Social Media and Technology Trends
Online Consumer Behavior
Web advertisers study online behavior and use the results to increase the effectiveness of their campaigns.
LEARNING OBJECTIVES
Explain the relationship between behavioral targeting and online consumer behavior, and how behavioral marketing influences online advertising
KEY TAKEAWAYS
Key Points
- The web has become the new ‘zero moment of truth‘, or ZMOT (Google, 2012) for consumers today. Marketers need to understand where their customers are going to research their products / services and what they are doing on the web to help form their purchase decision.
- Site publishers can use the data generated from website pages and the searches made to create defined audience segments based on visitors that have similar profiles. Layering this data with other demographic & psychographic data helps marketers build out personas of their key customer segments.
- Not all consumers behave the same online. Customers’ online behaviors will fall along a technology adoption curve; innovators will be excited by the latest upgrade or feature, while others will resist change. Further, there is a chasm between the early technology adopters & the mainstream market.
- When visitors return to a specific site using the same web browser, profiles generated from data collection can be used to allow advertisers to position their online ads in front of those visitors who exhibit a greater level of interest and intent for the products and services being offered.
- Many online users are concerned about privacy issues around doing this type of targeting. The behavioral targeting industry is trying to contain these concerns through education, advocacy, and product constraints to keep all information non-personally identifiable.
Key Terms
- conversion rates: In internet marketing, conversion rate is the ratio of visitors who convert casual content views or website visits into desired actions based on subtle or direct requests from marketers, advertisers, and content creators.
- Cookie: Also known as an HTTP cookie, web cookie, or browser cookie, it is usually a small piece of data sent from a website and stored in a user’s web browser while a user is browsing a website.
- segments: Market segment — the smaller subgroups comprising a market
Online Consumer Behavior
Introduction
When consumers visit a web site, data is gathered about their online behavior. The site collects information about the visitor that includes the following:
- Pages visited
- Amount of time spent on each page
- Links clicked
- Searches performed
- Components with which they interact
The sites collect the data, along with other factors, and create a profile that links to that visitor’s web browser.
Site publishers can then use this data to create defined audience segments based on visitors that have similar profiles. When visitors return to a specific site or a network of sites using the same web browser, those profiles can be used to allow advertisers to position their online ads in front of those visitors who exhibit a greater level of interest and intent for the products and services being offered.
On the theory that properly targeted ads will fetch more consumer interest, the publisher (or seller) can charge a premium for these ads over random advertising (or ads) based on the context of a site. Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography, demographics, or contextual web page content. It’s worth noting that many practitioners also refer to this process as audience targeting.
Behavioral Targeting
On the theory that properly targeted ads will fetch more consumer interest, the publisher (or seller) can charge a premium for these ads over random advertising (or ads) based on the context of a site. Behavioral marketing can be used on its own or in conjunction with other forms of targeting based on factors like geography, demographics, or contextual web page content. It’s worth noting that many practitioners also refer to this process as audience targeting.
Behavioral targeting refers to a range of technologies and techniques used by online website publishers and advertisers that allows them to increase the effectiveness of their campaigns by capturing data generated by website and landing page visitors.
Behavioral targeting techniques may also be applied to any online property on the premise that it either improves the visitor experience or it benefits the online property, typically through increased conversion rates or increased spending levels. Some of the early adopters of this technology/philosophy were among the following:
- Publishing sites such as HotWired
- Online advertising with leading online ad servers
- Retail
- Other e-commerce websites
What about My Privacy?
Internet Usage: This is a basic chart showing online usage. It displays the types of online activity and how long the person was on those types of websites.
Many online users and advocacy groups are concerned about privacy issues around doing this type of targeting. This is a controversy that the behavioral targeting industry is trying to contain through education, advocacy, and product constraints to keep all personal, identifiable information from end-users or to obtain permission.
The European Commission has also raised a number of concerns related to online data collection (of personal data), profiling, and behavioral targeting, and is looking to enforce existing regulations. While behavioral targeting is not new and many companies are using it, companies like Google tried to alleviate the worries about profiling users. They won’t create sensitive interest categories, like race or religion and it won’t cross-correlate the data with other information saved in Google accounts.