When it comes to behavioral targeting, Amazon changed the game. Its recommendation engine set the standard for e-commerce while raising the bar on customer expectations for cross-sell and upsell opportunities. Other B2C companies followed, and now many B2B businesses have caught up, employing lead scoring and nurturing efforts based on visitor behavior.
In the years since Amazon's debut, the opportunities and challenges around behavioral targeting have evolved. As customer expectations increase and new technology becomes available, marketers need to take behavioral targeting to the next level, experts say.
The goal is to capture as much of a user's intent as possible, says Manu Mathew, CEO of VisualIQ. Organic and paid keyword searches, email, mobile, or website activity, and interaction with online advertisements are some of the most common types of customer behavior that companies track. But data collection is just the first step.
"While the types of behavior are important in howthey inform good behavioral marketing, where that behavioral information is used is important, too," says Josh Gordon, director of marketing at Knotice. "Many marketers concentrate on creating traffic for their website with behavior-based targeting, but neglect the importance of carrying that relevant experience throughout the entire website experience. There is a lot of low-hanging fruit with behavior-based targeting that marketers have yet to uncover because the focus between driving traffic and converting it is imbalanced."
Mathew agrees, saying that most behavioral data is siloed, split among departments and even agencies and other third parties. "Companies need to leverage the intelligence in a cross-channel way to understand the potential value of their audience," he says. "Overlay attributes with other systems to inform [customers'] value and drive rules and triggers based on customer potential and lifetime value. Today, the value of the audience has not yet come into play." He says the goal should be to use behavioral data to create deeper engagement with high-value customers. "There is still much alignment that needs to be done [across channels]."
Digging deeper for customer insight
Behavioral targeting is important, but some experts say that it in its current state the practice does not go far enough to understand customer needs. Professors Don Schultz and Martin Block of the Medill School at Northwestern University recently wrote a report Expanding the Success of Behavioral Targeting With Service Resource Availability, which recommends that marketers use deeper insights to understand consumers' purchase intent.
"Most behavioral targeting today is based on specific products or services which the customers access," the report states. "If no product or service trail is evident, the algorithms used in behavioral targeting are often not applicable." Additionally, privacy concerns about data collection are growing, and there are limits to the behavioral data that is currently collected. According to Block, these limits are due in part to the challenges collecting the data:
- Behavioral data may not be available, or housed with a third party
- New products or those infrequently purchased may not have any behavioral tradition
- Privacy issues with data collection, particularly in the digital space
The authors suggest that "the services to which the consumer has access can enhance and improve, and in some cases offer totally new behavioral targeting opportunities for the marketing organization." Simply put, "when you don't have perfect behavioral data, there may be other variables to look at," says Block, who adds that individual customer's behavioral data is best.
Using consumer survey data from BigResearch, the authors correlated purchase intention to social media activity, ownership of a video game console, and credit card ownership. "It allows the marketer to move beyond directly related consumer behaviors such as book purchases or online searches for products and services to build a holistic view of the specific customer," the report states. "These seemingly unrelated consumer behaviors predict purchases in different product lines and categories."
The data found a correlation between owning a video game console and purchase intentions across many product spaces, including non-obvious ones like women's clothing and health and beauty aids. In addition, those who also own a credit card and use social media were more likely to purchase across a majority of categories.
"This is by no means perfect," Block says, "but it's a whole lot better than relying on demographic information if you don't have solid behavioral data."
He adds that the research shows that no one variable should be used to build behavioral targeting delivery systems. "Expanding the basic premise of behavioral targeting is in order and should be considered by marketers going forward."
The benefits of behavioral targeting
Although companies should do more to advance their behavioral marketing strategies, doing any type of behavioral targeting can have its benefits. Interactive Data, a software company that provides solutions for the collections industry, started its behavioral targeting efforts earlier this year as part of a new lead nurturing program. "Before our leads never went from cold to warm to hot," says Jacqueline Schaeffer, director of compliance. "They were just cold. Looking at a user's behavior on our site helps us target them better." Monitoring behavior - including what pages prospects visit, how frequently they return, and what content they download determines lead scores and treatment strategies. The company works with LeadMD on its strategy.
"They become warm leads," she says. "Monitoring behavior allows us to find out what they're interested in and we can hit them sooner with the information they're interested in," based on the product and industry pages, as well as on customized landing pages built for specific trade shows and events.
As a result of its targeting efforts, Interactive Data has seen a 40 percent lift in leads overall, and a 50 percent increase in closed deals. "The goal," Schaeffer says, "is to make the sales cycle as efficient as possible by aligning marketing and sales with relevant customer information."