Before the advent of behavioral targeting, it was hard to predict the success of an advertising campaign. Companies would create ads and marketing messages that failed for no apparent reason. This was due to marketers failing to display relevant ads that appealed to the interests of potential customers.

The development of web tracking technology made it possible to track the web browsing behavior of individual users. This resulted in the birth of behavioral targeting.

Behavioral targeting led to the use of personalized ads. This was done by pairing user contact data with real-time info about the online behavioral data of individual users on websites and apps.

This article will define behavioral targeting, discuss its benefits, and explain how it works.

What Is Behavioral Targeting?

The behavioral targeting process utilizes third-party cookies and tracking pixels. It involves displaying relevant content based on a customer’s online footprint. This means that the type of marketing messages a customer sees depends on their internet activity.

Behavioral targeting makes online advertising a flexible process. For example, two visitors may be using a particular site, yet they both are shown completely different ads. This is because behavioral targeting operates based on an individual’s behavioral data. Such data may include:

• What users are doing in an app or website
• What users are not doing in an app or website
• How users interact with ad campaigns on various web pages, etc.

This is the kind of behavioral data that is at the heart of personalized marketing. This type of data hints at a user’s purchase intent and helps to drive engagement. Such data helps you to speak directly to prospects that are more likely to want your goods and services. 

Essentially, behavioral advertising depends on the user’s online behaviors, such as:

Most-Visited Web Pages

A users’ interests may be discerned by knowing what websites they return to the most.

Page Dwell Times

The time spent on a particular site is a good indication of how absorbed the user is with the site content.

Ad and Link Clicks

The ads and links users click are good indicators that they may be interested in similar topics or products. Such behavioral tracking enables advertisers to leverage targeted ads.

Web Search Queries

Collecting information about what users search for online can reveal much about their purchase intent. User search behavior-tracking gets your goods and services in front of potential customers.

Especially in the late stages of the marketing funnel. For example, If a user googles a solution to a problem and your product is a good fit, your marketing message will be displayed.

Website Interactions

It’s important to harvest data about which types of content on your platform fosters higher engagement.

Do your users interact more with videos vs the other data content of your site or app? Rich media, perhaps? Tracking user to platform interactions will tell you how to approach website personalization.

Purchase Histories

Tracking a user’s purchase history is a great way to generate leads. This is because knowing what a customer previously bought is a good way to identify their interests. This is particularly beneficial for E-commerce companies.

With behavioral targeting, marketers have access to a wealth of consumer data. This data is used to drive traffic via personalized ads and an improved user experience.

Behavioral targeting empowers publishers and advertisers to create new business in multiple ways. For example, a customer searches Amazon for mobile devices but does not make a purchase.

When this customer visits other websites, Amazon’s advertising network will show ads for mobile devices. This increases the likelihood of the customer taking the desired action.

What Are the Benefits of Behavioral Marketing?

Before behavioral targeting, digital advertisers relied solely on contextual targeting. This is where customers would see ads related to the keywords and topic of a site. For instance, a kitchen knife ad on a cooking website.

Contextual targeting is still useful. But, successful behavioral targeting is much more powerful. It boosts the user experience of a website or app, which adds to customer loyalty.

Behavioral targeting may be data-focused, but it’s better than the abstract number systems used in some industries. Focusing a campaign on targeting behavioral patterns, benefits the customer and the advertiser.

Here are a few of the benefits of behavioral advertising.

Customer Re-Engagement

Behavioral targeting helps companies to reconnect with visitors that have abandoned their site. This is called re-engagement.

Behavioral targeting maps the user’s previous on-site interactions with products and services. To reinstate the relationship, personalized content is marketed to the user on different sites.

Personalized Advertising

Behavioral marketing makes for tailored or personalized advertising. This means companies can advertise to users based on their online activity. This increases the customer experience and the sales of the company.

Caution must be exercised to prevent ads from looking like an invasion of privacy, as this could hurt sales. For example, an ad that mentions a user’s wedding plans may appear overly personalized. This could make a customer feel like someone is collecting information they shouldn’t have.

Higher Number of Ad Click-Throughs

Behavioral targeting gets consumers to click on your ads by making them relevant. Personalized/ relevant ads capture the viewer’s attention much more than generic ads do. This helps to move them along the purchasing pipeline.

