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This past week Joel Stein of TIME Magazine published a examination of his research on behavioral targeting technology. In his self-discovery of the various categories for which data mining companies categorize his behavior into, he makes a significant distinction that consumers are not fully aware of the difference between tracking and sharing. The current state of the internet has reached a critical juncture that is dividing the people into two groups: collective groups advocating for anonymous identity and shameless individuals calling for their unique recognition on the web. The former is pushing for an internet that remains similar in principle to the original internet communities which were based on anonymous experimentation and discovery. The latter is a contingency of believers of paramount personal integrity and developing new technologies to make the internet a more efficient and  relevant experience.

So what does this have to do with ad planning?

The early days of internet marketing were largely based off of mere arbitrage on advertising inventory. Finding success in this strategy is highly unlikely on any advertising platform today.  Over the past few years the tide has turned in online advertising from mass amounts of cheap traffic to smaller bits of high quality traffic. The most problematic area of the push for behavioral targeting is the data that makes assumptions about each user. Consumers are clumped into categories of likes and dislikes. How can a system that makes assumptions based upon your browser activity really grasp your human behavior. The answer is that they can not (yet) even come close. We are people, not behavioral data. As Joel Stein, the author of the TIME article pointed out, the data mining trackers are often wrong about our seemingly interesting lives. If you’d like to challenge the claims made by sales reps of behavioral targeting agencies, test them for yourself. Does their data on your own profile match what they are selling?

In a browser filled with ads that often seem eerily creepy due to the awkward ad servings, many users have reported that they feel their privacy is being invaded. The result is a browsing experience that displays ads completely irrelevant to the content displayed on the page, and thus even more distracting. So how can advertisers combat this psychological user experience battle? A number of options still remain the core producers of quality traffic.

• Paid search:  The best performing form of online advertising, even since the inception of Google Adwords.
  • Why? Consumers are actively seeking to buy your product or service.
• Contextual ads:  The text ads are highly relevant to the content on the page.
  • Why? The visitors clicking on your ad are already interested in learning more about your product.

There is one segment of behavioral targeting that does consistently outperform almost every form of internet advertising: Re-targeting. The real substance of behavioral marketing follows the notion that an advertiser can more efficiently reach more customers by marketing to people who have proven to partake in activity related to the product or service being advertised. In the most direct relationship between advertiser and customer, this means that the customer has previously visited the advertiser’s website.

98% of visitors to any given eCommerce site do not convert. Re-targeting aims to capture a significant chunk of the remaining 98% of users and convert them through a targeted sales funnel. Industry statistics have shown that re-targeting outperforms traditional media buying by 10x.  The cost of re-targeting inventory may only be 2-3x cost of traditional behavioral inventory, but the cost is well worth the reward.

In the universe of behavioral marketing strategies, retargeting is a great way to cost efficiently capitalize on each and every site visitor. Your search marketing, banner ads and offline efforts will do some of the work, while retargeting will finish the job– converting browsers into buyers, buyers into repeat buyers and repeat buyers into life-long, loyal customers. – imediaconnection

– Learn more about interest based advertising and the companies tailoring ads based on your browsing activity.