When trying to advertise using mass media, advertisers often play a numbers game. They attempt to provide a convincing message in a convincing manner to receptive consumers by trying to determine what percentage of a particular audience matches the demographic, socioeconomic, and psychological profiles for which the message was designed. Systems like PRIZM, which combines Census-based demographic and socioeconomic data with behavioral and psychological data, have been helpful in finding which geographic areas have a significant proportion of a particular type of consumer. (Try looking up your ZIP code here to see the top five segments in your area. Seriously, do it. It's actually kind of fun...)
Unfortunately, even with segmentation tools like PRIZM, you'd be quite lucky to find that a desired one of their 67 designated segments (some with slightly odd labels such as #51 "Shotguns and Pickups" and #37 "Mayberry-ville") constitutes even 5-10% of certain geographic areas. Even so, for many types of marketing, finding a geographic market that has 10% of a desired population could be incredibly profitable. But why settle for 10% when you can have even more. Much more.
Behavioral Targeting
For years, many psychologists (and marketers alike) have argued that the best predictor of future behavior is past behavior (as opposed to attitudes and opinions). Thus, if marketers could examine your behavior, they could likely tell more about you than if they were to attempt to assess your attitudes. There are a few reasons for this, but the most convincing is that while you can lie about your attitudes, your behavior often tells much more truth than you'd like.
In the past, marketers had to use survey or limited observation data to make inferences for a larger group of consumers. Then came retail store scanning devices that allowed for a greater tracking of purchases for consumers who used credit cards and retailer loyalty programs. Now with e-marketing, online and mobile technology has allowed for marketers to monitor not just what you buy, but how you buy it. Not only is there a record of your purchases, but also when you purchase (time of day, time of week, etc.), how you came upon a website (e.g., going directly to the website as opposed to clicking through from a link or ad), the time you spent on a page before clicking for more information, the other products you examined prior to deciding, etc. Much of this is done using cookies, small bits of information your browser stores on your hard drive and accesses at a later time to determine prior surfing behavior.
What's Good about Behavioral Targeting?
The major benefit of behavioral targeting is that we as consumers will be offered products and services that we're likely to desire. It's like when you log into Amazon and you're presented with a set of book titles that were purchased by other people who bought the last book that you bought. Amazon is betting that you are similar to the other people who bought the same book. And more often than not, they're probably right.
Behavioral targeting is also how Facebook offers you advertisements that are mysteriously related to your travels around the internet, your Likes, and your associations with various online organizations. There's really no mystery at all. They just take the data and match you up with ads that are more likely to interest you.
And the Bad?
The bad side of behavioral targeting? The potential for privacy invasion: the biggest concern for consumers is that behavioral targeting is something akin to marketers stalking your every move. As much as consumers like the convenience of targeted ads, as well as the avoidance of "junk mail," SPAM, and annoyingly irrelevant advertisements, these same consumers also become concerned that giving away too much information about themselves might make them vulnerable to particularly manipulative marketing efforts.
What Will the Market Decide?
Advertising industry organizations have already been hard at work trying to put together a self-regulatory system to keep consumers informed about behavioral targeting and to allow those consumers to opt out of advertising that is targeted based on behavioral tracking. As with most self-regulatory efforts, at least part of this effort is likely an attempt to preempt legislation that might be even more restrictive. In fact, the efforts came largely in response to the U.S. Federal Trade Commission's concerns regarding behavioral targeting.
But now that the self-regulatory effort has come to the implementation stage, consumer groups are demanding that the U.S. government develop formal legislation that will force marketers to have more transparency in behavioral advertising, and to have regulations that are enforceable. As it stands now, the default mechanism on browsers and websites is that behavioral targeting will occur, unless the consumer takes proactive steps to stop it from happening. It's kind of like walking into a hotel room that has an activated video monitoring system. Although it may not be hard to cover up the lens, there's not much you can do unless you know that it's there.
Behavioral targeting. On the surface, it just looks so sensible, or does it?
Be sensible.
