BT WEEK BEGINS!!!

This week I will be discussing some of the nuts and bolts as well as noteworthy issues related to behavioral targeting (BT.) BT is hot, both as a marketing technique and as a topic for discussion, particularly among those who debate privacy issues. So let's get the ball rolling here at OLDMTA!

WHAT IS BT (IN ENGLISH)

Behavioral targeting is based upon the truism that what we do can help predict what we plan to do and will do in the future. The idea is that there are certain kinds of online (and other) actions that can improve the likelihood that an individual will respond to digital marketing activity.

An example: most people who are going to buy a car in the near future will not do so on impulse but rather will:

• Research cars online in car sites
• Research cars in car content on portals and other sites
• Search for cars and cars information
• Click on car ads
• Talk about cars on their personal pages, blogs and email accounts
Etc.

By monitoring the behaviors of car searcher individuals, companies can better understand what will interest them, making them more likely to respond to digital auto marketing activity.

So that's BT in a nutshell. BT collects that info and uses it to target marketing efforts to more likely responders.

WHY IS BT “HOT”?

The power of such information can be enormous. If you consider that about 150 Million Americans over 18 are online, but that only about 4.2 million Americans are “in market” for a car in any three month period, it’s natural that automakers would be interested in weeding out those individuals so as to concentrate their marketing efforts on these people.

Contextual targeting (meaning, placing your ads and other marketing activity in related online content) is a start. By placing a car ad on a page about cars, you have SIGNIFICANTLY increased your odds of finding the in-market shopper. The more precise the contextual targeting, the better. For example, placing a hybrid ad on a page about hybrid cars helps out a lot. It stands to reason.

Demographic targeting can also help. If you know that affluent Northern Californians are more likely to buy a hybrid, targeting ads to those individuals can further pinpoint a company’s ability to reach likely buyers.

Psychographic targeting can also help. If you place a hybrid ad on a hybrid car review that is published on a “green” site, you’re getting even closer to perfect targeting.

Context and demography and psychographics have been tools for marketers for decades. But the two way nature of the web has added an additional tool that appears to trump all of these classic approaches.

TWO WAY IP-BASED MEDIA

Every Internet connection is made from two ends – your ISP and a digital device, like your PC. Your PC has a distinct “address” that it shares with no other machine. That address is called an IP Address. Since your IP address is yours alone, the flow of information through that address reflects your online behavior.

As part of the effort to personalize your Internet experience, companies use “cookies” to “remember” who you are and what you like. Cookies were originally developed for sites to maintain “shopping carts”. They are now used for a much broader range of personalization and tracking purposes, among other things. A cookie is a small text file that is placed upon your hard drive when you visit a site. If you have a My Yahoo page, for example, when you request info from the My Yahoo server (e.g., to load your personal My Yahoo page,) your PC pairs your request with the contents of the cookie text file to tell the server what your preferences are. The My Yahoo server can then provide the content you selected for you’re my Yahoo page.

Another kind of “cookie” is a tracking cookie, which is placed on your computer when you take a certain action online. For example, when you click on a banner, a tracking cookie is placed upon your computer to record what you did. That way, if you do something that a marketer wants, like make a purchase, the marketer will know what marketing activity drove your action. The marketer wants to know what drove your action so she knows what works in the marketing plan. The banner that drove your action gets a “point” based upon your subsequent actions.

You might think that the cookie goes away if you click but don’t buy immediately. Usually it doesn’t because most people take action long after that first click. You see a Lincoln navigator ad, click, look at a video, and then go away. But perhaps two weeks later you decide to get a quote from a dealer and head back to the Lincoln site on your own. If you request that quote, the banner you originally click on will usually be credited for that action if you perform it within a certain period of time – often 30 days.

But there’s more to the story, because the company that served the ad can also record your action, and use it to better understand who you are and what you are interested in. Suppose, for example, that you clicked on that Lincoln Navigator ad, then later went about your business online. The company that served the ad could use the info to categorize you as a luxury SUV shopper, which would be important info both for Lincoln and any other car company that sells luxury SUVs. Since clicking on that Lincoln banner makes it FAR more likely that you are in-market for a luxury SUV, your eyeballs are worth more to Lincoln and any other car company than can purchase ad impressions in front of you. So the ad server can sell those ad impressions for far more money.

Naturally, the more info that a company has on your behavior, the more it will know about what interests you. And the more it knows, the more likely it can determine that you are a prime audience for a multitude of companies in a multitude of categories. That means your eyes are worth more to a variety of companies in a variety of contexts.


TOMORROW: THE TECHNICAL MECHANICS OF BT (FOR DUMMIES)