Description
It explains how Behavioral targeting work. It explains advantages and disadvantages of behavioral targeting
BUSINESS INTELLIGENCE
Individual Project: Behavioral Targeting
Table of Contents
Introduction ............................................................................................................................................ 2 History of Behavioral Targeting .............................................................................................................. 2 Types of Behavioral Targeting................................................................................................................. 3 Onsite versus Network Behavioral Targeting ......................................................................................... 3 Key players in Behavioral Targeting ........................................................................................................ 4 How does Behavioral Targeting works ................................................................................................... 5 Pricing of Advertisements ....................................................................................................................... 7 Advantages of using Behavioral Targeting.............................................................................................. 8 Disadvantages of using Behavioral Targeting ......................................................................................... 8 Examples of companies using/used Behavioral Targeting ..................................................................... 8 Privacy/legal issues ................................................................................................................................. 9 Initiatives taken to settle privacy issues ............................................................................................... 11 Future work........................................................................................................................................... 12 Conclusion ............................................................................................................................................. 13 References ............................................................................................................................................ 14
1
INTRODUCTION
Behavioral targeting is a technique used by online publishers and advertisers to increase the effectiveness of their campaigns. With the rapid growth of World Wide Web, online advertising channels using behavioural targeting shows great potential. The basic approach used in behavioural targeting is to collect information on web users through the sites which they visit, their browsing habits, the type of content which they try to read, their search patterns etc. It is simply amazing to imagine how advertisers are able to predict what exactly we want to buy or in what all things are we really interested. This is the power of behavioural targeting where by use of software tools and analytics, consumer behaviour is studied and thus results in consumer‘s demonstrated interest, more promising sales leads thereby enabling advertisers to serve relevant ads which a consumer might be really interested in.
HISTORY OF BEHAVIORAL TARGETING
1999: With the dot com bubble and failure to address privacy and ownership issues, behavioural targeting could not emerge a prominent technology in e-commerce space. It was ?Doubleclick‘ who used its advertising expertise to build a database of individual user profiles and then targeted ads within the network of sites that Doubleclick operated.1999 market was had the following characteristics: a) b) c) d) e) Online market was at its boom. Buying targeted inventory at premium was not attractive. Technology lacked sophistication. Internet penetration was quite low. Lesser security of payment gateway.
Result: Behavioral targeting was not developed completely and needed testing before implementation. 2003: Technology improved with better internet penetration and computer literacy. Also many secured transaction gateways helped behavioural targeting make its comeback. The early groundbreakers were the contextual targeting vendors Claria (formerly Gator) and WhenU1. Both are desktop applications where users accept advertising in exchange for software services (e.g., online wallet, remembering passwords). The advertising is delivered to reflect user behavior (i.e., the sites visited/actions undertaken), but is controlled by the desktop application, not the site being used. 2009: Google revolutionized e-commerce and advertisement publishing by adopting behavioural targeting at a very large scale which was then followed by other search engines, social networking sites and other e-commerce sites.
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TYPES OF BEHAVIORAL TARGETING
Some of the methods that are being used by e-commerce giants while using behavioural targeting are:
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E-mail personalization: Ecommerce players could analyze your movement around their website and trigger an instant email to you with a relevant marketing message. Also it can be seen that when we use Gmail and other personalize mail services, usually we get advertisements which more or less relate to the content of the kind of mails that we are getting. These ads are usually displayed by picking up the keywords that spider (a kind of robotic algorithm) can interpret. Website personalization: An ecommerce business usually has a large array of offerings. So which ones does it highlight? Which ones does it feature on its homepage? By analyzing the visitor's browser click streams, the ecommerce website can be personalized to highlight products that the visitor is more likely to be interested in. Website personalization is one of the methods of increasing shopping cart conversion. If we visit Nike online studio, we have number of options to let the homepage be customized. It helps in looking at the offers in which one is really interested in and what kind of trends one wants to follow. Deal Customization: It is not just about which product to highlight, it is also about the type of deal that would work best for you. For instance, if an ecommerce merchant sees that you have visited his special Keralite massage page multiple times, he could offer you a small discount to nudge you towards making the purchase.
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ONSITE VERSUS NETWORK BEHAVIORAL TARGETING
Onsite behavioral targeting is when a company collects data for a specific user only on their site. The company then takes the data they collect and uses it to post more relevant offers to that user while they‘re on the site. For example, an e-commerce company knows the past purchase history of a customer, and offers complementary products when they return to their site. Network behavioral targeting is when a company collects a user‘s data across an unlimited number of Internet sites. This means that they track you no matter what site you‘re on and then serve you ads and offers all over the Internet based on your past online activity. For example, you visit several different e-commerce sites in search of horse attire. Then when you go on to a site like Yahoo, you‘d see ads related to horses; or, on a site like Ebay you‘d only see content that relates to horse gear when you first hit the homepage2.
