Taking Behavioral Targeting Over the Border

As technology has evolved, business and personal communication have gone global. You can trade stocks on overseas markets, video-conference between Iceland and New Zealand, and buy a car in Germany and have it delivered to your doorstep. Doing business across borders is commonplace these days, and online technology allows it to happen instantly and seamlessly. So it follows that some of the same practices by which we conduct business here in the U.S. should translate to international practice, including behavioral targeting. But it’s more complicated than that.

Should the assumptions we make about behaviors over here be the same assumptions we make in other countries? Behavioral targeting algorithms learn and create patterns after observing a series of actions by a particular user. But would those algorithms apply to users with entirely different cultural backgrounds? Let’s not forget, either, that Internet connections stretch farther than ever, meaning even people in the most remote areas of the world can be connected online. Not two years ago, U.S. behavioral targeting experts saw little opportunity in international markets. But that’s changed, even as behavioral targeting in the U.S. market has evolved.

Companies such as Revenue Science and the former BlueLithium have been testing international waters for a few years now. The U.K. and Japanese markets have been natural starting points. That’s because both seem to have reached the maturity level needed to really implement behavioral targeting on publisher sites there. Behavioral profiling in the U.K. wouldn’t present a language barrier, of course. But how would we translate Japanese profile information to integrate with U.S. databases? Or German or Argentinean? How much overlap would exist between behavioral data among the various countries? How useful would that practice really prove?

When building a user profile, geographic location is a major identifying factor. But it remains just one of many possible variables in a profile. To build a robust behavioral profile, the data would have to be understood in the context of the technology and culture of many markets across the globe.

Privacy implications also come into play here. We haven’t managed to nail down U.S. policy related to behavioral targeting and privacy yet. But at least we have a general set of best practices for operating in this country.

Privacy sensitivities and regulations vary from country to country. Some are more stringent than others, from both a consumer and a government regulation standpoint. This makes it difficult to establish a global standard. Some consumers in the U.S. have become hyper-sensitive to privacy issues. With even less behavioral targeting experience and education occurring in international markets, it stands to reason that consumer trust in targeting, especially when conducted by foreign companies, may also be lagging. At the same time, the international consumer may now be at the same spot the U.S. consumer was a couple of years ago, when U.S consumers operated in largely blissful ignorance of the profiling that took place.

All of these challenges combine to create a significant obstacle to international implementation of behavioral targeting programs. The U.S companies that are seeing success are partnering with well-established brands in each country. For instance, U.K. media brands such as “The Guardian,” “The Financial Times,” and Virgin Media are running behavioral campaigns with several of the U.S. and newly established U.K. behavioral targeting firms.

According to eMarketer, online advertising spending in the U.K. will approach £5.0 billion (or $9.8 billion) in 2012. We know from our U.S. experience that behavioral targeting has been a significant revenue driver in the last few years, and its impact on U.K. growth can be inferred. In other countries, it may be too early to tell, although Japan and France are making similar strides toward implementation of behavioral targeting in their markets.

The takeaway? New formulas and algorithms, possibly entirely new approaches, will need to be developed to learn how behaviors relate to cultural and language factors and the state of technology in each country or region. Consumer privacy concerns will likely always be an issue, no matter the country, so it will be important to lay the foundation with trusted brands and government participation to establish standards and create trust. We will certainly have to adjust our thinking and approaches to service new and growing markets that may respond and act differently than U.S consumers. The winners will be those who throw out the old assumptions, partner with local experts, and take the time to learn their new consumers.

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