Anthony
Other Resources:
Batten, Julie (2011), “Online Behavioral Advertising - Are You Implementing a Self-Regulatory Program?” ClickZ - Marketing News & Expert Advice (August 29), <http://www.clickz.com/clickz/column/2104581/online-behavioral-advertising-implementing-self-regulatory-program>.
Batten, Julie (2011), “Smart Ads for Smart Advertisers...Are You One of Them?” ClickZ - Marketing News & Expert Advice (July 6), <http://www.clickz.com/clickz/column/2084175/smart-ads-smart-advertisersare>.
McDonald, Greg (2011), “Consumer Group Wants New Internet Privacy Law,” Newsmax (August 30), <http://www.newsmax.com/TheWire/Internet-privacy-law/2011/08/30/id/409139>.
Miyazaki, Anthony (2010), “Would You Click This Icon to Protect Your Privacy?” E-Marketing for Sensible Folk (October 11), <http://e-marketingforsensiblefolk.blogspot.com/2010/10/would-you-click-this-icon-to-protect.html>.
PRIZM Segmentation System: http://mybestsegments.com
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Hi Anthony, I believe it does seem sensible on the surface simply because marketers are obtaining obvious information about their consumers to better target their interests. As a marketing student and future marketing professional, I don't object to this strategy. Considering how easily information is obtained on social media sites, shopping sites etc. I think the consumer has to take the initiative to educate themselves on these marketing strategies so that they know that there's more to just clicking a "like" button or entering their email addresses at site "checkouts". Being well informed allows the consumer to protect themselves from invasion of privacy and gives them the knowledge of knowing when to opt out.
ReplyDeleteI think these new systems are Gods gift to marketers and advertisers. Now, these professionals will have easier access to their target market and be able to personalize their products to them.
ReplyDeleteAs a student, I always find it funny how Amazon.com thinks that because I am ordering textbooks about math or science, that I would be interested in reading more on those subjects! Please keep the math and science far away!! Sometimes they are a bit off, but then again this is a new technology and it will only become better and better.
As I marketer, I think that it's amazing how people find so many ways to learn about and understand consumers. I like psychology, so I believe it is really interesting to be able to use behavioral targeting in order to understand certain markets to be able to serve them better.
ReplyDeleteI think that behavioral targeting is a really good way to give consumers what they want. As marketers, we need to be aware of the changes and requests that consumers are expecting.
I believe that what is important is that we, as consumers, know and understand what behavioral targeting is so that we can avoid marketers to obtain more information than the information we want to give. As long as people are informed about what's going on, behavioral marketing can work safely.
Behavioral targeting is every advertisers dream. Basically though online algorithms advertisers can track and predict the browsing patterns of their users.
ReplyDeleteAlthough it is a great novelty for the ad industry it can be an invasion of privacy for the common online user. There is always a double edged sword to everything. Nothing is perfect. There is always a trade off.
Online Advertising is one of the most important elements used by advertisers nowadays. It became a critical factor to successfully promote products and services. By using behavioral targeting over the Internet, companies have a much better chance of being effective on promoting, reducing the chances of a failure and consequently avoiding future costs. Web users are also benefited from behaviorally targeting online advertising, since people have their Internet surfing experience more personalized. At the same time most people like the fact that there online experience is more personalized, they are still a lot worried about unknown people having access to their personal information. I think that in a near future, with the advances of a self-regulatory system, people will be more acceptable about this whole idea of having their information tracked.
ReplyDeleteBehavioral Targeting is definitely sensible...is it invasive, questionable, annoying....those questions seem very relevant. Prizm is definitely an interesting way to read about your neighbors and their interests. After entering my zip code I couldn't disagree with its assessment and even through in a few others I knew for entertainment value (such as 90210).
ReplyDeleteIt seems the Internet has been plagued by "spam and junk" from its inception so I think people are starting to understand it goes along with the territory. I'm not sure if behavioral targeting is any more annoying than "pop ups"...however, if behavioral targeting combines with pop ups we may have a new web terror on our hands. --Marketing Ninja.