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KEY PLAYERS IN BEHAVIORAL TARGETING
Different players in behavioural targeting are identified as follows: a) Publisher sites: These partners with behavioural targeting specialists to track users on individual basis or site-by-site basis. They have proprietary ad management and analytical tools to track behaviour of website traffic. Examples are Revenuescience and Tacoda. b) Advertising networks: These together with behavioural targeting specialists and their own proprietary tools target networks to reach wider audience and more tightly define target criteria. c) Desktop Applications: As mentioned earlier, the desktop applications were the first to cut through in the second wave of behavioral targeting. They also have the unique ability to track all online behavior and deliver advertising at any time when a user is online. There is no issue of legal infringement because user has himself agreed on to install such a tool on its system and let e-commerce sites present relevant advertisements online. Claria and WhenU are leading examples of desktop application software d) Third party ad server Option:
These work in an altogether different manner. They help display ads based on frequency of visit and kind of activity the user indulges in. Different segments are created based on customer site registration, usage, transaction data, click stream behaviour etc. Also segments are sometimes created based on minimum number of visits made. For example a person is stated to be interested in auto sector if make visit to automobile websites for suppose 45 days in three months time. It shows that the user is very interested in automobiles. Depending on the characteristics it can be determined whether the user is planning to buy a firsthand/second hand automobile or is looking to hire one or wants to start some business. However, as a default ad must be served for users who do not fall into the appropriate segment, the numbers can often be quite small, and this is a key consideration before set-up. The default message must be carefully considered, and often more generic or ?brand? messages are used as a default to exploit this other possibly wasted inventory to the full. The segments can directly reflect consumer/advertising relationships. All sites that are ad served can be used to target behaviorally, and the media cost will not be inflated through the process of targeting.
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HOW DOES BEHAVIORAL TARGETING WORK
Source: www.mediacontacts.com
Most advertisers rely on ad networks to do their behavioral targeting for them. Ad networks are essentially middlemen technology companies that partner with hundreds (sometimes thousands) of websites for access to information about visitor traffic. These Adnetworks are also known as Behavioral Technology Provider. Websites drop ?cookies,? or small pieces of data, onto consumers‘ hard drives to keep track of user preferences, the contents of their electronic shopping carts, their searches, and details on where and when users click on a site. Websites also collect visitors‘ IP addresses — the numerical code that identifies each computer connected to the Web and its geographic location. When the user again visits a publisher‘s site, publisher Ad server contacts BTP segment database and using the information that has been collected, advertisements are matched according to the behavioural aspects of the visitor and relevant ad is selected to serve the user3.
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The parameters which are looked at while gauging the behaviour of the visitor are not just based on the WebPages which they visit. Typically, following types of visitor specific data can be tracked by the server (note that the list is not exhaustive): ? ? ? ? ? ? ? ? City and Country from where the visitor is accessing the website (useful for geotargeting) Local time of the visitor (useful for determining if the visitor is a night or morning person) Browser used, Operating System, Screen Resolution, Internet Speed (is visitor accessing the site from his mobile? Is visitor technologically more savvy and using Linux? It is amazing how much information do visitor system statistics reveal.) Type of page viewed by the visitor (made possible by tagging the page) Time spent on page, when did he accessed this page last time and number of times accessed the page (tells us about interest, recency and frequency of the visitor) Made any purchases? Value of those purchases? (gives us an indication of how monetarily valuable a visitor is) Where did this visitor comes from? If search engines, which keywords did he use? (useful for targeting content based on the inferred intent through the use of keywords –for example, for the term ?buy? and for the term ?free?, you would want to tailor the content differently)
Based on the matching of behavioural patterns, relevant ads which are served are again based on two parameters4, a) Retargeting: Serving ads to consumers after they visit a website, based on the premise that their visit must imply interest in the advertising company‘s products or services. Retargeting does not consider the frequency of a user‘s visits, however, to determine interest level. b) Contextual targeting: In contrast to behavioural targeting, which serves ads relevant to users‘ interests and actions, contextual targeting serves ads relevant to the content on a Web page.
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PRICING OF ADVERTISEMENTS
As far as advantages to companies are concerned, they are huge by use of behavioural targeting but at the same time there is a pricing associated with publishing of advertisement banners. There are several ways of pricing online advertisements5, ? ? CPM or cost per-mille impressions: publisher is charged for every view of the ad and each view is considered to be an impression. Example: a $3 CPM means that for every thousand people that see an ad, the advertiser pay $3. CPC or cost per click: Advertiser pays only when a person clicks on ad. Example: CPC is the rate of a single click.
Depending on the requirement/objective of the advertiser, CPM/CPC can be chosen. When advertiser who wants to increase awareness of its brand prefer to use CPM. On the other hand, advertisers who want to get their products sold use CPC.
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ADVANTAGES OF USING BEHAVIORAL TARGETING
? ? ? ? ? ? ? Reach a highly qualified and differentiated audience with specific messages. Connect targeted segments with the right message at the right time in the buying cycle Discover new customer segments with which your messages best resonate. Increase conversion rates by focusing messages on the right audience at the right time. More cost-effective campaign. Marketers pay to reach only potential customers who have shown demonstrated interest, and serve ads only on Web pages that these customers visit and have affordable ad space. One of the great advantages of behavioral targeting is that it enables marketers to consider multiple consumer behaviors when developing their advertising campaigns. As far as core concepts of Marketing goes, behavioural targeting helps user move through four phases namely, brand awareness, message association, brand favourability and purchase intent.
DISADVANTAGES OF USING BEHAVIORAL TARGETING
? ? ? The drawback here is that ad networks can only track consumers when they click within websites that have partnered with the networks themselves. Customer privacy is a very big issue. The recent issue of Facebook agreeing to sell user information to marketers is in line with this issue. The most important drawback of behavioural targeting is that data is not personally identifiable. It is restrictive in terms that who uses computer is not known to the algorithm and thus in a family of four, some efficiency is lost. Tracking technology still has trouble distinguishing multiple people using the same computer. Consumer preferences change very fast and if there is slight delay in targeting, then that customer can be lost. Scale: There are thousands of people visiting website daily, thereby creating loads of data to be analyzed. Understanding and analyzing to draw conclusion and chalk out strategies is not an easy job. It requires right tools and right understanding of the subject.
