Gales Network • Brand building from the inside out

November 2009

Behave Yourself!
Behavioral Targeting (BT)

Big Idea: Simply put, Behavioral Targeting (BT) is the practice of observing an individual’s online behavior and based on his actions, refining future content he views. With advertising dollars shifting to the Web, the ROI on BT-driven marketing expenditures is growing as we transition from buying raw impressions to buying specific, highly engaged audiences.

At Issue: On the surface, BT appears to be a win/win for consumers that get their content tailored to their tastes and for product marketers that get the most interested audiences for their message. However, the underlying technology of behavior tracking has many privacy advocates up in arms. Will new laws halt innovation in this area?

Big Ideas View: Ten years after computer programs began to shadow online travelers’ footprints, cookies, beacons and other sophisticated digital tools offer marketing and advertising intelligence far beyond CPM info. The accuracy and predictive power offered by this extracted, actionable data is mind boggling in its potential not only to sell products, but also to create products based on customers’ measured and mapped demand. Imagine a world with few returns and no excess inventory.

Most websites watch visitor activities now. Some use the most basic form of tracking such as Google Analytics, StatCounter.com, GoStats.com or OneStat.com for tracking visitor behavior such as high traffic days, optimal time to introduce new products, or to determine what content should be expanded, repeated or deleted. More sophisticated major brands are using tracking software or services such as AudienceScience, Kefta, or Omniture’s Test&Target to name a few. AlmondNet offers specific “post search” BT. Services such as sales-n-stats provide a site owner alerts when a shopper becomes hesitant so they can provide instant live customer service. Programs such as Unica view customer reaction to different promotional pitches through cross channel analysis. All track a user’s experiences. All require technology that installs itself on a user’s personal device.

Behavioral Targeting existed offline in a less sophisticated way long before cookies were served. From the store manager who observed customers from behind one-way glass to the survey taker at his front door, sellers have historically tried to learn more about their customers’ habits, needs and desires in order to maintain that customer and ultimately sell them more stuff. At worst, these data collection methods were annoying, but not invasive.

Digital BT comes with a dark side. Some companies are invading your personal space by monitoring digital chats without permission, sharing data pulled from the ‘Under 13’ crowd’s screen time and even using deep packet inspection to glean unauthorized private data that can lead to online theft or fraud.

In 2007, The Federal Trade Commission sent stern warnings to marketing trade groups regarding the need for self-regulation and in February of this year, it issued Online Behavioral Advertising Principals as a last ditch effort to keep the issue on the side of self-regulation. Brands are listening. When Google announced its “internet-based advertising,” they also introduced more consumer control over tracking. Facebook continues to offer more control to the customer. Even so, Congress threatens to crack down on this exploding field.

Trade groups (BBB, DMA, IAB, AAAA, etc) are ramping up efforts to comply with the FTC guidelines before legislation throws out the data baby with the privacy-breaching bathwater. Just how much control is mandated by the government and how much is left to us will greatly affect how every website is built and how we use the power of the web to build brands and serve our customers. Knowledge of your customer is a good thing with proper respect for personal privacy. Although more ads are not high on their list of desires, most customers prefer to be known if it means being offered a free sample of their favorite fragrance rather than unwelcome views of products that violate their values.

All brands should join this effort of self-regulation to avoid years hamstrung by laws that cut like buzz saws rather than scalpels. Wherever a customer draws the privacy curtain, or even when we know they should, let us behave ourselves and respect their space