Masterclass on behavioural targeting

Revolution

01/02/2007

Behavioural targeting was one of last year's hot topics. But, how can advertisers use it to their advantage? Danielle Long reports.

It's every marketer's dream: the ability to send relevant ads to consumers based on what they actually do, as opposed to what they say they do. With behavioural targeting, marketers can track their customers' activities so they can deliver them the right message at the right time and in the right place.

It's little wonder then that the industry is experiencing strong growth. US resource Emarketer estimated that marketers will spend $1.5 billion (£775 million) on behaviourally-targeted campaigns in 2007 and $2.1 billion (£1.5 million) by the end of 2008.

Figures from Forrester's Marketing Panel Online Study reveal that 74 per cent of marketers are using or plan to use behavioural targeting, while Jupiter Research reports that 71 per cent are using it for brand purposes and a further 56 per cent are using it for search. What's more, nearly 65 per cent of interactive agencies are currently using behavioural targeting for online activity.

Behavioural targeting was the hot topic of 2006 following the arrival of new entrants into the UK market, such as BlueLithium and Revenue Science, and the strong pushes made by firms like DoubleClick, Advertising.com and 24/7 Real Media.

TAKING OFF
"Behavioural targeting is really taking off in a big way," says Richard Foster, managing director of behavioural-targeting specialist Revenue Science. "Most of the agencies have booked multiple behavioural campaigns through the publishers we work with and there are a lot of sales networks coming to the market offering behavioural targeting."

Yet, it is important to note that, as behavioural targeting becomes popular, different models are emerging. There are the simple models, which monitor a single customer action and then serve those customers an ad based on that behaviour within a specific timeframe. This sort of behavioural targeting, often called re-targeting, lets advertisers monitor users' behaviour and the way they interact with ads to serve relevant messages.

Foster explains: "Let's say you go to a financial web site, which is part of a sales network portfolio, and you look at content that is related to mortgages. You will then be defined as an active mortgage seeker and that sales network will serve you a mortgage-related ad campaign anywhere that you might go within that sales network. It's a very efficient way of re-targeting users, based on expressed areas of interest, so it's great for hitting people with a very targeted message."
The re-targeting model is offered by a number of ad networks and sales houses as the technology can tag the user's behaviour and re-target them across its portfolio of web sites. Mark Creighton, managing director of i-level, believes this method is great for marketers because "it is handled automatically by the server. This means they can easily target users by their behaviour, irrelevant of which site the user is on."

COMPLEX TARGETING
There are also more comprehensive behavioural targeting models that look for consumer behaviour on a larger scale, including search and click-through rates combined with 'recency' data - how recently the consumer has displayed a type of behaviour and purchase-cycle knowledge to determine their point in that cycle.
This, more complex, targeting involves working with media owners to understand the content that people have looked at over a specified period of time and then purchasing a specific audience based on those interests.
Creighton explains: "For example, you want an audience that has looked at mobiles in the last 30 days, so data is collected via cookie technology from a site such as The Guardian, which will be able to tell you that, say, 15,000 people were cookie-targeted for that behaviour. You can then target this audience by their behaviour and serve ads for mobiles or mobile phone accessories.

"That is quite exciting as it means we can align clients' and customers' segments. We can create groups of people that brands really want to target and are interested in, and get them to purchase their product."
For Paul Fitzpatrick, digital marketing manager at General Motors UK, behavioural targeting offers great opportunities to reach customers in places where the brand might not normally have advertised. GM has worked with companies such as Advertising.com and BlueLithium to run marketing campaigns that re-target people who have seen a GM brand message on the internet.

"If we pick up a person who has seen an ad on WhatCar, then we will know it's someone who is interested in buying a car as you only go to that site to read reports on cars. If that person then turns up anywhere on the BlueLithium or Advertising.com networks, we know it would be worth serving them a car ad because we know they are interested in buying a car, but, otherwise, we probably wouldn't bother," says Fitzpatrick.