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EXAMPLES OF COMPANIES USING/USED BEHAVIORAL TARGETING
? Yahoo Behavioral targeting enables advertisers to target consumers with expressed interest in a category or specific product. Yahoo! BT goes beyond the more common rules based segmentation or clustering of users by sites visited. Their solution is powered by sophisticated modelling technology based on extensive online interactions that include searches, page-views and ad interactions. With these models, Yahoo! identifies what consumers are interested in and predicts where they sit in the Awareness-Consideration-Purchase funnel. In early 2007, in association with ad network Tacoda, Pepsi tried to serve behaviourally targeted ads during the launch of its mineral water ?Aquafina‘. The campaign targeted ?health-conscious? consumers, and then served them ads wherever they travelled within Tacoda‘s network of 4,000 sites. This campaign itself helped Pepsi attract three times the normal customers6.
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Google has been the largest beneficiary of using behavioural targeting by serving ads based on interest. Its revenue through ad banners increased many fold after launching use of this technology. For example, an expectant mother may see an ad about baby products not only on a parenting site but also, for example, on a sports or fashion site that uses AdSense or on YouTube, which is owned by Google. Amazon has very successfully used behavioural targeting. When someone returns to Amazon‘s website, it recommends a list of books one might want to purchase. Amazon infers interests of the visitor from his/her past purchases and any title she/she have previously looked at on Amazon. Nike and Coca-Cola divide their website entrances by country. Thus, they are able to divert customers into the area of their website that is designed to meet their needs in particular as product availability differs internationally. Facebook's Sponsored Stories, which debuted in january, is a new form of behavioral targeting. Not the type that drops a cookie in a Web browser and then an ad network matches the information in the cookie with an advertisement -- but rather, targeting based on social signals that identify behavior. So, if Sony buys a Sponsored Story ad and a user checks in or "like" (s) the brand, the status update will run in the user's news feed, and again as a paid display ad for the brand. eBay is sharing information about visitors' past activities with its partners in order to serve up targeted advertisements - both on eBay and off. Some banks are using behaviourally targeted ads. When a user login to online banking, he will find in his statement, there are targeted behavioral ads based upon his purchases. It's the new reward program some banks are offering; if user click on the link, it automatically activates, and then the advertiser will automatically recognize user‘s debit or credit card next time he visit that merchant and use the same card. Airline carriers in their websites and portals like makemytrip.com or cleartrip.com have very successfully used behavioural targeting to provide offers to the customer by looking at the past purchases and getting deals which are unmatchable and simply affordable. NebuAd: This ad company developed proprietary hardware to allow ISPs to collect surfing data on every person who connects through their services — wherever they go on the Web. NebuAd then creates detailed consumer profiles for ad networks to purchase. The company does not disclose which ISPs use its technology.
PRIVACY/LEGAL ISSUES
An immediate concern associated with behavioral targeting is whether privacy regulations are compromised in the process. Behavioral targeting technology does not identify the individual through any personal data; it purely tracks where the individual has been online. Therefore, all information is anonymous and privacy regulations are not compromised. The main issue with this technology is use of personal data without the consent of the concerned. Aside from the issue of consent, there are also obvious online content areas that must be avoided when advertising. Such content includes children-related, personal health, sexual behavior, detailed financial, government related, and social security number and secure site areas. In a recent survey of online consumers conducted by BURST! Media, 20 percent of respondents were prepared to have their information tracked if it meant more relevant advertising but 56 percent would not approve data collection of any type.
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One major concern is the confusion consumers seem to have when it comes to adware programs and spyware. Adware companies‘ offer consumers free downloads of software programs in exchange for receiving highly targeted ads. In contrast, spyware does this without the consumer‘s knowledge or consent. Another industry concern is cookie deletions. If asked, most consumers will be unable to define what a cookie is -- a small file stored on a computer containing information for a specific website -- but that won‘t stop them from believing that cookies are a nuisance. One of the side effects of consumer‘s taking action and cleaning their computers of unwanted adware is the elimination of cookies. With one click after scanning with software products like Spybot or Ad-Aware, the option exists to eliminate these seemingly innocuous tracking devices from their computers. Sometimes software solutions highlight third party cookies as ?potential threats? to prove their software is extra aggressive. Nearly 40 percent of internet users delete cookies from their primary computers on at least a monthly basis, according to a study by Jupiter Research, an international research advisory organization specializing in business and technology market research. Based on a survey of 2,337 U.S. respondents, the study found that 17 percent of internet users delete cookies on a weekly basis, 12 percent on a monthly basis and 10 percent daily. The study has implications for advertising and marketing firms that depend on cookies for tracking and targeting, especially ad delivery networks that are relying on third party cookies (cookies placed by an internet site other than the one people are visiting). Other studies put the percentages anywhere from 38 to 55 percent. Google‘s privacy concerns, In 2008, Google claimed that their technique was different from behavioral targeting since they only capture what the user recently searched as opposed to others who look at what the user did day‘s ago7. Google also mentioned about ?technological safeguards? for the chat messages and emails in the Gmail accounts, yet they failed to disprove that it is an e-mail service that analyzes the content of the user‘s messages to tailor advertising and act as surveillance systems, performing without the knowledge of the users. Their intention of grabbing personal information was clear when they purchased DoubleClick, another means of tracking individuals online. When the Viacom ordered Google to reveal the usage logs of Youtube.com, Google objected, arguing that the combination of IP addresses and usernames could identify individuals who used YouTube, although an engineer of Google concluded that in most cases, IP addresses alone cannot identify an individual.
