Behavioral targeting is a relative newcomer to advertising targeting. It’s the practice of serving ads to users based on their past search behaviors and web-surfing habits. And even though behavioral targeting is fairly new, it’s getting a lot of attention from web marketers.

Behavioral targeting is so effective because search marketing has expanded so much. In the past, search marketing was only about search. Today, search marketing can target demographics, dayparting (addressed in Chapter 9), and behavior. And because today’s audiences are more fragmented than they have ever been, the more specific marketing efforts can be, the more effective they’ll be.

Behavioral marketing has many other benefits, too. For example, although behavioral targeting results in fewer impressions, it also results in a higher conversion rate, because the ad is more targeted than a contextual ad might be. Additional benefits of behavioral targeting include:

• More Click-Throughs: Click-throughs are those times when potential customers or site visitors click through your PPC (or other) ad and land on your site.
• More Conversions: As you’ve seen already, behavioral targeting tends to reach fewer people, but it results in more goal conversions. Because your goal conversions should be designed to result in either a sale or the collection of data to help you reach a sale, the conversion rate for ads placed using behavioral targeting is much higher.
• Improved Return on Investment: Return on investment is the metric that seems to drive everything these days. Behavioral targeting helps to improve the ROI of your PPC and other advertising programs, because ads placed using behavioral targeting are more pinpointed to the type of audience that is most likely to make a purchase, provide data, or sign up for a newsletter or other service.

Another element that makes behavioral targeting more attractive is the growing ability of companies to capture and record behavior. This is accomplished through the use of cookies, which are small pieces of code that make it possible for companies to track how people behave on the Web without capturing any specific personal information about those people.

The concept is this: a company places a cookie on a user’s hard drive, and then using that cookie tracks what the user searches for online and then where the user travels within those search results. Say that you’re contemplating buying a hybrid car. The first thing that you’re likely to do is research hybrid cars on the Internet. If a search company (or some other organization) is tracking your search movements, they’ll learn that you’re researching hybrid cars.

At this point in the purchasing process, you’re not ready to commit to buying a car, so an advertiser may hold its ads back, not wanting to pay for exposure that results in no conversions. However, the company that placed the cookie on your hard drive can continue to monitor your searches and movements on the Web. Then when you begin to search for the phrase “buying a hybrid car,” or something similar, the search company can alert the advertiser who will then place an ad in front of you. This ensures that you’re in the right frame of mind to see the ad, which means that you’re more likely to click through the ad and reach a conversion goal than other surfers might be.

The truly useful element of behavioral targeting is not that you’re tracking users’ behaviors, but that you’re meeting these potential customers in the place where they are most likely to make a purchase, sign up for your newsletter, fill out a form for more information, or accomplish whatever conversion goal you’ve established.

This search profiling also has the added benefit of allowing you to target your ads much more effectively in the buying process. It’s the part of behavioral targeting that seems to draw the most attention. But it allows more than just pre-purchase (or pre-conversion) advertisements. You can also use search profiling as part of behavioral targeting to develop appropriate post-search ads.

Post-search ads appear on the landing pages that you or others have created. These ads are highly targeted to the people who are most likely to click through a PPC ad to reach the landing page. Once there, the ads offer additional, related products and services. These post-search ads are popular because they tend to get more traffic than some other types of advertising, leading to more goal conversions than with other types of advertising.

When behavioral targeting is used, there are several methods by which behavior is evaluated. Those methods include:

1. Expected Behavior: Expected behavior is just that - what you would expect users to do on a given type of site. For example, if you operate a site that requires users to log in to use the site, even if it’s a free site, you would expect users (who are also qualified sales leads) to fill out the form necessary to sign up for your web-site service. This behavior can sometimes allow you to see patterns that you would not have otherwise seen in the behavior of your customers or potential customers.
2. Repetitive Behavior: This the same type of behavior from potential customers over and over again. This could include everything from users accessing your pages in a certain order, to users repeatedly jumping to your site on a specific page or at a specific time. This repetitive behavior makes it much more possible for you to define patterns of behavior that lead to purchasing decisions or to other decisions that lead to the targeted goal conversion.
3. Sequential Behavior: This occurs when users sign on to your site and then visit pages or perform actions in a sequential manner. Monitoring sequential behavior helps you to discover established routines that lead to goal conversions. When you know what users are likely to do, because their habits are always the same, you’re more likely to stay one step ahead of your competition.

Tags: Behavioural Targeting, Pay Per Click Advertising, PPC, Search Engine Marketing, Search Engine Optimization, SEM, SEO

This entry was posted on Tuesday, June 22nd, 2010 at 3:22 pm and is filed under PPC, SEM, Search Engine Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.