Behavioral Marketing 101: Defining the Terminology

As I read Andy Chen’s column on the tipping point at which behavioral targeting will become a mainstream online media tactic, I thought about why agencies and publishers can’t get on the same page. Perhaps there’s still a great deal of confusion about behavioral marketing’s terminology and benefits. Though it seems as if we’ve been plugging away at this, we haven’t done enough. Today, more on what behavioral marketing is and what the benefits are.

What Is Behavioral Marketing?

Behavioral marketing targets consumers based on their behavior on Web sites, rather than purely by the content of pages they visit. Behavioral marketers target consumers by serving ads to predefined segments or categories. These are built with data compiled from clickstream data and IP information.

A user visits several travel category pages on a particular site, for example. She’s then served airline ads. In most cases, the ads are served through a run-of-site (ROS) placement. The user’s behavior is the key, not the placement.

What Is Contextual Marketing?

Contextual marketing is when marketers target users with ads that are served based on a given Web page’s content. Ads bought through Google’s AdSense or Overture’s Content Match are a great example. Both place text ads on contextually relevant Web pages. Other vendors, such as Vibrant Media and Kanoodle, target users through verticals to deliver better results.

Whether text or graphic ads, delivering a relevant message based on content can be defined as contextual marketing.

What Are Behavioral Marketing’s Benefits?

Above all, behavioral marketing provides marketers with the ability to reach desired segments outside of contextually relevant areas. Desired site placements will be at an all-time premium in 2005. If a marketers wants to reach a segment, whether auto buyers, airline travelers, or users interested in opening online accounts, behavioral targeting provides a media alternative when those desired site sections are no longer available.

Have you ever bought ROS inventory or been given ROS inventory as a value add? Though it’s highly unlikely publishers will give away behaviorally targeted ROS placements, buying behaviorally targeted placements gives marketers an opportunity to be less wasteful in their media buys. It provides greater efficiency in overall online media planning. It also presents an opportunity to up-sell and provides additional frequency to target consumers if necessary.

Because behavioral targeting can track recency, it allows marketers to target consumers during a specific purchase cycle phase. Thus, messaging can focus on where that individual consumer is in the purchase funnel. If a consumer is in the process of buying a car, for example, the process can take 30 to 90 days, or longer. As the consumer conducts online research on the type of car to buy, messaging can focus on the various stages that consumer moves through in the process.

As Andy pointed out last week, behavioral marketing’s tipping point could very well occur in 2005.

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