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INITIATIVES TAKEN TO SETTLE PRIVACY ISSUES8
Apart from legal actions that have been taken to ensure that confidential and personal information of internet users is not misused, several websites have taken initiatives to look into this matter. These instances have been listed below, ? Ask.com announced a new tool that allows users to request that Ask not retain any of their search queries -- the only tool of its kind among the major search engines. For search query logs that Ask does retain, specific user information (IP addresses and cookie identifiers) will be deleted after it has been stored for 18 months. Google has decided to limit the lifetime of its cookies to two years, causing them to expire on the computers of users who do not visit the search engine for two years. Google will also partially obscure IP addresses and cookie identifiers in its search logs after they have been stored for 18 months. Microsoft has announced that it will remove all IP addresses and cookie identifiers from its search logs after 18 months, and will store search logs separately from account information (name, email address, or phone number). Yahoo will soon announce a new policy to delete portions of IP addresses and cookie identifiers in its search logs after 13 months. After 13 months Yahoo will also apply a personal information filter to remove names, social security numbers, addresses, telephone numbers, and other personal information from its search logs. Yahoo plans to limit the lifetime of its cookies to two years. In July 2000, the FTC recommended that legislation should be passed to protect Internet user‘s privacy with regards to OBA (or online profiling as it was then known) for the first time The FTC further stated that ?backstop legislation addressing online profiling is still required to fully ensure that consumers‘ privacy is protected online? and recommended that [technology neutral] legislation be passed that created a basic level of privacy protection for users of ?consumer-oriented commercial websites with respect to profiling.?[13] Under the FTC‘s 2000 proposal all online advertising networks and consumer oriented commercial websites that allowed the collection of information from or about consumers would be required to implement and comply with the FIPs.
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As per report, ?Search Privacy practices: A work in progress‘ by Center for Democracy and Technology (CDT) in 2007, following orders has been issued,
FUTURE WORK
The most important work that needs to be done in the space of behavioural targeting is to recognize in some manner who actually is the person using the computer. As has been given in the disadvantages, in a family of four, behavioural targeting is not able to distinguish between the users unless the login accounts are different for family members. If this issue is solved, then behavioural targeting will be able to overcome several of the issues. There are various trends which can be identified and can be called future of behavioural targeting, ? ? Currently, mobile advertisers use traditional methods of ad targeting: device, demographic group or context. But in five years, mobile ad targeting will become more relevant to a person‘s behavior and current location. Behavioral targeting will be used in journalism. Using Digital Identities and Journalistic Content, a behavioral targeting AI engine will be created. First, it will analyze all journalistic content by a user, and each content will be tagged or annotated automatically. Second, these tagged content and the digital identity of the consumer will be sent to the Assessment Rule Engine, which will then send relevant ads to that consumer.
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The areas everyone is most excited about are more robust targeting, improved reach via appropriate segment standardization, and the fact that reach will grow as the marketplace develops. ? TACODA ?Audience Match? plans to launch an audience-centric ad network modelled after contextual ads that will be sold in web-based auction. It will combine demographic data and behavioral targeting to reach the defined segments of a significant size. DART plans to launch a behavioral targeting option for its publisher sites/DFP.
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CONCLUSION
Behavioral targeting is one of the most important marketing tools in the e-commerce industry. Its prudent use keeping it within the boundary of laws and giving it ethical treatment will help reap gain tremendous market shares. It won‘t be just market share but will also be mind share. After studying the working, advantages, disadvantages and future scope of behavioural targeting, the advertiser needs to acknowledge that customer does not think the way a consumer thinks. In the race of technology, human variable should not be ignored. In general, implementing a behaviorally targeted element is compelling when faced with a hard to reach target, when trying to deliver aggressive direct response objectives, or when using specific creative messaging strategies for different audiences. The key is to implement behavioral targeting with a clear strategic perspective on how consumers will respond; there is also no harm in adopting a test and- refine approach to learn what works without risking major negative exposure if a tactic proves inappropriate. So the key is to improvise upon any model and not to abandon the effort without proper evaluation.
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REFERENCES
1. iNSIGHT MV. (2004, October). Retrieved November 12, 2011, from www.mediacontacts.com/wp-content/uploads/behavioral.pdf 2. patil, L. (2008, July 21). Is Behavioral targeting really internet stalking? Retrieved November 16, 2011, fromhttp://lunchpail.knotice.com/2008/07/18/is-behavioral-targeting-reallyinternet-stalking/ 3. Khurana, A. (n.d.). Ecommerce basics. Retrieved November 20, 2011, from About.com:http://ecommerce.about.com/od/eCommerce-Marketing-Strategies/a/BehavioralTargeting.htm 4. Beales, H. (2010). The Value of Behavioral Taregeting. Network Advertising Initiative. 5. yan, J. (2009). How much can Behavioral targeting help online Advertising. Madrid: World wide web conference.
