Targeting is the name of the game in Internet marketing. Online marketing strategies such as SEO and PPC already hone in on a self-selected audience via search keywords. Behavioral targeting drills deeper, exploring users behavior on a particular site or across multiple sites, and serving relevant ads based on that information.

Behavioral targeting is emerging as the next big thing in online marketing. After all, the more relevant the advertising message, the more successful the campaign. Targeting is helping businesses get more mileage from their advertising dollars.

Behavioral SEM in Action

Traditional search engine marketing is based on keyword searches. Behavioral targeting services use tracking cookies to glean (anonymous) demographic information about Web surfers as well as behavioral information about their surfing habits. Targeting covers network search behavior as well as onsite tracking, which allows Web site owners to follow potential customers in later stages of the buying cycle.

For example, onsite behavioral targeting allows businesses to:

• Identify and re-target Web site visitors who viewed the product or service but did not purchase. A special offer or strong call to action could convince the interested party to buy on the second pass. Onsite behavioral targeting allows the business to moderate the message based on how far the user progressed before abandoning the purchase.
• Identify and target customers based on which sections of the site the user visited, delivering a message tailored to that demonstrated interest. For example, if the user visited the travel section of a particular site, the advertiser may focus an offer accordingly.
• Identify users displaying the same browsing habits of past customers, and serve ads matching their peers purchases.

Network behavioral targeting allows the online advertising service to collect Web-browsing data across a broad spectrum of partner sites. Yahoo! is a leader in this space; a March 2008 study by comScore and The New York Times found 2,520 potential data collection points per user on Yahoo! network sites. Information elicited from these contact points includes:

• Zip code
• Search queries
• Search patterns (for example, mens interest sites)
• Purchases

Online marketing services may partner with a network like Yahoo! to offer clients targeted advertising based on this information. For example, an adventure vacation site could serve advertising to users who have surfed travel sites, sites directed to the 25-40 demographic, or people who have purchased adventure sports gear.

Combining Forces: Onsite and Network Behavioral Targeting

The ultimate goal of behavioral targeting is to cut the clients cost per sale (CPS). Online marketing companies combine both onsite and network targeting to achieve the lowest CPS. For example, one SEM service representing a theme park began by targeting "consumers in specific geographic areas whose online behaviors indicated a high likelihood of purchasing." Later in the campaign, the service re-targeted reluctant consumers using data from users onsite behavior. As a result, the theme park was able to lower its CPS from $125 to $93.85.

These sorts of results are laying the foundation for growth in the behavioral targeting market. Currently valued at a little under $1 billion, eMarketer projections expect behavioral targeting to grow to $4.4 billion by 2012. Already an improvement over traditional search engine marketing, behavioral targeting is continually honing its performance as the advertisers networks of Web sites expand.

Sources

Search Marketing Standard
eMarketer
SEMPO
The New York Times
BehavioralTargeting.com