Contextual advertising has been getting a lot of press lately, chiefly because of its effectiveness. Compared to other online ad targeting methods, such as targeting by demographics, contextual targeting produces better response. But contextual advertising is just part of a larger movement that is sweeping the online marketing world. This movement is known as behavioral marketing.
Contextual advertising represents the first step in a shift in how we think about audiences. Rather than targeting audiences solely on demographics (Men 18-49, College graduates 18+), marketers are learning to target by online behavior. The first step is to shed the well-established offline demographic targeting methodology and begin to look at the mindset and observed actions of the consumer. Contextual advertising does just that.
Take, for instance, keyword advertising on search engines and portals. A car manufacturer who bids on keyword "minivan" is hoping to capture prospects based on their web behavior - searching for information on minivans at a search engine. The car manufacturer hopes not only to reach the right prospect, but also to reach that prospect at just the right time, when he's searching for information. But contextual advertising in this fashion is only scratching the surface of the ability to target desirable consumer behaviors.
What if an advertiser could identify a minivan buyer entering the consideration process by, say, noticing that the consumer was gathering information from a number of auto-related websites? Furthermore, what if marketers could identify behavior that indicated that a consumer was moving down the consideration funnel and is deciding between two specific models/options? There is a tremendous opportunity to present a targeted and relevant message when these types of behaviors are identified.
That's what behavioral marketing is all about, and what the Claria Corporation has been doing for years. Not simply presenting ads in context, but varying the content of the ad based on individual consumer behavior. By way of comparison, let's use a hypothetical example.
A search engine sees a person searching for "flights to Europe." Aside from the person's indication that they're looking for flight information, the search engine doesn't know anything specific about the person's needs. For example, the search engine doesn't know if the person is a heavy traveler, a loyal user, or how often that person views an airline site or other travel category sites. The search engine does know that the person is interested in the general travel category and can certainly trigger an airline's generic "one size fits all" ad. This is certainly better than what most web site publishers can offer with their demographic profiling approach - and this example of the contextual marketing model certainly does offer tremendous value. But it only scratches the surface of the capabilities of the larger entity - behavioral marketing.
Like the contextual marketer, the technology behind behavioral marketing sees that same person viewing an airline site. But the difference is that the behavioral marketer has an ongoing relationship with the consumer - they know much more about this person than the contextual marketer. The behavioral marketer knows:
- If this person is loyal to a specific airline
- If this person is a heavy traveler or light traveler
- If this person is a repeat customer or first time customer
- If this person bought travelers insurance that last time that they purchased a ticket
- If this person belongs to a frequent flier program and cares about mileage points
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These are all behaviors that can be easily identified by behavioral marketers, and advertisers have the opportunity to be able to craft and present targeted messages and promotional offers to consumers who display these specific behaviors.
Not surprisingly, behaviorally targeted advertising produces better results than that of content-targeted or demographically-targeted ads. Appealing to the mindset of the consumer through behavioral targeting can produce click rates in the double digits, something not seen since the mid-1990s. Back-end conversion rates are equally impressive.
Offers can be customized at the consumer level only if a marketer has access to historical context, data and insights. The data and the insights are a huge value to the advertiser.
What are the benefits to consumers? While no consumer is clamoring to see ads while they are online, consumers do find value in ads that they perceive as relevant information. If a consumer who is planning a trip sees a travel ad that's customized to their known travel patterns they are more likely to find that ad interesting, they are more likely to conduct a transaction, and they are more likely to feel favorable towards the advertiser.
As a marketer, if you're seeking to identify a very specific behavior, perhaps only a small slice of the Internet population will be displaying that behavior at any given point in time. So, not only do you need the ability to observe that behavior, but you also need a large pool of potential prospects from which to pull the relevant prospects.
As a leader in the behavioral marketing space, Claria can deliver this scale. We have permission to observe the Web-wide behavior of tens of millions of desktops. So no matter how obscure or niche the behavior you're looking to identify, we can find it.