6. Whats New. (2009). Retrieved November 22, 2011, from Yahoo! solutions:http://in.advertising.yahoo.com/solutions-behavioral-targetting.php 7. Behavioral Advertising. (2010, June 1). Retrieved November 23, 2011, from Behavioral taregeting Blog:http://behavioraltargeting.biz/a-different-look-at-google-privacy/ Privacy Initiatives Key to Addressing Behavioral Targeting Concerns. (2007, August 8). Retrieved November 24, 2011, fromhttp://www.cdt.org/policy/privacy-initiatives-keyaddressing-behavioral-targeting-concerns
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doc_998328765.docx
It explains how Behavioral targeting work. It explains advantages and disadvantages of behavioral targeting
BUSINESS INTELLIGENCE
Individual Project: Behavioral Targeting
Table of Contents
Introduction ............................................................................................................................................ 2 History of Behavioral Targeting .............................................................................................................. 2 Types of Behavioral Targeting................................................................................................................. 3 Onsite versus Network Behavioral Targeting ......................................................................................... 3 Key players in Behavioral Targeting ........................................................................................................ 4 How does Behavioral Targeting works ................................................................................................... 5 Pricing of Advertisements ....................................................................................................................... 7 Advantages of using Behavioral Targeting.............................................................................................. 8 Disadvantages of using Behavioral Targeting ......................................................................................... 8 Examples of companies using/used Behavioral Targeting ..................................................................... 8 Privacy/legal issues ................................................................................................................................. 9 Initiatives taken to settle privacy issues ............................................................................................... 11 Future work........................................................................................................................................... 12 Conclusion ............................................................................................................................................. 13 References ............................................................................................................................................ 14
1
INTRODUCTION
Behavioral targeting is a technique used by online publishers and advertisers to increase the effectiveness of their campaigns. With the rapid growth of World Wide Web, online advertising channels using behavioural targeting shows great potential. The basic approach used in behavioural targeting is to collect information on web users through the sites which they visit, their browsing habits, the type of content which they try to read, their search patterns etc. It is simply amazing to imagine how advertisers are able to predict what exactly we want to buy or in what all things are we really interested. This is the power of behavioural targeting where by use of software tools and analytics, consumer behaviour is studied and thus results in consumer‘s demonstrated interest, more promising sales leads thereby enabling advertisers to serve relevant ads which a consumer might be really interested in.
HISTORY OF BEHAVIORAL TARGETING
1999: With the dot com bubble and failure to address privacy and ownership issues, behavioural targeting could not emerge a prominent technology in e-commerce space. It was ?Doubleclick‘ who used its advertising expertise to build a database of individual user profiles and then targeted ads within the network of sites that Doubleclick operated.1999 market was had the following characteristics: a) b) c) d) e) Online market was at its boom. Buying targeted inventory at premium was not attractive. Technology lacked sophistication. Internet penetration was quite low. Lesser security of payment gateway.
Result: Behavioral targeting was not developed completely and needed testing before implementation. 2003: Technology improved with better internet penetration and computer literacy. Also many secured transaction gateways helped behavioural targeting make its comeback. The early groundbreakers were the contextual targeting vendors Claria (formerly Gator) and WhenU1. Both are desktop applications where users accept advertising in exchange for software services (e.g., online wallet, remembering passwords). The advertising is delivered to reflect user behavior (i.e., the sites visited/actions undertaken), but is controlled by the desktop application, not the site being used. 2009: Google revolutionized e-commerce and advertisement publishing by adopting behavioural targeting at a very large scale which was then followed by other search engines, social networking sites and other e-commerce sites.
2
TYPES OF BEHAVIORAL TARGETING
Some of the methods that are being used by e-commerce giants while using behavioural targeting are:
?
E-mail personalization: Ecommerce players could analyze your movement around their website and trigger an instant email to you with a relevant marketing message. Also it can be seen that when we use Gmail and other personalize mail services, usually we get advertisements which more or less relate to the content of the kind of mails that we are getting. These ads are usually displayed by picking up the keywords that spider (a kind of robotic algorithm) can interpret. Website personalization: An ecommerce business usually has a large array of offerings. So which ones does it highlight? Which ones does it feature on its homepage? By analyzing the visitor's browser click streams, the ecommerce website can be personalized to highlight products that the visitor is more likely to be interested in. Website personalization is one of the methods of increasing shopping cart conversion. If we visit Nike online studio, we have number of options to let the homepage be customized. It helps in looking at the offers in which one is really interested in and what kind of trends one wants to follow. Deal Customization: It is not just about which product to highlight, it is also about the type of deal that would work best for you. For instance, if an ecommerce merchant sees that you have visited his special Keralite massage page multiple times, he could offer you a small discount to nudge you towards making the purchase.
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ONSITE VERSUS NETWORK BEHAVIORAL TARGETING
Onsite behavioral targeting is when a company collects data for a specific user only on their site. The company then takes the data they collect and uses it to post more relevant offers to that user while they‘re on the site. For example, an e-commerce company knows the past purchase history of a customer, and offers complementary products when they return to their site. Network behavioral targeting is when a company collects a user‘s data across an unlimited number of Internet sites. This means that they track you no matter what site you‘re on and then serve you ads and offers all over the Internet based on your past online activity. For example, you visit several different e-commerce sites in search of horse attire. Then when you go on to a site like Yahoo, you‘d see ads related to horses; or, on a site like Ebay you‘d only see content that relates to horse gear when you first hit the homepage2.