Initiate Long-lasting Communications

Behavioral targeting enables the engagement of specific segments of your audience. For instance, you may create newsletters for visitors from a specific country.

To gain their trust, let them take a look inside the newsletter and invite them to subscribe to the service. This approach initiates long-lasting communication with more consumers from your target audience.

Building Trust Through Retargeting

This involves the targeted advertising of goods repeatedly across various websites. This is based on the Rule of Seven marketing principle.

This principle states that prospective customers need to see a product ad 6-8 times before they buy. Such repeated exposure builds familiarity, familiarity builds trust, and trust drives conversions.

Bait Indecisive Prospects

Some consumers may indecisively browse through your site’s product offerings. Behavioral targeting helps to hook them via discounts, incentives, and personalized product offerings.

Improved Profits

Behavioral targeting results in higher profits, sales, and repeat customers for companies. Personalized recommendations increase the chance of consumers requesting more information about products.

Improved Metrics for Advertisers

Behavioral targeting helps make ads more interesting, relevant, and personalized. This leads to greater consumer satisfaction, which in turn, increases the CTR, conversion rates, and the ROI of the advertiser.

Improved Ad Experiences

Consumers don’t like when companies have their personal data. But, when surveyed they indicate a dislike for generic ads. Behavioral targeting helps marketers build detailed profiles about users. This ensures only relevant emails and ads are forwarded to consumers.

More Efficient Online Shopping Process

When consumers see online product ads that suit their needs and click them, they are redirected to online storefronts. From there the item can be added to the cart with only a few simple clicks.

Increased Exposure To New Products

Behavioral targeting helps to promote new products. New products that relate to the consumer’s browsing history will be included in the personalized ads he/she sees.

The shopping experience is improved when consumers can get access to the latest versions of products at the right moment. This impacts the marketer’s profits, website traffic, and popularity. 

How Behavioral Targeting Works

How does behavioral targeting work? The behavioral targeting process involves 4 steps to create a personalized ad experience. These include:

Collecting Consumer Data

• The first step in making behavioral targeting work is collecting consumer data. This can be done by collecting cookies about a user’s online patterns. Cookies are collected when a user visits a new site or sets up an online profile. Cookies are either stored temporarily on the user’s memory drive or permanently on their hard drive.

• Apart from data collected by DMPs and other AdTech platforms, data is also collected from registered user profiles. When registered users purchase from an online store, their purchase and site navigation history are stored by the vendor.

• A third way to collect and track consumer data is by Internet service providers (ISPs). These may perform deep packet inspections to identify the websites visited by registered users.

Creating Detailed Profiles

• Step 2 involves creating a big data/ personal profile for each user. These profiles include cookies and other data that map a consumer’s viewing history and online actions. This gives marketers insight into the user’s interests and shopping habits.

Segmentation

• Step 3 is about sorting users into categories based on their data profiles. Consumers may be segmented into groups like:

• Frequent travelers
• Antique lovers
• Shoppers who frequent a specific product category, etc.

This step enables websites to determine which ads to show different audience segments.

Application Of Collected Data

• At this stage, targeted advertising campaigns are developed and implemented. This is what causes relevant content to reach online users.

What Kind Of Consumer Data Are Data Management Platforms Allowed To Collect?

There are many sources from which consumer data can be collected. These include:

• Mobile apps
• Websites
• CRM systems, etc.

There are four types of consumer info that data management platforms can collect.

Website Cookie Data

This is data on how visitors interact with websites. A wealth of information can be collected as visitors spend time browsing a site. This includes:

• Pages visited
• Duration spent
• Country/ region

Website cookie data provides insights that are useful in boosting marketing success rates.

Mobile Device Data

Mobile devices are the most popular gadgets for accessing apps and sites. This makes cookies stored on these devices are invaluable to tracking consumer behavior. A mobile device provides critical data about a user’s:

• Communications
• Activities
• Mobile purchases
• Search and navigation history
• Social media clicks
• Check-ins, etc.

Geographic Location

Identifying where consumers come from is important to delivering relevant ads. DMPs are useful for recording and identify where a visitor’s IP address is from.

Demographics

In behavioral targeting, DMPs and other marketing programs collect demographic segmentation data, like:

• Gender
• Age ranges
• Interests, etc.

