Behavioural targeting - what's that about then?

With media spend in the UK on online advertising networks set to grow by 60% in 2008 to an estimated £385m according to a recent report published by e-consultancy, advertisers are increasingly seeking to get more return for their spend.

Other than a great message and creative, the key to the effectiveness of an advert is relevancy. The more relevant the advert is to the end user, the more likely it will result in an action. Behavioural targeting is the method of targeting adverts to consumers, based on their online behaviour and is being hailed by many as the next big thing in online advertising.

Behavioural targeting goes one step further than simple segmentation and demographic targeting, by allowing advertisers to monitor the behaviour of users and have advertising react according to their behaviour.

For example, say you’re looking at loans on MoneySupermarket, but then decide to browse the news pages on another site, you might start seeing loans banners appear. This is behavioural targeting in action and is by no means coincidence.

Other methods include re-targeting – where banners of the last site you have visited appear on the next site you go to – to encourage you to re-visit the last site.

Advertising.com – the largest advertising network in the UK, has over 89% coverage of all UK websites, serving 3.5bn impressions each month. This means that a high proportion of the sites people visit will likely to be on their network. What this means for the advertisers is that they can build up a detailed picture of people’s behaviour – sites visited, time spent on those sites, propensity to click on different ad creatives and so on.

Facebook is another good example of behavioural targeting being utilized. It is the perfect platform for running behavioural advertising due to the large amount of personal information given away on the site. Businesses can create their own pages on Facebook for the first time and target ads on Facebook based on what users and their friends buy and do online. This is all through Facebook’s behavioural targeting system called Insights. Advertisers will also be able to show users their pitches in the guise of a friend's endorsement. For example, if the friend just booked a holiday on Expedia, the online travel agency will be able to display the friend's photo to entice the user to buy flights and hotel stays.

Multivariate testing is also used by many sites to optimise visitor conversions (lookers-to-bookers). This is the process of live testing variations of creative on sites to see which receive the most clicks. It is also used to increase relevancy of content to regular visitors. For example, your bank may use it. If you already have a current account but not a savings account, the site will know this when you log on to your internet banking. The adverts you will see will be for other products that you do not already have e.g. savings accounts, loans and credit cards. It is cross-selling at its most intelligent.

So what does all of this mean to us as an agency? It gives us the ability to provide the end user with content that is more relevant to them as an individual and spare them unnecessary advertising that won’t deliver cut-through. It enables us to give our clients a better ROI on their ad-spend and to achieve better results enabling them to re-invest. It also allows us to learn more about audience behaviour – trends, patterns and responses by multiple segments all at once. Serving an ever-growing audience with increasingly relevant content is our holy grail.

If you would like to know how behavioural targeting can help you, contact oliver@bluhalo.com

Best,

Oliver