The Future of Online Behavioral Targeting

Josh GordonLast Friday The Lunch Pail's newest contributor did a good job explaining some of the nuances of online behavioral targeting – specifically the differences between network targeting and onsite targeting. These two vastly different applications of tracking technologies are important to understand both morally and tactically. The Senate Commerce Committee is currently debating possible resolutions to the moral issue of protecting consumer privacy on the Internet. I'll address the details of that debate in a future post. For now, let's set aside the obvious moral quandary that shrouds this topic and skim the surface on the business viability of network behavioral targeting.

There are some business questions surrounding the implementation of network behavioral targeting. Does network consumer targeting offer worthwhile data to build a long-term picture of individual consumer behavior? This is a complex question because many factors go into shaping an individual consumer’s online persona. There are some key unanswered questions that introduce too many wild cards into network consumer targeting – questions without a simple answer and without technology capable of addressing them.

Here’s a few:

  • Does tracking of consumer behavior over a network give a complete understanding of an individual consumer? In a word, no. What if a consumer searches for a gag gift, or let’s a friend search something on their computer? Is their persona instantly, irrevocably reshaped and rendered inaccurate?
  • Are consumers allowed to shift their interests? Gas is more expensive right now. Consumers are cutting back, but they’re still receiving ads deemed worthy according to their previous spending levels and corresponding online behavior. Is that using the technology to better communicate with the consumer?
  • Does the technology identify a community computer from a personal one? Tracking is completely useless in computer labs, cyber-cafés, etc.
  • If a family of 6 all uses the same computer, isn’t the created profile compromised for targeting purposes? Six different likes and dislikes from user to user is not something network level targeting can distinguish.

All of these questions help reinforce the notion that targeting within a domain is a more viable business practice now and in the future. There’s nothing wrong with a specific business remembering something about a specific customer. In fact, that’s a company trait most consumers welcome, off-line. My favorite stores are the ones where I hear “Hey, Josh, what’s new” when I walk in. Domain-level targeting is currently the best way to replicate that community level interaction online.

The future of online behavioral targeting, regardless of niche, likely boils down to two basic, general principles. Consumers don’t want someone following them around from store to store; but they don’t mind a personal greeting when they walk in.

2 Comments

  1. Posted July 23, 2008 at 6:37 pm | Permalink

    Great post. This is an issue every website with personalization or remarking of any sort needs to pay attention to. Lately I’ve begun to enjoy “guessing” what Amazon and a few other sites I shop with will recommend to me on every visit. After years of purchasing behavior, most of which was gifts clearly shipped to other people, or items for a hobby long since past, they’ve lost any idea of how to effectively target me and now offer items I have no interest in what so ever.

    My take is that the solutions to addressing the pitfalls personalization have yet to emerge in any perfect form but the pioneers will be those companies which ask more of their customers. Those that actually go out and get information can make the right decisions while those that try to assume everything about purchases and transactions end up making too many assumptions to be accurate and when you are accurate you can create a truly connected feeling. Like you said, you can greet the person when they walk in your store, or click to your website, and greet them properly.

  2. Posted July 23, 2008 at 10:10 pm | Permalink

    Hi Ted, thanks for the insightful comment. I really enjoyed your description of guessing what Amazon will suggest next. I think there’s a game in there somewhere!

    The most elaborate software is only as good as the information it’s programmed to capture. I agree that conceiving of and extracting new bits of information from the consumer is an engaging practice that reinforces brand loyalty because the company is trying to understand the consumer, not just push their product on them.

    Thanks again for the comment.


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  1. […] Targeting – The Debate In a previous post I discussed the business questions that persist around network behavioral targeting, and alluded to the moral debate surrounding the issue. The moral debate on behavioral targeting in […]

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