This information is used to create more personalized campaigns. Successful behavioral targeting relies on a quality data management platform to gather data.

Behavioral Targeting VS Contextual Targeting

What are the differences between behavioral targeting and contextual targeting?

Contextual targeting only shows users, ads that relate to the content of the site they’re on. This method does not take customer information into account. This means the ads visitors see may not always be relevant to their interests.

Behavioral Targeting shows users ads that fit their interests regardless of the content of the website they are on. When it comes to ad relevance and user experience, behavioral targeting is superior to contextual targeting.

Behavioral advertising’s only downside is that it requires investing in a reputable DMP for data collection. But, contextual and behavioral targeting aren’t completely exclusive. Behavioral targeting can be used to improve contextual targeting ads.

Ending thoughts on the importance of behavioral targeting

Behavior-targeted ads improve a company’s ROI, click-through, and conversion rates. Today, behavioral targeting is critical to a company’s marketing success.

Overusing a customer’s personal information is risky. But, this doesn’t hinder the effectiveness of behavioral targeting.

If you leverage the behavioral targeting principle, you will attract and secure your customers. So, use a reputable data management platform to collect behavioral data and segment your audience. By doing this, you will reap increased profits and conversion rates on your onsite and offsite marketing campaigns.

If you enjoyed reading this article on behavioral targeting, you should check out this one about personalization algorithms.

We also wrote about a few related subjects like MVP tests, how to hire a web development team, software development budget, financial projections for startups, financial software development companies, proof of concept vs prototype, and lean software development principles.

The post What Is Behavioral Targeting, How It Works, And Why It’s Important appeared first on TMS.

The advertising industry is built on technology. Advertising campaigns integrate marketing technology every step of the way.

It plays a key role from design to deployment.

More customers are going online every day. Advertising technology, or AdTech, is more important than ever before.

The concept of advertising technology has been in use for a while. But in recent years its importance has grown.

Savvy ad agencies are quickly realizing they must include AdTech or die.

In this information age, businesses must have partnerships with AdTech companies. Digital advertising efforts make them far more attractive to their target audiences.

To fill that demand, ad agencies have learned how to utilize customer data. They make their resources count, getting the most bang for their buck.

More and more companies are seeing the value and investing in AdTech.

But what is AdTech? How can it work for your business?

This article will make you an expert on advertising technology.

What is AdTech?

To use AdTech effectively, one must thoroughly understand it.

Advertising Technology refers to software, programs, or tools used in digital advertising efforts. AdTech software targets, delivers, or analyzes data to make digital marketing successful.

AdTech includes the entire ad campaign process. Even selecting the topic of an ad and its target audience is part of AdTech.

AdTech solutions help to maximize the results of ad campaigns. They do this through data.

Knowledge is power. AdTech gives businesses the knowledge they need to see the big picture related to an ad campaign.

This bird’s-eye view is possible because AdTechnology makes daily tasks more efficient. It optimizes targeting audiences, delivering campaigns, and studying feedback.

There are no active processes that AdTech cannot boost. Whatever ad space is being used, AdTech will enhance it.

You may have heard about two common methods used by the AdTech industry. These are programmatic advertising and omnichannel marketing.

There are other online advertising tools, but these are the most critical to know. To better understand AdTech solutions, one needs to understand these two terms.

• Programmatic advertising specifically reaches target audiences. This is unlike traditional methods of advertising, like billboards or TV commercials.

Programmatic media buying ensures that money isn’t wasted. It only advertises to customers who don’t fit the target demographic.

• Omnichannel marketing uses all forms of technology to reach customers. This marketing strategy includes mobile, video, desktop, and more.

It analyzes how customers have interacted with the brand. No matter their methods, digital advertising will reach them.

The company and AdTech campaign must be in sync. If the company’s objectives don’t match the methods, it will not succeed.

The algorithms used to manage advertising campaigns are flexible. They are customizable and change to meet the needs of each individual campaign.

This means data collection comes into play quicker. The business can then reap the benefits.

The AdTech Ecosystem

AdTech Ecosystem (or AdTech Landscape) is a piece of terminology even broader than AdTech. It includes all AdTech solutions, industry players, and the connections between them.

Its strength lies in finding the right data. With enough data, it can personalize ads to suit each customer.

