Don’t look now, but someone – in fact, lots of “someones” – are watching you. While marketing companies have been collecting data on us long before the age of the Internet, they were limited in the amount of information they could harness from us. That’s all changed. We not only willingly share our information every time we fill out an online form, we are also being tracked throughout our web travels, all behind the scenes, without most users ever thinking about the data that’s being compiled about them.

How many users pause for a moment and think it odd that after searching for a new throw rug on Amazon, they are suddenly seeing ads everywhere for the exact rug they were thinking of purchasing? These aren’t ads on Amazon’s site. Users begin seeing these ads on many other websites that have no relation to Amazon or the rug’s manufacturer. They usually briefly think about how creepy this feels, but most will continue on without giving it much more thought, and many will never realize just how pervasive this type of behavioral targeting has become.

So what is really going on? Are we being spied upon by a vast underground network of evil marketers?

As it turns out, this type of targeting is nothing new. However, we’ve entered an age where our connectedness – not just to the Internet, but also between so many different types of devices and technologies – has enabled this activity to accelerate very quickly.

Behavioral targeting is quickly becoming a marketer’s dream. By understanding a user’s past behavior and current interests, it becomes possible to display a more relevant message to that user. That message combines user history with human psychology to more fully engage the visitor and leads to increased conversions.

Imagine a giant database that keeps track of each website you visit, every product you purchase, and all of the keywords that you use to search. Using this data, companies like Google can use behavioral targeting to serve its online advertisements. Essentially, they use your behaviors to recognize your history and interests to display ads that are extremely relevant to you. For marketers, this is ad personalization at its best.

Jeff Pullen, the CEO of the behavioral targeting platform, AudienceScience, and an advisory board member of the Behavioral Targeting Standards Consortium has worked with many big brands, including the New York Times, Financial Times, and Wall Street Journal. He understands the confusion among advertisers as they scramble to determine how they can utilize this vast amount of user behavior data that is now available from many sources. The consortium is working to educate the industry and create behavioral targeting standards. With education and standards, marketers and publishers can learn to maximize the benefits of behavioral targeting. One of the goals of the consortium is to determine what is acceptable behavioral data usage and who owns behavioral data.

Marketers must use the data they collect responsibly, being mindful of user privacy, but behavioral targeting itself is advantageous to the consumer. Hirsch explains that by providing users with content – and advertising as part of that content – that is relevant to them and their lifestyle, users enjoy a better experience.

How does this work?

Let’s take a look at a typical experience. Imagine that John visits a popular tech website through his browser and reads an article announcing the latest Android update. The content is free, and the website makes money by serving advertisements. These advertisements are delivered to the website through an ad company, which places a “cookie” on John’s browser that notes which pages of the website John viewed, and categorizes the content of those pages. The site has probably explained what data is collected by the cookies in its privacy policy, but John, like most users, will never read that policy.

Eventually, John moves on to a different website, and the ad company that served the ads on the previous site still has that same cookie installed on John’s browser, which continues to track his movements across other sites that use the same ad company. John reads an article on motorcycle maintenance and watches a video that explains how to install a GPS system on a motorcycle. The cookie stores this data as well. While watching the video, John notices that one of the ads in the sidebar of this site is a video review of the latest Android update. Because John just read that Android had been updated, he’s now curious to know what someone thinks of it, so when the motorcycle video finishes, he clicks on the sidebar ad and watches the review of the new Android update.

What About Privacy?

What about privacy?

The benefits to advertisers and users are now obvious. Advertisers get a way to target the ads that they are serving based on the specific interests of viewers. Users get the benefit of seeing ads that are highly relevant to their interests. It’s a win-win situation, but is it an invasion of privacy? As long as the cookies are not gathering user-identifiable information, such as names, locations, or other personal information, privacy is ensured. Users do have the ability to reject cookies or delete existing cookies, however, so in the end, users have the ability to control privacy as needed. The key is to educate users. Once a user understands that no personally-identifiable data is attached to their tracking activity, they are usually much more positive about being shown relevant ads. Websites and the advertising industry as a whole needs to be as transparent as possible and focused on user education.

Not just for ads

Behavioral targeting has typically been confined to advertising, however publishers are starting to understand the content personalization can be as effective as ad personalization. Just as relevant ads can be served based on a user’s historical and behavioral characteristics, personalized and optimized content can be served as well. Let’s consider our user John again.

Two weeks later, John returns to the popular tech site, where he reads an article discussing the latest 3D televisions. At the end of the article, he sees four links to more articles on the same site. Two of the links lead to similar 3D TV articles, and two links lead to recent Android reviews. In addition, an ad for the latest Android-based phone is displayed in the sidebar. His earlier interest in Android was used to personalize today’s experience.

Mary, on the other hand, is reading the same 3D article as John, but this is the first time she’s been to this site. She also sees four links to more articles at the bottom of the page, but two lead to the 3D TV articles that John sees, while the other two links lead to reviews of the latest LCD TVs. The site doesn’t yet have any other information about Mary’s interests, so the content that is recommended to her relies only on her interest in TV technology. The ad in the sidebar is completely unrelated to technology, but is related to a children’s product that Mary viewed earlier on a different website.

This site has made use of the ad company’s behavioral targeting technology, as well as its own user history technology to personalize the content – both articles and advertisements – to John and Mary.

Throw a little Psych 101 into the mix

Because this site is conscious of the ways that human psychology can affect user behavior, it goes one step further. It carefully considers the wording and placement of all calls to action. One of this site’s goals is to convert users to subscribers of their newsletter. The standard newsletter subscription form is present in the sidebar of every page, but the site presents the benefits of subscribing clearly above the form. Several A/B tests have been performed to ensure that each benefit connects with users in an emotional way, giving users confidence that subscribing will make their lives better or will solve their technology-related problems. Understanding how human emotions influence action, the site is able to significantly increase the conversion rate.

The perfect combination

By combining user history and behavioral targeting with conversion psychology, both publishers and advertisers are able to create better experiences for users while increasing conversions. With transparency and education, users enjoy more content and advertising that is relevant to their interests without the “creepy feeling” of being spied upon. There are many companies working on providing solutions to make the process easy. Contact us if you have questions. We can help you determine which solutions will work best for your company, and we’ll be happy to help you implement a custom marketing plan.