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What is behavioral targeting?

Highly personalized and timely marketing requires knowing who is in your audience and how they interact with your business.

Highly personalized and timely marketing requires knowing who is in your audience and how they interact with your business. In the noisey world of digital marketing, relevance is key to reaching your audience. But it’s no longer enough to send targeted messages based solely on your contacts’ demographics or interests—effective marketing also uses data about how their audience interacts with their business. This is called behavioral targeting.

Behavioral targeting uses consumer activities to ascertain the most effective messages and advertisements to attract specific consumer demographics. The specific types of advertising used are determined by specially-selected behavioral segmentation techniques.

Behavioral targeting makes highly personalized and timely marketing possible by pairing contact data with real-time information about the actions (and inactions) that those contacts take online—like what they are (or aren’t) doing on your website, in your app, or with your multichannel marketing campaigns.

By developing marketing messages for the behaviors that are most important to your business, you can better target people in your audience and create more personalized experiences for higher engagement and a greater return on your marketing investments.

The basics of behavioral targeting

Behavioral targeting uses people’s activities to determine which advertisements and messages will resonate most with them. It leverages behavioral data—like what people are or are not doing in your app, on your website, or with your campaigns—to trigger personalized marketing. That way, you can connect with prospects and customers who are most likely to purchase your products, engage with your app, or contract your services.

This is good for businesses, because personalized marketing is more effective. It’s also good for consumers, who will no longer be shown content that isn’t relevant to them.

You can use behavioral targeting data to create audience segments based on actions or inactions, like users logging into your app or upgrading their plan. By segmenting your audience based on similarity in behavior, it’s easy to send people in each segment timely, tailored marketing messages that correspond to the action they’ve taken. The marketing campaigns they receive should also reflect their stage in the customer journey.

Imagine you have a web application that pairs babysitters with parents.. With behavioral targeting, you can reintroduce your app to people who have downloaded it but haven’t logged in, or you can create a campaign to reward consistent bookers with a special offer. With this efficient, personalized approach, behavioral targeting helps narrow your marketing scope and deliver relevant messages at the right moments. This means increased returns on marketing investments, along with increased sales.

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Types of behavioral targeting

With behavioral targeting, you can personalize your marketing based on several different sources of data:

  • Website engagement: What are people looking at and clicking on your site?
  • Campaign engagement: Which emails do people open and click?
  • Purchase behavior: What items did someone purchase, add to their cart, or look at?
  • App engagement: What actions have people taken (or not taken) in your app?

Website engagement

Using website engagement for behavioral targeting, you can personalize the user experience on your site. This includes surfacing pop-up promotions, ads, and links to related content. Segments of website visitors can see customized advertisements based on what products, services, and information they are interested in. Google remarketing ads are another way of leveraging website engagement—they’re used to recapture a visitors’ attention after they leave your site.

Campaign engagement

Campaign engagement helps you target based on who is opening your emails (or who isn’t), as well as what they click. This can help you fine-tune the way you organize your audience when you use this data as segmentation criteria. You can resend emails to non-openers, and to people who have been unengaged, and you can send emails to the people with the highest average engagement.

Purchase behavior

Purchase behavior is one of the most recognizable sources of behavioral targeting, because it is so common and powerful. Wherever you are on an e-commerce site, from the homepage to your shopping cart, odds are you’ll see suggestions for similar products and businesses—that’s behavioral targeting at work. You can use purchase behavior to recommend things shoppers will like, show them appreciation, and give them incentives to buy something.

App engagement

Behavioral targeting is critical to driving app engagement, because it helps you deliver personalized marketing that incentivizes more usage, based on what people are (or aren’t) doing in your app. You can even segment users based on their behaviors within a specific timeframe—like if you want to congratulate people in your language learning app who just completed their first lesson or reach out to users who downloaded your app but haven’t logged-in within a week.

Organize your audience for behavioral targeting

Effective personalization requires organizing your audience into segments based on shared traits or behaviors, and it pays off. The more you personalize your messages for targeted audiences, typically, the better the response you’ll see. In fact, segmented campaigns result in 23% higher open rates and 49% higher click rates than unsegmented campaigns on average, because people receive the messages that really matter to them.

For example, if you own a luggage company, you may segment prospects by whether or not they’re a frequent flyer and if they’ve previously bought travel-related items. You could also segment people who already travel often for work separately from people who have merely expressed an interest in recreational travel.

With an organized audience, you can use your CRM to track your prospects' progress through the customer journey. Fortunately, much of the tracking can be automated. For example, you can automate a pre-written message to follow up with people who’ve put something in their shopping cart but haven’t checked out yet. With behavioral targeting and a CRM, you can also send special promotions based on a prospect's engagement with your website, campaigns, app, or e-commerce products.

When you organize your audience, focus on the customer behaviors that really matter to your business—these are the ones that you should use to trigger automations. That way, you can do things like automatically remind a user to log into your app after 7 days of inactivity, which will drive engagement without adding work. You’ll save time, which you can use to focus on the high-level tasks and projects that can't be automated.

Why does behavioral targeting matter?

Behavioral targeting tactics are designed to increase engagement, although that looks different for every business. Your goal may be for site visitors to download your app, purchase a product, read more articles, or even sign up for a service. When your marketing content is personalized for visitors based on observable behavior patterns, it has a much higher success rate than generic suggestions.

