Collaborative Approaches to Behavioral Targeting

We know how behavioral targeting works for marketers. There’s a clear benefit to building consumer profiles based on online browsing and buying behavior. We also tout the benefits of behavioral targeting to consumers, but do we really know what they are and what they’re worth?

As with any on- or offline benefit, there’s a requisite tradeoff to earn that benefit. In this case, the consumer trades off some arguable degree of privacy and the presence of ads for access to free content and relevant information and promotions. Does the consumer tradeoff make sense when multiplied across numerous behavioral targeting players, or would a consolidation of those players increase the value to consumers and limit their objections to this approach?

Behavioral targeting can do wonders to increase the amount of personalization online for individual consumers. An online browser who’s a regular J.Crew.com shopper likely appreciates being served ads from that company featuring clothes in her size or in accordance with past purchases. It enhances the online experience for consumers and can be quite helpful for browsers looking to buy.

We’re not truly sure how consumers feel about this “obvious” benefit, because we tend to hear from those who claim to speak for consumers as a group rather than from consumers themselves. If anyone is aware of a solid, widespread, independent consumer survey on this subject, I’d love to hear about it.

These days, behavioral targeting technology and partner adoption is on the rise. Even the power players like Google and Microsoft are snapping up firms to round out their marketing capabilities. But behavioral targeting is still practiced in a silo from company to company. ValueClick has its own data, BlueLithium has its data, Tacoda has its own, Casale has its own, and so on. With the number of consumers online and the number of available Web sites, you can be sure there’s a fair amount of overlap.

Let’s look at a hypothetical consumer. Jane is planning her wedding. She’s got six months to get everything done, so she’s doing everything she can online, such as browsing for bridal gowns, bridesmaids’ dresses, invitations, and favors. She’s all over the Internet looking for the things she needs at prices she can afford. While she browses online, how many ad networks do you think she’s hitting? I can guarantee it’s more than one. And I can also guarantee each of these networks is building a behavioral profile on Jane. Anonymously, of course. What would happen if the data gathered on Jane from each network was compiled into an über behavioral profile? How much more relevant and personalized would her online experience be then?

A collaborative approach to behavioral targeting might present a tremendous benefit to consumers in terms of personalization. And it works for advertisers and agencies as well. It would allow advertiser messages to reach nearly 100 percent of the Web in a more efficient manner, rather than a limited, piecemeal reach via several different networks. But can it really work?

It could, but not without some major upheaval in the ad network space. Unifying behavioral targeting data would remove the big-reach value proposition from all the major players and put the onus on them to win advertisers with other services. The data itself would become less important than what the networks could actually do with that data. Many of these networks place a fair amount of emphasis on analytics, optimization, reporting, strategy, and the like already, but they still place most of their eggs in the big-reach basket. It would certainly be challenging to get them to share. The technical requirements of creating one data standard alone might make this an unrealistic undertaking in any reasonable timeframe.

How would these independent, competitive entities come together? If larger networks are contributing more of the data that fuels the unified engine, should they be compensated for making other networks more viable? Would stratification follow, where some networks would focus on data capture and others on data use? How would consumers react to the big-brother aspects? How would we prevent abuse? Would government regulation come into play as the network players cooperate to monopolize consumer data?

On the other hand, this scenario might make it easier for consumers to opt out. We might be able to set universal frequency caps so the user experience is more controlled.

In a free market, there’s no way to force this approach, even should it prove the most rational step. Though the free market would also push the consolidation of behavioral target players in their own best economic interest if it was indeed so. Are the interests of the behavioral targeting suppliers and the consuming public aligned? Let’s not forget the middle layer of marketers and agencies. We need multiple suppliers to avoid monopolistic pricing.

Is it feasible to split the baby and get the benefit of cooperative data and retain the benefit of multiple suppliers? One thing is very clear: If we don’t put the consumer’s needs ahead of all else, there won’t be any data to work with and no future of behavioral targeting to debate.