"Where I think behavioural targeting is really interesting is to tag our own sites, so that when someone visits one of our sites, such as Vauxhall.co.uk, and they then wander off around the internet, we will know they've been to our web site, so why not serve them Vauxhall ads and effectively chase them round the web?

"We know they have already expressed an interest in Vauxhall, otherwise why did they visit the site? But, they might not have done anything. They may have researched a car, but they might not have ordered a brochure or test-drive. So, for us, the idea is to try to lure them back in to see if we can push them that step further," adds Fitzpatrick.
Behavioural targeting gives marketers an insight into their customers' interests and needs. A customer who has visited the brand site or a car information site is actively involved in the process of purchasing a car. By employing behavioural targeting, marketers can see how often that person visited the sites, which would help to determine their position in the buying cycle, and they could be targeted accordingly.

Foster says there are three key factors for this sort of targeting: passion points, recency and intensity. In other words, targeting based on people's passions and interests, and their engagement level. By recording which web sites they visit, how often, and the content they view on them, marketers can gain "a powerful indicator" of consumers' behaviour.

AVOID WASTAGE
"Our model allows advertisers to adjust the levels of passion. For example, we will track all user behaviour on a rolling 12-week basis, so we can adjust this timing to avoid wastage to users who may have already bought a product, so the messages will no longer be relevant. We can also see how engaged they were by the number of pages of content they read. Obviously, as you increase the number of pages viewed, they become more valuable."

All this data can be passed to a specialist such as Revenue Science, which can use it to target particular audiences and sectors more effectively.

"You then begin to get a sense of the universe that you can actually purchase and you can target on that basis. It's about using the information on the groups you want to get to formulate those universes with a media supplier," says Creighton.
Ensuring media and creative agencies are working together is key to a successful behavioural-targeting campaign. "You've got to understand what creative message you are going to deliver. It's very important to get the creative and media strategy together, so you know what message you will show at what point in time," says Creighton.

GM uses both brand (predominantly rich media) and tactical ads (deal-based with a call-to-action) across all of its behavioural targeting campaigns.

"One area where it seemed to work well was if we picked up a person on a site like the Sky Sports football channel where they saw a Vectra brand ad, and when that person appeared somewhere on the BlueLithium network we would back it up with another brand ad, and then a tactical ad message for Vectra, which contained a price deal or a call to action," says Fitzpatrick.

He is keen to point out that GM is "still figuring out how best we can use behavioural targeting", and says the process of working out which ads to serve and in what order is difficult. He says another tricky area can be the budget as issues can arise from the need to create more executions for behavioural-targeting campaigns.
However, Fitzpatrick believes marketers can avoid problems by knowing their objective before embarking on a campaign. "Make sure you know why you're doing it first. Don't do it just because everyone says you should. Knowing what you want to get out of it is the most important thing."

He thinks marketers should allocate a portion of budget to behavioural targeting and see what works. "Start small and put a little bit of your budget aside to work with a behavioural targeting expert. Then you know a certain per cent of all impressions will be served to people who demonstrated certain behavioural criteria and you can see if those people worked any better than the larger campaign."

Foster believes marketers need to know exactly who they want to target before beginning a campaign, and the behavioural targeting process should start by identifying the target audience.

He says: "Take a look at the profile of the typical audience buying your product. Don't discount the demographic stuff, but certainly look at the psychographic stuff: what are they doing?; where are there going?; what are their passions? That's going to give you a better feel for how to find those users online than what someone says their age or household income is. People's patterns of behaviour tend to be a lot more consistent than what they say they do."

Once this has been achieved, it is important to test your campaign, says Creighton. "You're going to get a lot of information coming back, and you have to set out one hypothesis at a time and measure which message works best. Marketers should take the best-performing hypothesis, set it as a control and move on to the next set of tests," he advises. "Don't try to test a number of variables on top of one another or you will get confused. Don't try to learn too much too quickly as this strategy is, hopefully, something that will build over time. You have to be a little patient with it as it is new ground."

MASTERCLASS PANEL
Mark Creighton is managing director of digital media agency i-level. He was promoted to the newly created position in January 2006 and is responsible for a team of 100 people. Creighton was a driving force behind the development of i-level Search.

