The clicks of the trade
30 March 2012
Behaviour analytics used to be the domain of psychologists, but with the explosion of digital data, many marketing departments and agencies now have their own behavioural analysts tracking the results of campaigns and visitor behaviour on their websites. How are they using this information to drive their marketing strategy?
When online advertising was in its infancy, the number of clicks that an ad or a web page generated was regarded as one of the most important measurements a brand could track. But did it really deserve that top spot? A recent Nielsen report, Beyond Clicks and Impressions: examining the relationship between online advertising and brand building, argues that click-through rates give no indication of the impact online campaigns have on offline sales or consumer attitudes.
The information now available goes far beyond clicks. Statistics gathered by the Google Display Network, which reaches more than 80% of global internet users and serves more than six billion ad impressions every day, mean that the data available to brands is more meaningful than ever and does no longer assume that consumers behave the same way as markets do – logically.
The search giant rolled out behavioural targeting on its AdWords service in 2011, while Google Instant takes the search data the company has gathered and uses it to predict what people are looking for once they start typing in the search box. Facebook ‘likes’ and ‘dislikes’ also provide easier tracking for brands.
This data has driven the rise of behavioural targeting, which has been growing at 20% or more each year for several years, and is forecast to keep rising until at least 2014. Ad spend in the US alone increased from $350m in 2006 to $1.7bn in 2010. The 2011 figure is expected to be $2.7bn, and by 2012 brands are forecast to be spending $4.4bn on online advertising.
Grass Roots’ UX and content manager Julie Yeardye believes clicks can still be a valuable metric when combined with the other measurements of media campaigns that sit around it. “The only way to measure the return on investment (ROI) is to establish the goals of a site or ad, then track how many people did what you wanted. Brands need to buy into a long-term cycle of watching, improving and learning,” Yeardye says. “Conversions, not clicks, are what count.”
The amount of data available online gives the brands that use behavioural targeting a real opportunity, not just to convert leads, but to develop more meaningful strategies that give them a greater chance of generating that elusive golden egg for brands – loyalty. However, recognising what’s important and what’s not is key. Some brands do behavioural targeting really well. Amazon’s on-site recommendations to members were one of the earliest examples of it in action, while its use of data analysis to follow up when consumers view but don’t purchase items is smart. It doesn’t bombard people’s inboxes, but sends a couple of relevant emails; it hardly feels like marketing at all.
Media brands use real-time data analysis to show visitors to their sites what’s most read, shared and watched, while financial institutions make it their business to target consumers who start online applications but fail to complete them.
As well as providing brands with information to improve the user experience and conversions on their websites, behavioural targeting is giving brands a bigger ROI on their online advertising, with many experiencing 25-30% increases in response rates.
Many organisations have been quick to cash in on these opportunities, but what about the consumers? Is their privacy being invaded? Caspar Schlickum, managing director, EMEA, at Xaxis, a company that uses data and technology to provide audience portraits, thinks that if brands use behavioural targeting data in the right way, consumers will not feel their privacy is being invaded. And privacy is a concern that brands can’t ignore.
Xaxis is working with regulators to ensure that consumer rights are protected, while brands can still enjoy effective marketing. “Brands need to see this as a self-regulatory issue. Working with reputable partners, being smart about their marketing and how they use the rich data available to them will help them to develop valuable, long-term relationships with their customers.”
Schlickum cites frequency caps on advertising as a tool that every brand should be employing. He gives the ad for a pair of shoes that doggedly follows people around the internet for six weeks after being viewed as an example of a brand really getting it wrong and making consumers feel as if their privacy is being invaded.
Governments, trade bodies and consumer rights groups in Europe and the US have debated the privacy issue, but most agree that behavioural targeting is here to stay. Giving consumers the opportunity to opt in or out seems to be the choice, along with icons to tell them that ads are “interest-based”.
Rupert Staines, managing director Europe at Radium One, the online ad network that uses social network data to help brands identify users most likely to interact with their advertising, says: “As audiences become marketing-savvy, it is more important than ever that marketers ensure they are targeting consumers with the most relevant content. Consumers will respond positively to useful and helpful information, but will be less welcoming to irrelevant adverts.”
However, Vibrant chief executive Cella Irvine warns against too much emphasis on behavioural analytics without first considering the context. “Today’s consumer wears many hats. At any given point in one week, he or she may be a parent, a business decision-maker, a homemaker, a spouse. When that consumer is researching a new washing machine, he or she is less open to an ad about a luxury cruise,” she argues. “Contextual targeting is the best way to ensure that the consumer is receptive to the brand message at the moment the message is received.
“Conversely, they do not respond well when they feel tracked by brands, and having ads appear in odd contexts sends a clear signal of that. Both these targeting mechanisms have their place in meeting advertisers’ needs, and the most savvy advertisers will find the optimum way to combine the two.”
For now, it seems that not too many consumers are worried about the ads that are served to them based on their interests, and the higher conversion rates show that they are buying as a result of these ads. However, brands need to ensure that they use the data they have carefully, or else they run the risk of taking behavioural targeting too far and tipping the balance in the other direction.
Consumers know that they are going to be served ads when browsing the internet. As long as brands don’t overdo their behavioural targeting, presenting them with relevant advertising can enhance their online experience. Surveys of internet users have shown that people are more aware of the practice, but that transparency about the use of data is of paramount importance. So, brands need to be honest about what they do with the information they have if they are to keep consumers sweet.
By Amanda Saint