3
KEY PLAYERS IN BEHAVIORAL TARGETING
Different players in behavioural targeting are identified as follows: a) Publisher sites: These partners with behavioural targeting specialists to track users on individual basis or site-by-site basis. They have proprietary ad management and analytical tools to track behaviour of website traffic. Examples are Revenuescience and Tacoda. b) Advertising networks: These together with behavioural targeting specialists and their own proprietary tools target networks to reach wider audience and more tightly define target criteria. c) Desktop Applications: As mentioned earlier, the desktop applications were the first to cut through in the second wave of behavioral targeting. They also have the unique ability to track all online behavior and deliver advertising at any time when a user is online. There is no issue of legal infringement because user has himself agreed on to install such a tool on its system and let e-commerce sites present relevant advertisements online. Claria and WhenU are leading examples of desktop application software d) Third party ad server Option:
These work in an altogether different manner. They help display ads based on frequency of visit and kind of activity the user indulges in. Different segments are created based on customer site registration, usage, transaction data, click stream behaviour etc. Also segments are sometimes created based on minimum number of visits made. For example a person is stated to be interested in auto sector if make visit to automobile websites for suppose 45 days in three months time. It shows that the user is very interested in automobiles. Depending on the characteristics it can be determined whether the user is planning to buy a firsthand/second hand automobile or is looking to hire one or wants to start some business. However, as a default ad must be served for users who do not fall into the appropriate segment, the numbers can often be quite small, and this is a key consideration before set-up. The default message must be carefully considered, and often more generic or ?brand? messages are used as a default to exploit this other possibly wasted inventory to the full. The segments can directly reflect consumer/advertising relationships. All sites that are ad served can be used to target behaviorally, and the media cost will not be inflated through the process of targeting.
4
HOW DOES BEHAVIORAL TARGETING WORK
Source: www.mediacontacts.com
Most advertisers rely on ad networks to do their behavioral targeting for them. Ad networks are essentially middlemen technology companies that partner with hundreds (sometimes thousands) of websites for access to information about visitor traffic. These Adnetworks are also known as Behavioral Technology Provider. Websites drop ?cookies,? or small pieces of data, onto consumers‘ hard drives to keep track of user preferences, the contents of their electronic shopping carts, their searches, and details on where and when users click on a site. Websites also collect visitors‘ IP addresses — the numerical code that identifies each computer connected to the Web and its geographic location. When the user again visits a publisher‘s site, publisher Ad server contacts BTP segment database and using the information that has been collected, advertisements are matched according to the behavioural aspects of the visitor and relevant ad is selected to serve the user3.
5
The parameters which are looked at while gauging the behaviour of the visitor are not just based on the WebPages which they visit. Typically, following types of visitor specific data can be tracked by the server (note that the list is not exhaustive): ? ? ? ? ? ? ? ? City and Country from where the visitor is accessing the website (useful for geotargeting) Local time of the visitor (useful for determining if the visitor is a night or morning person) Browser used, Operating System, Screen Resolution, Internet Speed (is visitor accessing the site from his mobile? Is visitor technologically more savvy and using Linux? It is amazing how much information do visitor system statistics reveal.) Type of page viewed by the visitor (made possible by tagging the page) Time spent on page, when did he accessed this page last time and number of times accessed the page (tells us about interest, recency and frequency of the visitor) Made any purchases? Value of those purchases? (gives us an indication of how monetarily valuable a visitor is) Where did this visitor comes from? If search engines, which keywords did he use? (useful for targeting content based on the inferred intent through the use of keywords –for example, for the term ?buy? and for the term ?free?, you would want to tailor the content differently)
Based on the matching of behavioural patterns, relevant ads which are served are again based on two parameters4, a) Retargeting: Serving ads to consumers after they visit a website, based on the premise that their visit must imply interest in the advertising company‘s products or services. Retargeting does not consider the frequency of a user‘s visits, however, to determine interest level. b) Contextual targeting: In contrast to behavioural targeting, which serves ads relevant to users‘ interests and actions, contextual targeting serves ads relevant to the content on a Web page.
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PRICING OF ADVERTISEMENTS
As far as advantages to companies are concerned, they are huge by use of behavioural targeting but at the same time there is a pricing associated with publishing of advertisement banners. There are several ways of pricing online advertisements5, ? ? CPM or cost per-mille impressions: publisher is charged for every view of the ad and each view is considered to be an impression. Example: a $3 CPM means that for every thousand people that see an ad, the advertiser pay $3. CPC or cost per click: Advertiser pays only when a person clicks on ad. Example: CPC is the rate of a single click.
Depending on the requirement/objective of the advertiser, CPM/CPC can be chosen. When advertiser who wants to increase awareness of its brand prefer to use CPM. On the other hand, advertisers who want to get their products sold use CPC.
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ADVANTAGES OF USING BEHAVIORAL TARGETING
? ? ? ? ? ? ? Reach a highly qualified and differentiated audience with specific messages. Connect targeted segments with the right message at the right time in the buying cycle Discover new customer segments with which your messages best resonate. Increase conversion rates by focusing messages on the right audience at the right time. More cost-effective campaign. Marketers pay to reach only potential customers who have shown demonstrated interest, and serve ads only on Web pages that these customers visit and have affordable ad space. One of the great advantages of behavioral targeting is that it enables marketers to consider multiple consumer behaviors when developing their advertising campaigns. As far as core concepts of Marketing goes, behavioural targeting helps user move through four phases namely, brand awareness, message association, brand favourability and purchase intent.
DISADVANTAGES OF USING BEHAVIORAL TARGETING
? ? ? The drawback here is that ad networks can only track consumers when they click within websites that have partnered with the networks themselves. Customer privacy is a very big issue. The recent issue of Facebook agreeing to sell user information to marketers is in line with this issue. The most important drawback of behavioural targeting is that data is not personally identifiable. It is restrictive in terms that who uses computer is not known to the algorithm and thus in a family of four, some efficiency is lost. Tracking technology still has trouble distinguishing multiple people using the same computer. Consumer preferences change very fast and if there is slight delay in targeting, then that customer can be lost. Scale: There are thousands of people visiting website daily, thereby creating loads of data to be analyzed. Understanding and analyzing to draw conclusion and chalk out strategies is not an easy job. It requires right tools and right understanding of the subject.
