Behavioral Targeting: Profiling or Perfecting User Experience

As the technology of tracking user behavior improves, advertisers and Web site publishers find they have access to more detailed information about the people who visit Web sites. Add to this the ability of Internet Service Providers (ISPs) to see where each of their users go online and you have very effective tools to make decisions on how best to market to them.

While the above paragraph may offer a simplistic and non-threatening view of behavioral targeting, a large group of people is very much against using behavioral targeting. To this group, such actions represent a gross invasion of privacy. This group has some famous and powerful members, including Sir Tim Berners-Lee. The topic has been discussed in front of Congress, the European Union, and the UK House of Parliament.

Berners-Lee spoke before Parliament this week "to raise awareness of the technical, legal and ethical implications of interception and profiling by ISPs in collaboration with behavioural targeting companies," the Register UK reported.

"It is very important that when click [sic” we click without a thought that a third party knows what we're clicking on," he said. "I have come here to defend the Internet as a medium."

With dissenters like that, it's a wonder companies are still trying to argue the case for the other side -- but let's try!

"At the heart of behavioral targeting is a learning-based investigation of consumer behaviors. It helps marketers understand consumers' purchase patterns over time, mapping out a customer's activities based not only on a single purchase but also on an annual or even lifetime basis." ClickZ reported nearly five years ago.

The gathering of information at the ISP level is the main area of content. We already have cookies that can follow people on a Web site or even a co-op of Web sites. The information is used to change ads and even the pages the people are presented. This is done to provide a better user experience for the visitor, as well as to market to them in a more effective manner.

The Federal Trade Commission released a report recently "for public comment a set of proposed principles ... designed to serve as the basis for industry self-regulatory efforts to address privacy concerns in this area."

Seems some groups are coming around. If Internet users are made aware of the use of their activity online and they agree, then there's no conflict. Could there come a time when Web access is paid for by ad networks in return for monitoring usage? Will free mobile telephone service be around the corner using such a model?

"Affirmative express consent" seems to be the new catchphrase, but it could soon be changed to "interest-based advertising" if Google has any influence. Wednesday they announced they were starting to beta test this "interest-based" advertising.

"We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching 'interest-based' advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest -- say sports, gardening, cars, pets -- with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads," Google announced on the official blog.

Are people willing to let Internet companies follow their online activities? According to TRUSTe -- an online privacy watchdog group founded by the Electronic Frontier Foundation (EFF) and the CommerceNet Consortium "to act as an independent, unbiased trust entity" -- more people are aware of behavioral targeting and are starting to be accepting.

"Behavioral tracking techniques represent the future in digital advertising, but as companies adapt to take advantage of these technologies, we are seeing some stumble as they struggle to provide transparency around privacy," said Colin O'Malley, VP of strategic business at TRUSTe. "The TRUSTe survey suggests that the more consumers understand these practices, the higher their comfort levels. Knowing this, TRUSTe invites the advertising industry to give its customers a newfound transparency into its tracking and profiling practices so that they may gain consumer trust and earn the right to continue to engage in behavioral advertising activities."

So as transparency becomes the norm and popular companies like Google approach their many users about providing a better user experience, behavioral targeting could possibly be an integral part of your Web experience soon.

Without a doubt, behavioral targeting helps advertisers improve their conversion numbers, but it may also show Web site visitors ads that they may actually want to see. Using the information to offer better deals for things I'm interested in would work for me.

Chris Boggs Fires Back

Frank, this is certainly a very controversial topic. I assume next week we'll be covering stem cell research and its implications on keeping search marketers healthier?

In all seriousness though, advanced marketers have been leveraging behavioral targeting for a long time. We aren't talking about a shift in the advertising paradigm here -- just increased technology that can make this happen on a much more real-time basis. Frankly, if behavioral targeting isn't already part of your target market's Web experience already, then you're behind your competitors, especially at the Fortune 500 level.

The TRUSTe survey findings certainly show a willingness of the "general public" to submit to monitoring and enhanced content delivery. Google is very clear in their blog post in defining the three pillars of privacy safety: transparency, choice, and control.

The control is something they have given many folks in the past that choose to download the Google Toolbar. Their Toolbar Privacy Notice clearly delineates the amount of information they monitor, based on your use of advanced features as described in the "Optional Toolbar Features" section.

The new system, according to a quick view of the wrapper, will provide similar control, but give Google a much larger sample than their current toolbar population. CNET's download.com reports that the Google toolbar is the second most downloaded Internet Explorer add-on/plugin. Although only a fraction of the total downloads, obviously many people have downloaded this tool. Yet comparatively speaking, additional monitoring of those without the toolbar has to provide far deeper insight into segmented behaviors.

See John Andrews' post for a good explanation of the way that Google will try to block cookie blockers, in order to help this information sample grow.

One problem that will probably continue is for people like us who spend the days and weeks researching different industries. I know that my cookies must feel like I'm a great target for an insurance product, for example, but it's hard to beat USAA. It would be helpful if the system would allow for an "on-off" switch, in order to help me help the technology feed me the stuff I really want to see.

Kevin Newcomb Fires Back

Behavioral targeting in theory is great for users, advertisers and publishers. Users get more relevant ads, advertisers reach the right customers, and publishers earn more from showing relevant ads on their sites that get clicked. It's wonderful...in theory.

In reality, it's a bit muddier. Users get creeped out when they see ads that are unrelated to the site they're on, but obviously targeted to them in some way. You can explain to them all day long about not using "personally identifiable information," but you'll never convince some people that you can target them based on their behavior without following them around, keeping track of who they are and what they're doing. It just feels like an invasion of privacy.

Advertisers don't always get the ideal return they expect, since part of the formula is missing. Advertising is about showing the right message to the right person at the right time. Behavioral targeting has the first two elements, but it's missing the element of time. Just because a user is an avid camper doesn't mean they're interested in an offer from a sporting goods store while they're looking for a recipe for tonight's dinner. Behavioral targeting lacks the beauty of search advertising, which captures users in the midst of a conversion funnel, or of contextual advertising, which at least catches users when they are thinking about a certain topic.

Publishers suffer from both of the above issues. They get blamed for stalking their users, even though it's the ad network doing it, and not the site itself. They also lose money by showing ads on their site that get poor clickthrough rates.

There are plenty of examples where behaviorally targeted ads have been successful. But there are just as many where they have not. Advertisers need to be cautious in the way they implement these ads, and be diligent in tracking their performance. Google and other providers also need to work on educating users about the technology to allay privacy concerns, and work with publishers to make sure these new ads are not adversely affecting their revenues.

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About the author

Frank Watson has been involved with the Web since it started. For the past five years, he headed SEM for FXCM -- at one time one of the top 25 spenders with AdWords. He has worked with most of the major analytics companies and pioneered the ability to tie online marketing with offline conversion.

He has now started his own marketing agency, Kangamurra Media. This new venture will keep him busy when he is not editing the Search Engine Watch forums, blogging at a number of authoritative sites, and developing some interesting online community sites.

He was one of the first 100 AdWords Professionals, a Yahoo and Overture Ambassador, and a member or mod of many of the industry forums. He is also on the Click Quality Council and has worked hard to diminish click fraud.