The more data available the more effective and engaging marketing strategies become. Having found the most efficient advertising content, the AdTech ecosystem allows it to be tested and scaled effortlessly.

The AdTech landscape makes a loop of advertising supply and revenue-generating demands. It builds this loop on finding and examining user data activity.

Here are the critical components to a good AdTech landscape:

Ad Server

The ad server’s role is to deliver ads to publishers’ websites. Its vital role is evident by how much of the AdTech industry uses it.

Publishers, advertisers, ad networks, and even ad agencies all rely on ad servers. It is a key part of their content delivery network.

Demand Side Platforms (DSP)

These help users to purchase inventory from ad exchanges and supply-side platforms (SSP). They use a custom-designed user interface for the task.

DSPs are critical for any real-time bidding (RTB). During RTB the DSP acts as a receiver for browser ad requests.

Supply Side Platforms (SSP)

Publishers often sell ad space directly, but there is often leftover space. This leftover space is often called remnant inventory.

SSPs automatically sell these remnants to DSPs in the programmatic ecosystem.

Agency Trading Desk (ATD)

ATDs are a collection of tools from media agencies. Their purpose is to improve planning, buying, and managing advertisements.

It’s best to think of them as a simplified DSP. They handle some of the same responsibilities.

Agency Trading Desks are a good option for anyone who can’t yet invest in a DSP or in-house team.

Ad Exchange

During real-time bidding, the ad exchange acts as the link between buyer and seller. Large AdTech providers use them to match a demand-side platform to a supply-side platform.

Advertisers and publishers can’t expect to have direct access to an ad exchange. Still, their ad inventory will usually pass through ad exchanges.

Data Management Platform (DMP)

In the digital advertising industry, these platforms are warehouses. They store third-party data on users.

Not only that, but they can cross-reference it with databases in SSPs and DSPs. This results in a high-quality user profile.

These profiles then inform targeted ad campaigns.

Customer Data Platform (CDP)

CDPs are similar to DMP, but they are not limited to only third-party data. They also collect first-party data, which is data provided by consent from the user.

This information is also called PII (Personally Identifiable Information). Using PII, the CDP creates individual customer biographies.

Information includes known name, company, email, etc.

Inventory and Ad Quality Scanning Tools

These tools ensure that data security is maintained. They also help to address any unwanted themes before they hit a marketing campaign.

This safeguards the reputation of the companies involved.

Why Is User Data Important For AdTech?

AdTech can only be successful if there is enough relevant data.

Digital advertising can be expensive. So you’ll want to make sure any investment made returns the desired results.

To make sure of that, it’s necessary to first have the data to make ad targeting count. This is a demanding process that requires logistic and technical skills.

That’s where AdTech companies come in. They can leverage their powerful collection of data for your ad placements.

They’ll focus advertising messages to reach only the users who are most interested.

A great supplier is aware of its audience. They are well versed in their customer’s behaviors and interests.

Third-party data vendors enable advertisers to purchase ever more accurate advertisements. The right ad makes it to the right audience.

To do this, SSPs gather and analyze data from your digital channel visitors. The number one source of data in the entire AdTech economy is the customer.

The consumers themselves don’t need to do anything special. They go about their business on a site.

Behind the scenes, algorithms collect, save, and examine the customer’s behavior while there. Collection of data occurs in two ways:

• First-party – You collect the data yourself
• Third-party – You buy the data from someone else

Real data taken from real people allows the best possible product delivery.

It also facilitates exact ad targeting. The ad is therefore shown to those who definitely want to see it.

This ensures the best possible ad revenue results.

Does AdTech Cost Money or Make Money?

The 21st century is an ever growing digital age. The consumer is spending more and more time online and using digital media.

AdTech is the best way to monetize that increased traffic. It increases user engagement with an ad on all platforms.

The AdTech solution can transform a business’s current customers into more profit. It also puts them ahead of competitors who refuse to adapt to new technologies.

Advertising technology is money-generating by nature. It has a proven method of monetizing.

Every party involved can take a cut and come away with a profit. Still, nothing is foolproof.

AdTech isn’t something that one can jump into without preparation. It is costly to begin and requires extensive technical skills.

There is a huge amount of data and computing involved. The reason for AdTech’s success is the clear distribution of responsibilities.

