Behavioral targeting is poised for a $1.5 billion year, according to eMarketer. And it makes sense: While the medium is seeing an influx of new dollars, there's a finite amount of premium contextual inventory for marketers to buy. Behavioral targeting is a way to sell more people-targeted advertising online and better use nonpremium inventory that may not have a natural commercial context.
But just as publishers are relying more heavily on behavioral targeting to drive online ad sales, marketers are finding new uses for the tactic. No longer just a clicks-and-impressions model, analytics-rich behavioral targeting is helping marketers figure out what types of people are drawn to their products.
Take the recent case of Snapple. It was a fair-enough assumption: The type of people who would be most interested in Snapple's "Good for You" premium green teas, which launched over the summer with metabolism-boosting, antioxidant-rich EGCG, would be health-conscious fitness nuts -- people who made wellness a priority.
To test the theory, MEC Interaction worked with Tacoda to put together a six-week behavioral-targeting campaign in late third quarter and early fourth quarter as the cornerstone of its online effort for the product launch. While the team at MEC wanted the campaign to generate lots of clicks and impressions, it was really sold on the analytics provided by behavioral targeting, which allowed MEC to identify the type of person who was most likely to visit the website and learn more about the product.
"You can find out what groups emerge as having an affinity for the product," said Matt Straznitskas, senior partner at the agency.
Not just fitness nuts
Surprisingly, the people who responded best to the campaign weren't sports fiends but those interested in arts and literature. They became what Mr. Straznitskas called "the campaign gems." People who traveled also responded well to the ads -- especially people who traveled internationally.
A marketer could, of course, try to figure out that stuff on its own, perhaps by getting respondents to volunteer information on the website. But, Mr. Straznitkas noted, it's hard to know what to ask.
Behavioral targeting offers marketers a new way of looking at audiences -- defining customers by behavior rather than by demographic. Dave Morgan, chairman of Tacoda, said behavioral targeting is actually a lot closer to the way marketers buy TV than other forms of online advertising. Contextual ads, for instance, operate on more of a magazine-style model.
The cost of behavioral targeting can run 20% to 30% higher than ads on a typical performance network, and, of course, it doesn't work with every product. Higher-end items, or those without mass appeal, are more suited to behavioral-targeting methods; for a niche product such as the Snapple green teas, it was worth it to find the audience sweet spot.
For the next pass, Snapple will try to dig deeper into specific segments within the arts category.
"When you have a client that finds something is working, they want more of it, and behavioral targeting is a way to get at it," he said. He said a lot of marketers overlook the back-end analytics they can get from behavioral targeting: "They think of it as another network or a way to get at people, but it's also a way to dramatically inform future efforts."