral patterns start to form, which creates user segments. As the user segments form, advertisers are able to focus their ads on their specific audience with ads the audience would be interested in.
- The final step is behavioral targeting application: After the audience segments have been created, ads can become more relevant to their specific groups through behavioral targeting.
What exactly is behavioral targeting? Behavioral targeting is a technique used in behavioral advertising where data is collected from user browsing habits to display relevant ads and is used to target a specific audience. There are both major pros and cons to behavioral targeting, to the consumer, as well as the advertiser.
Behavioral Targeting Pros
There are behavioral targeting pros and advantages that affect both the advertiser and the user. In addition to mutual pros for the advertiser and user, the advertiser also has behavioral targeting advantages of their own. The pros include:
- More relevant ads for the consumers: This leads to an overall better user experience.
- Higher efficiency in user online shopping: If your customer is searching for a specific product, or similar products, they have a more enjoyable time shopping if they see ads for products that interest them. When they are redirected to websites of products that interest them, it only adds a couple more steps, but it creates a more efficient experience.
- Better retargeting: Retargeting (also known as remarketing) is a form of online advertising. It keeps your company in your users’ traffic long after they leave your website. It is a cookie-based technology that follows your audience all over the Web. Behavioral retargeting ads focus on persuading users to a website they previously visited by using behavioral data. They also serve as reminders and alerts. For example, Facebook participates in retargeting frequently.
- Improved metrics for advertisers: Because of the other benefits mentioned, the ads are more appealing to users, as they’re personalized and relevant.
- Increase in user engagement: Without ads that portray trust and interest, viewers are less likely to engage with it. Once the website shows its users they can trust the site, the users are more willing to engage with the ads.
- Higher number of ad click-throughs: users will be more interested in seeking out information that aligned with their past purchases and behaviors.
Benefits for the Marketer
Not only do the advertisers and users benefit from behavioral advertising, but also the marketer themselves. There are four specific benefits of behavior targeting for the marketer, which include:
- Increase on-site engagement: Behavioral targeting is one of the best ways to re-engage with visitors that have abandoned your site for various reasons. You can re-target those visitors by showing them similar content of the closed conversation. Amazon is one example, which uses email to remind their user that they left an item in their cart. Or, they suggest products to buy that Amazon saw the user was viewing.
- Initiate long-lasting communication: You can engage with all different types of users through behavioral targeting. If there is a specific audience already in mind, you can create a newsletter for that area.
- Hook indecisive prospects: Sometimes users show interest, but they aren’t quite sure. They may have doubts about proceeding. You can hook their interest by using discounts, incentives, or personalized recommendations. You can identify an indecisive user by viewing their information, such as the website time duration, the number of pages they viewed on the website, their search patterns, etc.
- Increase average order value: You can help your on-site visitors explore similar products that catch their interest, while, at the same time, help increase the number of orders you receive.
Behavioral Targeting Cons
Behavioral targeting sometimes threatens consumers, leading them to use ad blockers and other means to prevent companies from invading their sense of choice. Tracking individuals interests based on third-party data can be unsettling. There are still a couple of cons in behavioral targeting, including:
- Negative consumer responses: The usage of ad blockers has increased, and will continue to increase, due to the fear that internet users have expressed.
- Personal information exploitation: The practice of behavioral advertising hasn’t been ruled illegal, yet many people still feel that its function is to get personal information. Some people feel it should be illegal, as they feel it’s a way to leak personal information.
- Advertisers over-complicate things: When an advertiser tries to over-complicate things in their behavioral targeting, it comes off as a negative response in users. Users don’t like feeling confused, so be cautious to avoid over-complicating things.
- Privacy Invasion with personalized advertising: Users can become uneasy when their privacy feels threatened with personal advertising. Because this type of advertising is based on the user’s web behavior, some users prefer their ads to be less personal, since they don’t like feeling like their web behavior is being tracked.
- Costs: To the advertiser, personal ads are more costly, in comparison to other types of advertising that is less targeted. Advertisers need to be sure to weigh out the cost of having personalized ads verses reaching more (or less) targeting consumers.
- Opt-Out: Customers can get irritated by the fact that some advertisers use an opt-out system. This means that your online activity will be tracked and you will see more personalized advertisements, unless you specifically opt out of receiving personalized ads.
There are also other cons to take into consideration. For example, a TNS Global survey found that 72.4% of Internet users “agree” or “strongly agree” that irrelevant Internet advertising is intrusive and annoying. Internet users value their privacy, and, as mentioned earlier, irrelevant advertising can pose as a negative response from users. In fact, it was recently announced that Google behavioral targeting will be phased out.
Get Help with Behavioral Targeting
Behavioral advertising is a powerful tool. You can use behavior advertising to identify potential users, and to keep those users. When using behavioral advertising in your ad campaigns, proceed with caution. You don’t want to hurt your company. Be wary of coming off as overly invasive, as that will hurt your metrics. Always weigh out the pros and cons to make sure behavioral advertising is right for you and your company.
There are many pros to behavioral advertising. It helps you get to know your target audience, what they are interested in and need, and how to produce the products they are looking for. SEO Design Chicago is here to help answer questions you might have on behavioral advertising and how to use it effectively. If you would like to use our digital advertising services, contact us today!