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EXAMPLES OF COMPANIES USING/USED BEHAVIORAL TARGETING
? Yahoo Behavioral targeting enables advertisers to target consumers with expressed interest in a category or specific product. Yahoo! BT goes beyond the more common rules based segmentation or clustering of users by sites visited. Their solution is powered by sophisticated modelling technology based on extensive online interactions that include searches, page-views and ad interactions. With these models, Yahoo! identifies what consumers are interested in and predicts where they sit in the Awareness-Consideration-Purchase funnel. In early 2007, in association with ad network Tacoda, Pepsi tried to serve behaviourally targeted ads during the launch of its mineral water ?Aquafina‘. The campaign targeted ?health-conscious? consumers, and then served them ads wherever they travelled within Tacoda‘s network of 4,000 sites. This campaign itself helped Pepsi attract three times the normal customers6.
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Google has been the largest beneficiary of using behavioural targeting by serving ads based on interest. Its revenue through ad banners increased many fold after launching use of this technology. For example, an expectant mother may see an ad about baby products not only on a parenting site but also, for example, on a sports or fashion site that uses AdSense or on YouTube, which is owned by Google. Amazon has very successfully used behavioural targeting. When someone returns to Amazon‘s website, it recommends a list of books one might want to purchase. Amazon infers interests of the visitor from his/her past purchases and any title she/she have previously looked at on Amazon. Nike and Coca-Cola divide their website entrances by country. Thus, they are able to divert customers into the area of their website that is designed to meet their needs in particular as product availability differs internationally. Facebook's Sponsored Stories, which debuted in january, is a new form of behavioral targeting. Not the type that drops a cookie in a Web browser and then an ad network matches the information in the cookie with an advertisement -- but rather, targeting based on social signals that identify behavior. So, if Sony buys a Sponsored Story ad and a user checks in or "like" (s) the brand, the status update will run in the user's news feed, and again as a paid display ad for the brand. eBay is sharing information about visitors' past activities with its partners in order to serve up targeted advertisements - both on eBay and off. Some banks are using behaviourally targeted ads. When a user login to online banking, he will find in his statement, there are targeted behavioral ads based upon his purchases. It's the new reward program some banks are offering; if user click on the link, it automatically activates, and then the advertiser will automatically recognize user‘s debit or credit card next time he visit that merchant and use the same card. Airline carriers in their websites and portals like makemytrip.com or cleartrip.com have very successfully used behavioural targeting to provide offers to the customer by looking at the past purchases and getting deals which are unmatchable and simply affordable. NebuAd: This ad company developed proprietary hardware to allow ISPs to collect surfing data on every person who connects through their services — wherever they go on the Web. NebuAd then creates detailed consumer profiles for ad networks to purchase. The company does not disclose which ISPs use its technology.
PRIVACY/LEGAL ISSUES
An immediate concern associated with behavioral targeting is whether privacy regulations are compromised in the process. Behavioral targeting technology does not identify the individual through any personal data; it purely tracks where the individual has been online. Therefore, all information is anonymous and privacy regulations are not compromised. The main issue with this technology is use of personal data without the consent of the concerned. Aside from the issue of consent, there are also obvious online content areas that must be avoided when advertising. Such content includes children-related, personal health, sexual behavior, detailed financial, government related, and social security number and secure site areas. In a recent survey of online consumers conducted by BURST! Media, 20 percent of respondents were prepared to have their information tracked if it meant more relevant advertising but 56 percent would not approve data collection of any type.
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One major concern is the confusion consumers seem to have when it comes to adware programs and spyware. Adware companies‘ offer consumers free downloads of software programs in exchange for receiving highly targeted ads. In contrast, spyware does this without the consumer‘s knowledge or consent. Another industry concern is cookie deletions. If asked, most consumers will be unable to define what a cookie is -- a small file stored on a computer containing information for a specific website -- but that won‘t stop them from believing that cookies are a nuisance. One of the side effects of consumer‘s taking action and cleaning their computers of unwanted adware is the elimination of cookies. With one click after scanning with software products like Spybot or Ad-Aware, the option exists to eliminate these seemingly innocuous tracking devices from their computers. Sometimes software solutions highlight third party cookies as ?potential threats? to prove their software is extra aggressive. Nearly 40 percent of internet users delete cookies from their primary computers on at least a monthly basis, according to a study by Jupiter Research, an international research advisory organization specializing in business and technology market research. Based on a survey of 2,337 U.S. respondents, the study found that 17 percent of internet users delete cookies on a weekly basis, 12 percent on a monthly basis and 10 percent daily. The study has implications for advertising and marketing firms that depend on cookies for tracking and targeting, especially ad delivery networks that are relying on third party cookies (cookies placed by an internet site other than the one people are visiting). Other studies put the percentages anywhere from 38 to 55 percent. Google‘s privacy concerns, In 2008, Google claimed that their technique was different from behavioral targeting since they only capture what the user recently searched as opposed to others who look at what the user did day‘s ago7. Google also mentioned about ?technological safeguards? for the chat messages and emails in the Gmail accounts, yet they failed to disprove that it is an e-mail service that analyzes the content of the user‘s messages to tailor advertising and act as surveillance systems, performing without the knowledge of the users. Their intention of grabbing personal information was clear when they purchased DoubleClick, another means of tracking individuals online. When the Viacom ordered Google to reveal the usage logs of Youtube.com, Google objected, arguing that the combination of IP addresses and usernames could identify individuals who used YouTube, although an engineer of Google concluded that in most cases, IP addresses alone cannot identify an individual.
