Have you ever felt like online advertising was following you around the internet? You’re not imagining things. As advertisers collect data on how you use the internet, they serve you the same ads on social media, websites, and mobile apps—all in the hopes of providing enough exposure to those shoes you’ve been eyeing to convince you to click the Buy button. This is just one instance of the behavioral targeting process in action.
If you work in ecommerce marketing, you can use behavioral advertising strategically. By monitoring your users’ online behavior, you can serve them tailored advertising that’s keyed into their interests to boost your sales conversion rates.
What is behavioral targeting?
Behavioral targeting is a marketing strategy that involves collecting data on an individual’s online habits—think web browsing behavior, search queries, and purchase activity—to deliver personalized advertising messages.Behavioral marketing aims to improve the relevance and effectiveness of advertisements by targeting users through their unique online actions rather than just demographic information.
Contextual advertising vs. behavioral targeting
Behavioral targeting is a more precise form of online marketing than contextual targeting, which occurs when a website visitor sees ads that match the content of the particular website they’re visiting. For instance, if they’re on a travel blog, they may see display ads for rental cars or hotels.
Contextual advertising doesn’t account for user behavior across the internet. Everyone sees the same contextual ad when they visit a travel site because the ad content targets keywords, not specific users’ online behavior. Contextual ads are a more affordable form of digital advertising because they don’t require third-party data from ad networks; however, contextual ads may be less effective in delivering relevant content to target customers because they lack the personalization of behavioral ads.
Types of behavioral targeting
Here are some common types of behavioral targeting:
Onsite behavioral targeting
Onsite behavioral targeting focuses on user actions within a specific website or app. It tracks behaviors like page views, time spent on certain pages, items added to cart, and past purchases. With this data, you can deliver personalized marketing messages, as well as onsite recommendations. For example, if a user frequently browses the electronics section of Amazon, they may see ads or product suggestions related to electronics.
Network behavioral targeting
Rather than analyze consumer behavior on one specific website, this type of behavioral targeting collects data across multiple sites to deliver personalized ads. This lets advertisers provide relevant ads depending on a user’s broad-scale browsing patterns. For instance, after researching laptops on one website, a user may see laptop ads on unrelated sites within the same ad network.
Social behavioral targeting
Social behavioral targeting focuses likes, shares, follows, and other data collected from a social media platform (or multiple platforms) to display personalized ads. It also factors in demographics, interests, and behaviors shared across social platforms. For example, if you follow a lot of fitness pages on Instagram, you might see many ads for workout gear and health supplements.
Retargeting
Retargeting, or remarketing, serves ads to users who have previously visited a website but didn’t make a purchase. Retargeting ads showcase these sites and products to users as they browse other websites, reminding them of what they viewed.
5 advantages of behavioral targeting
- Increased ad relevance
- Better user experience
- Higher conversion rates
- Retargeting opportunities
- Greater return on investment
Online behavioral advertising leverages a user’s web browsing behavior to produce personalized marketing campaigns. Here are five benefits of behavioral targeting:
1. Increased ad relevance
Behavioral targeting can help you display relevant ads and create stronger marketing campaigns. Using browsing history, search queries, and past actions, you can deliver personalized ads that align with customer interests.
You can also segment users by where they fall in the sales funnel—like frequent site visits or repeat purchases—to create even more personalized ad campaigns.
2. Better user experience
Browsing online means seeing ads. With behavioral targeting, you can create a better experience because users see fewer random ads, making their online journey more tailored to their interests.
3. Higher conversion rates
Since effective behavioral targeting delivers a marketing message based on the user’s interests, there’s a better chance they’ll click on an ad or make another purchase. Other options, like contextual targeting and location-based advertising, don’t tap into such data in nearly the same way.
4. Retargeting opportunities
Behavioral targeting makes retargeting more effective by allowing you to show relevant ads to past visitors—for example, showing ads for items they added to their shopping carts but didn’t purchase. Web tracking technology lets you target these users, reinforcing brand awareness and encouraging them to return and complete the purchase.
5. Greater return on investment
Advertising is expensive, and it’s fair to expect a return on investment (ROI) when you make a big ad spend. There are few more effective ways to leverage online data and target potential customers than behavioral targeted advertising.
This powerful marketing tool goes beyond showing ads on a particular site. You can repurpose the data collected from your campaign for other uses, such as email campaigns and direct mail, to get more bang for your buck.
How does behavioral targeting work?
- Data collection
- Segmentation and data analysis
- Serving ads to potential customers
- Adhering to privacy regulations
Here are the four steps of behavior targeting:
1. Data collection
Behavioral targeting begins with the collection of user data through various sources, such as IP addresses, mobile device data, and user login information. Individual websites and internet service providers (ISPs) both track user activity, amassing a trove of data that includes browsing history, clicks, time spent on pages, and interactions with content.
2. Segmentation and data analysis
Data management platforms (DMPs) and marketing automation systems analyze data with the goal of understanding customer behavior and predicting interest in products. At this point, ad networks may segment customers based on common behaviors, sorting them into specific groups. These groups will see similar ads.
3. Serving ads to potential customers
After analyzing the data, businesses deliver targeted advertising or use website personalization to show potential customers tailored content and ads, which can appear on websites, social media platforms, or mobile apps. The goal is to reach customers in the right stage of their buying process.
Typically, marketing automation systems serve ads without the need for human intervention.
4. Adhering to privacy regulations
Given the large volume of user data, behavioral targeting must comply with regulations like the General Data Protection Regulation (GDPR) in Europe or state-specific privacy laws in the US (the California Consumer Privacy Act is notably robust). This ensures that entities handle user data responsibly, protecting privacy and allowing users to control their personal data. Organizations must inform users about data collection practices and provide options for consent or opting out.
Behavioral targeting FAQ
What’s the difference between contextual targeting and behavioral targeting?
Contextual targeting delivers ads that match the content of the webpage a user is viewing, while behavioral targeting delivers ads based on a user’s past actions and online behavior.
What is an example of behavioral targeting?
For behavioral targeting examples, consider two scenarios: In one, a user who frequents fashion websites may receive ads for apparel or accessories on other sites they visit. In another, a customer who abandons their shopping cart on an ecommerce site may later see ads for the same products across different websites, encouraging them to complete the purchase.
Is behavioral targeting legal?
Yes, behavioral targeting is legal, but it must comply with data privacy laws like the General Data Protection Regulation (GDPR) in Europe and the California Consumer Privacy Act (CCPA) in the US, which require businesses to inform users about data collection and provide options for consent or opting out.