Richard Foster is managing director of behavioural targeting company Revenue Science. He joined in December 2005 and works with clients such as FT, The Guardian, Orange and Times Online. He was previously MD of 24/7 Real Media.

Paul Fitzpatrick is digital marketing manager of General Motors UK. In his position, Fitzpatrick oversees all digital marketing for GM brands such as Astra, Tigre, Vectra and Vauxhall. He has worked at the company since 2002.

VAUXHALL IDENTIFIES AUDIENCE TO TARGET MORE EFFICIENTLY
Vauxhall wished to capitalise on a brand awareness push it was running online for its Astra model. GM worked with its media agency, Initiative, and BlueLithium to create a two-phase campaign that would identify its audience and target them accordingly.

The aim was to drive brochure requests and on-site demonstrations by re-targeting users who had seen Astra online ads.
In the first phase, a behavioural-targeting AdPath pixel was placed within the brand's rich-media creative to capture 'any user who had been exposed to this specific campaign running on any site/network'.

Once this audience had been selected, the second phase of the campaign was to target messages to them.

The second-stage creative was more direct-response orientated, involving ads that urged users to click through via financial incentives like 'Nil Deposit, Free Insurance'.

The campaign had to be tweaked mid-way because, while the early results showed an attractive click-through rate, the on-site conversions and requests for brochures and test-drives were lower than expected.

BlueLithium refined the audience to serve ads only to users who had either been exposed to the branding campaign or had shown an interest in the car by expanding the ad.

Additional targeting for the campaign was implemented in conjunction with Tangozebra, and a frequency cap of five ads was also employed to increase ROI and keep campaign wastage to a minimum.

The campaign's tactical ads were delivered to 100,000 users per day and Vauxhall Astra halved its target cost per acquisition.

Doug Chisholm, online account manager at media agency Initiative UK, which handled strategy, planning and buying for the campaign, said behavioural re-targeting had proven to be a valuable tool in the campaign.

"Based on the Vauxhall results, we plan to explore its potential in combination with many of our branding campaigns," he added.

TOP TIPS ON BEHAVIOURAL TARGETING
1. Identify your audience: what behaviour is being tracked and how relevant is this behaviour to your consumers?
2. What information does your supplier provide - just surfing behaviour or search too?
3. Is an 'intensity ration' applied? Are users being evaluated by how many times they may have visited and how much content they consumed? This will begin to separate casual browsers from buyers.
4. Can the provider offer guidance on overlaying purchase-cycle knowledge besides online behaviour to serve the right ad to the right user at the right time?
5. How are you defining success? Understand the incremental campaign impact versus other types of targeting. This will give you a better sense of the effectiveness of behavioural targeting.
6. Be clear with your brief. When creating target segments, it is vital to know the basics like communication aims and target composition.
7. Communicate with your suppliers. They have experience of creating new user segments and can advise how to improve existing ones.
8. Be open and transparent with your agencies on how your segments are defined. It is in everyone's interest to agree segment definitions to make the campaign work.
9. Ask the ad agency to share campaign results, especially on how the segment composition indexes against the target. Knowing which segment definitions work best allows them to be replicated.
Thanks to Blake Chandlee, commercial director, Yahoo, and Jamie Madill, head of sales, Reuters Consumer Media UK & EMEA

CHECKLIST
Questions that should be considered when planning a behavioural targeting campaign
What are your campaign objectives?
Do you have a clear reason to conduct a behavioural targeting campaign?
Do you have a clearly defined audience?
Does your audience profile include demographic and psychographic
information?
Have your target segments been identified?
What behaviour is being tracked and how relevant is this to the
audience?
What message do you hope to communicate?
Have you chosen the right channels/networks?
Have you briefed everyone from the start?
Are your media/creative agencies collaborating?
Is the campaign strategy clear to all parties?
Are you testing and redefining the segments as the campaign progresses
to boost efficiency?
How will it fit into your larger campaign?
Will the audience understand the link between the messages they are
receiving?