Personalized content, sent with the right content at the right moment, increases the likelihood that your audience will take the action you hope they will. It also creates a more interesting and engaging experience for visitors, which increases customer loyalty. And doing this right is more important than ever. According to Accenture, 87% of consumers say it's important to buy from a brand or retailer that "understands the real me."

Behavioral targeting works for both businesses and consumers. Here’s why:

  • Behavioral targeting helps you make more informed decisions. Instead of testing marketing across channels or based on hypotheses about their customer journey, behavioral targeting gives you specific data about what your audience is doing so you can reach them when it matters.
  • Behavioral targeting teaches companies a great deal about their customers. Instead of wasting time and money on marketing to a general audience, you can create detailed contact profiles, organize them into segments, and give them the content they’re most likely to engage with—based on what you know about them.
  • Visitors will engage more with a personalized website and marketing experience.
  • You can get a better return on investment with higher click-through and conversion rates.

If you want to grow your audience, or simply stay competitive, behavioral targeting is an important tool.

Behavioral targeting vs. contextual targeting

Behavioral targeting is all about collecting data and using it to create a more personalized experience for your audience. These targeted ads are proven to be twice as successful as non-targeted ads.

Contextual targeting is a less personalized approach. It's about displaying ads based on the content of a given page, but not individual demographics. For example, with contextual targeting, a visitor to a makeup company’s site would likely see ads for skincare products. While contextual targeting can be effective, the downside to this approach is that the ad may get lost in the similar content of the page.

Luckily, behavioral and contextual targeting aren't mutually exclusive. You can use behavioral targeting to personalize and improve contextual targeting ads. For example, if a user previously visited a specific makeup company's website, you can show ads for that business on the fashion or skincare site they’re visiting.

Types of Behavioral Segmentation

One of the most critical components of effective marketing is a process called Marketing Segmentation. This process goes beyond the usual consumer data, such as age, sex, and location, to microscale consumer groups based on their member's actions and needs to ensure that their problems are solved efficiently. The desired result is to ultimately increase sales volumes while providing consumers with satisfying shopping experiences. Behavioral segmentation consists of various subcategories of segmentation that include, but are not limited to, the following:

Demographic segmentation

Rather than focusing a business's resources and time on an entire market, demographic segmentation places the organization's focus on the precise demographic most likely to make purchases. This technique centers around demographic variables such as gender, age, education, income, and similar consumer traits that provide businesses with important information about their customer base and how their needs can be more effectively met.

Psychographic segmentation

Psychographic segmentation uses the goal of identifying consumer motivation to divide customers into groups centered around consumer personality traits and why they make the decisions they make about the things they choose to purchase. It is used to determine a given marketing campaign's effectiveness and to develop customer service and products that best meet consumer needs.

Geographic segmentation

Geographic segmentation is used by businesses to divide their customer base by geographic locations, such as by city, state, or region, or it can divide a market into different types of areas, such as rural or urban markets. Geographic segmentation helps large companies with national or international markets by focusing on the consumer needs of consumers based in specific locations. It also works for small businesses that have limited budgets.

Occasion-based segmentation

Occasion-based segmentation is effective for product development and business growth strategies and represents specific occasions that prompt consumers to interact with certain products. For instance, a bar might utilize occasion-based segmentation to promote a particular type of holiday beverage.

Loyalty programs

Loyalty programs are used as a type of behavioral segmentation that issues rewards and similar incentives to create meaningful consumer interactions that can achieve long-lasting relationships between businesses and the consumers who return to them regularly. Airline frequent flyer programs are prime examples of loyalty programs.

AIDA modeling

AIDA modeling is a cognitive marketing model that creates consumer awareness of a product and generates interest. This behavioral segmentation helps consumers form emotional connections to products by making a desire for them. The primary goal of AIDS is to prompt consumers to take action and purchase a company's products.

Is Behavioral Targeting Ethical?

Businesses are collecting more consumer data than at any other time in history. Therefore, whether or not these practices are ethical has frequently been questioned. Organizations must know how to responsibly utilize the data it collects from consumers and use high ethical standards in implementing that data for marketing purposes. When ethical guidelines are carefully followed, behavioral targeting is considered ethical because it encourages brands to be more transparent with consumers about why they are being targeted. Responsible data collection gives consumers various options by allowing them to opt-in or out once they have entered a website. It is often presented in the form of a website's privacy policy that consumers can read and make choices concerning their levels of participation.

Such methods as keyword searches, consumer databases, knowledge of consumer loyalty, and specific information about website visitors allow companies to streamline consumer buying experiences, resulting in more focused purchasing opportunities for every customer. They prevent consumers from digging through mountains of irrelevant products to find what they are looking for and help make shopping experiences more accessible and pleasant.

These things also aid businesses by enhancing consumer conversion rates, lowering marketing costs, and by helping those businesses learn more about their customers to target them over time and provide them with the appropriate messages at ideal times.

Get started with behavioral targeting

Mailchimp's all-in-one Marketing Platform makes it easy for small businesses to connect with prospects, keep current customers engaged, and create data-driven behavioral targeting campaigns. With Mailchimp, you can manage campaigns across email, social media, websites, and more—so you can find out what's working and do more of it.

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