Behavioral targeting has definitely taken off in the past year, with its growth marked by significant business deals, such as AOL’s $200 million purchase of Tacoda, Yahoo’s $300 million purchase of Blue Lithium, and Google’s planned $3.1 billion purchase of DoubleClick.
In the U.S. alone, spending on behaviorally targeted online advertising will climb from $575 million in 2007 to $1 billion in 2008. And it’s projected to nearly quadruple to $3.8 billion in 2011, according to eMarketer.
The industry is also abuzz with a plethora of columns on the pros and cons of behavioral targeting. A recent E-consultancy editorial questions the relevance of using broad consumer demographics for online marketing. The author suggests focusing instead on behavioral targeting for delivering the right marketing message. Without a doubt, behavioral targeting can tremendously improve the relevance of online messaging, but it doesn’t discount the merits of other marketing tools, such as demographics analysis. If anything, currently missing from the online marketing game is the use of more traditional methods of understanding consumer behaviors to complement online strategies, and vice versa.
The Need to Go Beyond
Today, the Internet plays a substantial, if not crucial, role in most people’s everyday living. As a result, there should be less separation between the different media and the creation of a consumer journey that combines knowledge of customers’ on- and offline actions. After all, any behavioral information is useful in understanding a purchase path.
It’s equally important to know which sites were clicked on and what this user typically does at 3 p.m. every day. Digital marketing has been moving past the good ol’ reliable reach and frequency model toward other metrics, such as messaging relevance, timeliness, proximity to purchase, and engagement. These are all data sets that nondigital marketers try to capture and evaluate with great detail and analytic finesse. It seems only appropriate to combine non-digitally obtained information to complement the digital mix.
For example, Prizm targeting, which is generally used for direct mail, provides nondigital marketers with a standard set of demographic traits, along with lifestyle characteristics, social preferences, and life-stage groups. Comprehensive background like this affords insights on consumer behaviors that can then be used to predict online behaviors. In this case, physical location can be translated into geolocations that help indicate products consumers are most likely to purchase, in a specific region.
Whereas online marketers can benefit from nondigital observations and action tracking, the reverse holds true for marketing that lies outside the Internet realm. The digital channel is turning into touch points for critical steps in the sales process. Thus, behavioral targeting not only captures consumers’ actions online but also helps traditional marketers understand market conditions almost in real time. Whereas focus groups may take weeks to conduct and interpret results, tactics like clickstream analysis can capture online behaviors much faster and provide insight to consumers’ specific areas of interest. The best part is online evaluation metrics will only continue to improve and provide marketers with a more precise understanding of purchase intent overall.
Time to Integrate
In this constantly evolving marketing game, integration is key. It’s all about looking at a marketing issue comprehensively and holistically and approaching it from multiple angles. After all, people don’t live in silos: there’s no separation between their on- and offline lives. Marketers must recognize this lack of differentiation and merge data across media to fully optimize messaging efforts and efficiency. Industry experts expect behavioral targeting to take center stage this year and become the big trend for 2008. Their predictions are definitely appropriate, as behavioral targeting’s benefits run far and wide: increasing site optimization, delivering a higher degree of ad relevance, improving user experiences online, and so on. Linking more traditional means of understanding consumer behavior (such as in-person surveys and demographics analysis) with behavioral targeting will create optimal consolidated consumer journeys and pave the way for the most consumer-centric strategies yet.
Elana Anderson is off this week. Today’s column ran earlier on ClickZ.
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