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INITIATIVES TAKEN TO SETTLE PRIVACY ISSUES8
Apart from legal actions that have been taken to ensure that confidential and personal information of internet users is not misused, several websites have taken initiatives to look into this matter. These instances have been listed below, ? Ask.com announced a new tool that allows users to request that Ask not retain any of their search queries -- the only tool of its kind among the major search engines. For search query logs that Ask does retain, specific user information (IP addresses and cookie identifiers) will be deleted after it has been stored for 18 months. Google has decided to limit the lifetime of its cookies to two years, causing them to expire on the computers of users who do not visit the search engine for two years. Google will also partially obscure IP addresses and cookie identifiers in its search logs after they have been stored for 18 months. Microsoft has announced that it will remove all IP addresses and cookie identifiers from its search logs after 18 months, and will store search logs separately from account information (name, email address, or phone number). Yahoo will soon announce a new policy to delete portions of IP addresses and cookie identifiers in its search logs after 13 months. After 13 months Yahoo will also apply a personal information filter to remove names, social security numbers, addresses, telephone numbers, and other personal information from its search logs. Yahoo plans to limit the lifetime of its cookies to two years. In July 2000, the FTC recommended that legislation should be passed to protect Internet user‘s privacy with regards to OBA (or online profiling as it was then known) for the first time The FTC further stated that ?backstop legislation addressing online profiling is still required to fully ensure that consumers‘ privacy is protected online? and recommended that [technology neutral] legislation be passed that created a basic level of privacy protection for users of ?consumer-oriented commercial websites with respect to profiling.?[13] Under the FTC‘s 2000 proposal all online advertising networks and consumer oriented commercial websites that allowed the collection of information from or about consumers would be required to implement and comply with the FIPs.
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As per report, ?Search Privacy practices: A work in progress‘ by Center for Democracy and Technology (CDT) in 2007, following orders has been issued,
FUTURE WORK
The most important work that needs to be done in the space of behavioural targeting is to recognize in some manner who actually is the person using the computer. As has been given in the disadvantages, in a family of four, behavioural targeting is not able to distinguish between the users unless the login accounts are different for family members. If this issue is solved, then behavioural targeting will be able to overcome several of the issues. There are various trends which can be identified and can be called future of behavioural targeting, ? ? Currently, mobile advertisers use traditional methods of ad targeting: device, demographic group or context. But in five years, mobile ad targeting will become more relevant to a person‘s behavior and current location. Behavioral targeting will be used in journalism. Using Digital Identities and Journalistic Content, a behavioral targeting AI engine will be created. First, it will analyze all journalistic content by a user, and each content will be tagged or annotated automatically. Second, these tagged content and the digital identity of the consumer will be sent to the Assessment Rule Engine, which will then send relevant ads to that consumer.
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The areas everyone is most excited about are more robust targeting, improved reach via appropriate segment standardization, and the fact that reach will grow as the marketplace develops. ? TACODA ?Audience Match? plans to launch an audience-centric ad network modelled after contextual ads that will be sold in web-based auction. It will combine demographic data and behavioral targeting to reach the defined segments of a significant size. DART plans to launch a behavioral targeting option for its publisher sites/DFP.
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CONCLUSION
Behavioral targeting is one of the most important marketing tools in the e-commerce industry. Its prudent use keeping it within the boundary of laws and giving it ethical treatment will help reap gain tremendous market shares. It won‘t be just market share but will also be mind share. After studying the working, advantages, disadvantages and future scope of behavioural targeting, the advertiser needs to acknowledge that customer does not think the way a consumer thinks. In the race of technology, human variable should not be ignored. In general, implementing a behaviorally targeted element is compelling when faced with a hard to reach target, when trying to deliver aggressive direct response objectives, or when using specific creative messaging strategies for different audiences. The key is to implement behavioral targeting with a clear strategic perspective on how consumers will respond; there is also no harm in adopting a test and- refine approach to learn what works without risking major negative exposure if a tactic proves inappropriate. So the key is to improvise upon any model and not to abandon the effort without proper evaluation.
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REFERENCES
1. iNSIGHT MV. (2004, October). Retrieved November 12, 2011, from www.mediacontacts.com/wp-content/uploads/behavioral.pdf 2. patil, L. (2008, July 21). Is Behavioral targeting really internet stalking? Retrieved November 16, 2011, fromhttp://lunchpail.knotice.com/2008/07/18/is-behavioral-targeting-reallyinternet-stalking/ 3. Khurana, A. (n.d.). Ecommerce basics. Retrieved November 20, 2011, from About.com:http://ecommerce.about.com/od/eCommerce-Marketing-Strategies/a/BehavioralTargeting.htm 4. Beales, H. (2010). The Value of Behavioral Taregeting. Network Advertising Initiative. 5. yan, J. (2009). How much can Behavioral targeting help online Advertising. Madrid: World wide web conference.
6. Whats New. (2009). Retrieved November 22, 2011, from Yahoo! solutions:http://in.advertising.yahoo.com/solutions-behavioral-targetting.php 7. Behavioral Advertising. (2010, June 1). Retrieved November 23, 2011, from Behavioral taregeting Blog:http://behavioraltargeting.biz/a-different-look-at-google-privacy/ Privacy Initiatives Key to Addressing Behavioral Targeting Concerns. (2007, August 8). Retrieved November 24, 2011, fromhttp://www.cdt.org/policy/privacy-initiatives-keyaddressing-behavioral-targeting-concerns
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