This balance between players was one of the key innovations brought about by AdTech. There are three major players:

• Advertisers – Owners of the advertisements themselves. DSPs are the middle man between advertisers and the Ad Exchange.
• Publishers – Owners of the space for the advertisements (ad inventory). SSPs are the middle man between the publishers and the Ad Exchange.
• Ad Exchanges – The mediator between advertisers and publishers. The Ad Exchange uses both DSPs and SSPs to communicate with all parties involved.

Their goal is to connect advertisers and publishers.

Business models and monetization types vary in each situation. Regardless, all three parties share fees. The system is mutually beneficial for everyone involved.

Some of the most used monetization models include:

• Cost Per Impression (CPI) – Advertisers only pay when customers click on an ad.
• Cost Per Action (CPA) – The basis of this advertising cost is user actions. Two examples are:
• Cost Per Sale (CPS) – Payment is given for each sale.
• Cost Per Click (CPC) – This is a risk-sharing method. Typically it’s used for context-based content.
• Cost Per Lead (CPL) – Ad content is brought into contact with users. Payment occurs for each lead made.

Reasons Why AdTech Matters to Digital Advertising

AdTech’s value is critical for all parties involved. Ad agencies or businesses looking for an advertiser must understand why it matters.

Only then can it be properly explained to potential clients and decision-makers. Here are six major reasons why AdTech is necessary:

Measures Performance

When a marketer is almost ready to launch their campaign, they must first check and test it.

To make an informed conclusion about their campaign, they need the right data. Numbers like impressions, conversions, click-through rates, and more are key.

No piece of data is useful unless it’s been carefully analyzed and attributed. Only then will it contribute to the campaign’s success.

Demand-side platforms report this information in real-time. All the data is available in the same interface for analysis at any time.

Targeted Advertising

AdTech allows something that was once only a dream for advertisers in the past.

Advertisers can deliver ads directly to the target audience. Not only that but the ad placement can have perfect timing and context.

Marketers save resources and effort. Publishers can monetize their assets.

In turn, consumers receive the promotions that make the most sense for them.

User Tracking Between Devices

90 percent of users start a task on one device and then finish it on another. It’s difficult for advertisers to keep track of these users.

This is especially so if it is a shared device. AdTech platforms solve this problem with user data.

It allows a business to understand its target audience. It can even tell the individual users apart.

With this understanding, advertising and marketing campaigns succeed. No matter what device the user may be using.

Optimizes Bids For Maximum ROI

No matter where you buy ad space it’s critical to monitor the situation. It’s important to know how the campaign is performing to know what the return on investment is.

An ongoing campaign that is not monitored may cut into the campaign’s return. As a result, the company’s bottom line will suffer.

Using advertising technology can automate this process. Businesses can use AdTechnology to improve their bids.

This type of technology gets rid of time-consuming work. It also increases the return on investment (ROI) and will generate revenue.

This added ROI can free up company resources for digital marketing, video advertising efforts, and more.

Omnichannel Marketing

This is a new kind of marketing strategy. It uses many different channels to encourage interaction between brands and potential customers.

This variety of marketing is seamless. It creates a unified experience for users across all channels.

Their advertising experience will match offline and online. Stores, websites, and social media platforms are all used.

Omnichannel campaigns use many different kinds of devices to advertise to the user.

As an example, a promo code from a TV ad can be downloaded from a mobile app. This method creates a strong brand image no matter how the customer interacts with it.

Ending thoughts on what is Adtech?

Advertising technology is expanding at a breakneck pace. There’s no evidence it will slow down.

It has changed ad campaign targeting forever. As it continues growing, ad agencies must take advantage of these new opportunities.

AdTech’s success is due to the array of tools that work together to make a single, powerful framework. It uses automation and cooperating processes to increase the effectiveness of audience targeting.

More than ever before, it’s possible to accurately deliver ads.

Adtech isn’t magical. It all comes down to knowledge and the skill to use it, which you now have from this guide.

If you enjoyed reading this article on what is AdTech, you should check out this one about proof of concept vs prototype.

We also wrote about a few related subjects like how to hire a web development team, software development budget, financial software development companies, software development outsourcing trends, business pivot examples, and lean software development principles.

The post What is AdTech and Why It’s Important For Agencies appeared first on TMS.