2 comments | 
Online marketers are using your online behaviors to target advertising.
There’s a “new” form of marketing online that’s gotten some press over the last year or two.
It’s a term that goes by many different names, but for the purposes of this discussion, we’ll call it “behavioral targeting.”
The most interesting thing about this technique is that it really isn’t so new.
Let’s talk about what behavioral targeting is, and what it isn’t. It’s not really a great new marketing theory or technique. It’s another application of database or segmentation marketing. Marketers have categorized and segmented potential customers since the beginning of the capitalism.
Behavioral targeting isn’t a technique specific only to the software or tech markets that I focus on; it is broadly applicable to any company marketing products or services online. But software and technology companies should have a special interest in this topic, since they tend to be early adopters of leading-edge technologies such as this technique.
Behavior–not demographics
In the context of web-based activity, behavioral targeting is the technique of targeting consumers based on their behavior online, rather than by simply the contents of pages they visit, or demographic attributes of the prospect.
Behavioral targeting with thousands of participating websites have developed — allowing marketers to build large databases characterizing online surfing behaviors across a wide spectrum of websites—in near real time.
Marketers using behavioral methods can then target these consumers by serving ads tailored to the pre-defined segments. This is an example of a classic marketing technique that has been made much more practical and effective by Internet technology. The Internet isn’t essential to the practice of behavioral targeting, but it greatly adds to its efficacy.
Nuts and bolts
So, how does all of this work? Generally, you’re tracked as you surf the net using adware, or tracking cookies on your computers. Adware is a dirty word to a lot of people, and it’s often lumped together with spyware. Is there a difference? As defined here, adware has no “malicious intent” like spyware does. It should be fully disclosed and consented to by consumers.
Good or a bad? Is this new behavioral targeting on the Internet a positive development? Like many things in the marketing world, that’s in the eye or the beholder−and the hands of the user.
There are extreme voices on the user side of the privacy discussion who object to anything that has the slightest privacy implication, no matter how benign. It doesn’t matter whether the risk of abuse is slight or non-existent; they toll the bell of alarm and protest vociferously. These people are usually against just about any form of marketing that is proactive.
The other side of this situation are the abusers of technology (I refuse to call them marketers), who take any innovation and attempt to use it to their advantage−consequences be damned. E-mail spammers are a recent online example of this genre of fast-buck artists. As one of the great communications innovations of our time, e-mail is perfectly suited to direct marketing, when used properly and responsibly.
With appropriate targeting and a reasonable approach to permission, e-mail marketing possesses strong benefits to both the marketer and the consumer. But the spammers continuously stuff our in-boxes with the same useless junk, making this elegant technology practically unusable for its intended purpose.
In the process spammers have turned the flabbergasted public against legitimate forms of direct email marketing, wasting a huge opportunity for efficient commerce for everyone.
The final verdict
Will online behavioral targeting end up being used only for good, or for evil purposes as well? Since this form of marketing is really in its infancy, it remains to be seen. If history is a guide, there’s a good chance it will end up being both a blessing and a curse.
What’s your view on behavioral targeting? Post a comment so we can hear everyone’s position.
Phil Morettini specializes in high tech industry issues.
Phil Morettini is president of PJM Consulting, a management consulting firm providing general management, marketing and business development services and advice to software and technology companies worldwide. Follow Phil on Twitter: @TechnologyGuy
Tags: behavioral marketing, Best Buy, high tech, Internet, phil morettini, SDNN, yahoo
Comment by: Paul McEwan Posted: November 11, 2009, 10:19 pm
I would much rather have ads aimed at me. Ads that are relevant. It’s still not perfect though. I design and market for real estate and that gets me a lot of Open House ads aimed at me due to the cookies my browser carries.
Comment by: Suzanne Vara Posted: November 16, 2009, 12:45 am
Behavioral targeting is not now. Companies have behavioral targeted based upon purchases and now it is shifting to online. Years ago, making a purchase from a company prompted direct mailers to you about specials on what you purchased - having no idea if you were purchasing a gift for someone else. That was the only way to reach you. Now the shift is to online where they are watching what you surf. Again, not really knowing if you are truly interested, clicked on by accident or if it was research for a client as Paul notes in his comment.
What are the standard and parameters that are being used in tracking such behavior online? Is it based upon frequency of the search and if so what is the frequency? Unless a major search engine comes out and says fill out an interest questionnaire or you are banned from using our site, there is no absolute true way to really behavioral target. Now, can companies get a better idea of who their target is and what they are looking for through online searches yes, but it will never be an exact.