Should Internet Marketers Track User Behavior?

Few people in the online business community question the idea that marketing software should track user behavior.

Annalee Newitz puts this point forward in a well-researched, clearly written feature, “Don’t Call It Spyware,” about the transformation of Gator into Claria in the current issue of “Wired Magazine” (December 2005). It’s stayed with me since I read the piece a few days ago.

Should we track user behavior to improve targeting and ad message relevance?

The Online Business Community

This question faces all online behavioral marketing stakeholders: advertisers, their agencies, online publishers, and the specialist technology/service providers in the space.

Brand advertisers and direct marketers across categories have been buying into behavioral targeting for some time now. Case studies have demonstrated behavioral targeting to be effective in many different ways, including increased audience composition (better targeting) and improved response metrics (better performance). And in many examples, it offers more efficient costs for the advertiser as well.

Publishers have widely adopted behavioral targeting as a way to maximize yield on inventory, at the site level or as part of a network, either with their own technology or through one of the specialist technologies available on the market.

A great example is the automotive category. Sites are short of contextually relevant inventory and can use the technology to deliver ads to people who have frequently and recently been looking at car reviews, sales listings, and so forth.

Entirely new businesses have been built on behavioral targeting, way beyond larger players such as Revenue Science and TACODA. Some have revenues growing at double-digit percentages, counted in tens and even hundreds of millions of dollars.

Some Questions That Have Been Asked

An eMarketer survey called “Pros and Cons of Behaviorally Targeted Advertising” taken in late 2004 may support Newitz’s point. Media planners who took part in the survey identified the top problems with behavioral targeting:

  • Achievement of reach

  • Inconsistencies with segment definition across sites
  • Ultimate issue of behavioral targeting clutter

No one mentioned the problem of consumer privacy or whether user behavior should be tracked at all. This may be because the respondents assumed all Internet users are aware of the privacy policies of the sites they visit and have no problem with their usage being monitored. Or because so many forms of completely legitimate behavioral targeting don’t involve true spyware. Or any number of other reasons.

Another eMarketer study released around the same time shows behavioral targeting to be a primary focus of U.S. media planners in the next 6 to 12 months. It’s a higher priority than video-format advertising, for example.

So, It’s All Right?

Behaviorally targeted advertising leverages one of the online medium’s core strengths: individualization. It enables messages and offers to be matched to a user’s interests without a need for personally identifiable information.

Its use can benefit everyone: more relevant, valid advertising for consumers; monetization of generic unsold inventory for publishers; and better advertising performance for marketers.

Not questioning behavioral targeting’s ethics doesn’t mean it’s OK, of course.

It’s important online media people who employ behavioral targeting continue to take a larger view and inform themselves about consumer privacy. They should read educational information published by the Internet Advertising Bureau (IAB). They must ensure publishers they work with have TRUSTe- and BBBOnLine-compliant privacy guidelines. They must understand exactly how data behind their behaviourally targeted placements are collected and used.

In concluding her article, Newitz quotes Esther Dyson, publisher of the “Release 1.0” newsletter and long-time spyware adversary, as saying, “As long as there’s disclosure and people are given choice, I think monitoring users’ behavior isn’t a problem.”

If Dyson says it’s OK, that’s good enough for me.

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