Behavioral Targeting: Definition, Uses & Issues

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  • 0:02 What Is Online…
  • 1:05 Online Behavioral…
  • 3:33 Privacy & Security Issues
  • 4:59 Lesson Summary
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Lesson Transcript
Instructor: Beth Loy

Dr. Loy has a Ph.D. in Resource Economics; master's degrees in economics, human resources, and safety; and has taught masters and doctorate level courses in statistics, research methods, economics, and management.

This lesson will define behavioral targeting in online marketing. We'll see how it's used to customize what is marketed to potential customers. The lesson will also address privacy and security concerns for consumers.

What Is Online Behavioral Targeting?

Imagine a marketer being in your kitchen watching you decorate your bowl of ice cream. What flavors do you like? What toppings do you prefer? Why do you like one brand over another? This is the information marketers dream about at night. Now that we do so much online, it's very easy for marketers to learn not only how we like our ice cream, but to predict what new flavors we might want to try. This is behavioral targeting.

Behavioral targeting is the practice of using online tracking data to identify what to market to individual consumers. Websites, landing pages, purchases, shopping carts, devices, location, and searches are used by marketers to design an online consumer profile. Consumers are placed into marketing divisions, and when they return to a website or a partnering website, ads are queued from their division.

The power of behavioral targeting is almost immeasurable. It's like being inside consumers' minds as they make decisions. It's cost-effective, immediately responsive, and has tangible uses.

Online Behavioral Targeting Uses

Now that we know what behavioral targeting is, let's look at the top ten uses of behavioral targeting. A marketer can use the data to do the following:

1. Create alliances to share analytics with other websites.

For example, if you are a company that sells lawn mowers, you might want to create an online partnership to share data with a company that sells lawn decorations. Cross-marketing these products increases the probably that consumers won't go elsewhere for everything they need.

2. Promote a specific set of products.

For example, if you sell holiday decorations, you might want to gather data from websites that sell religious books. When a consumer logs into your website, behavioral marketing data from the book website will help highlight items from the consumer's religion.

3. Customize consumer comments.

If a consumer is reading customer comments on a website, behavioral marketing data can be used to parse those statements so they are compatible by education, geography, age, work status, and gender. If you're reading comments from customers you have things in common with, you are more likely to follow suit.

4. Use word prediction in the search box to lead consumers to other products and services.

Behavioral marketing data can be used to autocomplete a consumer's search request. Giving consumers search suggestions will broaden their shopping experience and lead to more exploring.

5. Push attractive offers based on location.

So, if you are a tire company, you can use behavioral marketing data to offer snow tire specials to only those consumers who live in locations that typically have snow.

6. Share ads or coupons by age, gender, and other demographics.

For example, behavioral marketing data can be used to market coupons on diapers to parents who recently had babies.

7. Cross-link social networks of users.

By using behavioral marketing data to cross-market social networks, you can encourage users of those networks to also follow your social media channels.

8. Trigger surveys to get more data.

Behavioral marketing data surveys can be targeted to the consumers from which you want additional marketing data.

9. Encourage more click-throughs.

For example, if you previously added items to your shopping cart, but didn't purchase them, behavioral marketing data can push these items again when you return.

10. Pull in menus that highlight articles of interest.

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