The power of behavioral targeting: key benefits and strategies

Today's consumers are inundated with ads, messaging, and content. Businesses are vying for attention on social media, in people’s inboxes, and wherever potential customers hang out online.

The key to boosting profits is audience engagement and standing out from all the online "noise." Today's businesses, large and small, are getting creative about how they connect with their customers. Behavioral targeting is one method to consider adding to your marketing and outreach efforts.

Imagine you hop online to browse new styles of glasses. After scrolling through a few websites, you decide to take a break from your search and move on to something else. Next time you’re back online, you’re inundated with ads from companies giving discounts and offers on eyeglasses. You also have an email with an offer for new glasses and your social media feed features ads with trendy frames. You've just experienced behavioral targeting at work. And if you bought a new pair of glasses, it worked.

So, how can you tap into this powerful technique for your business? And is it a viable method for inspiring more clicks and securing more sales? Keep reading to explore these benefits and proven strategies so you can leverage the bottom-line boosting power of behavioral targeting for your business in 2024.

Behavioral targeting is a method used in advertising and marketing campaigns. It's a technique that gathers data about engagements and customer actions. These metrics might include:

• Search terms

• Purchase histories

• Customer inquiries

Behavioral targeting uses that customer-centric data in subsequent ads and marketing, improving campaign effectiveness with each new insight gleaned.

In short, behavioral targeting is about watching, learning, and adapting your offering based on the actions and behaviors of your potential customers.

Behavioral targeting vs. contextual targeting

While behavioral targeting uses customer data to inform strategies, contextual targeting is about ad and message placement without reliance on customer data. Behavioral targeting drills down into precise consumer behaviors, preferences, and actions, while contextual targeting is more general, broad-stroking places, topics, and keywords to reach customers.

So, why do companies need to care about behavioral targeting? It's the best resource for personalizing content and messaging.

You won't attract or convert customers without first engaging them. And your company can't engage authentically without an in-depth understanding of potential customers’ wants, needs, pain points, preferences, and purchasing behaviors.

Behavioral targeting brings those data-driven insights to your marketing and advertising to boost effectiveness and results.

Benefits of behavioral targeting for marketing and advertising

Marketing and advertising without data to inform your messaging is a shot in the dark and difficult to measure. Behavioral targeting allows you to use collected data and customer behaviors to drive every ad, message, and email.

Advantages include:

• Increased relevance: If you know what your customers are looking for, you can deliver ads and content specific to those preferences.

• Boosted engagement: If you know how your customers make purchasing decisions, you can create funnels they'll readily engage with when they browse and shop.

• Enhanced user experiences: If you know what customers like and dislike about the buying journey, you can customize yours in a way that is more appealing to them.

• More efficient spending: If you know what works and what doesn't work to attract customers, you can be more efficient in ad spending and resource allocation.

• Improved conversions: Personalizing approaches to marketing and advertising makes them more effective in securing conversions and driving sales.

• Better customer knowledge: The more you learn about your potential buyers, the more insights you can use to achieve complete customer understanding and satisfaction.

When it comes to leveraging behavioral targeting and driving personalized customer interaction with your company, you'll want to understand the different types of behavioral targeting.

Website engagement

Capture insights and data about your target customers as they interact with your website. Use website analytics to learn what people are looking at, clicking on, and sharing.

For example: If a person searches for leather purses or handbags, you can assume they are interested in leather purses and handbags. You can now target this individual with customized ads and messaging relating to leather purses or handbags you offer.

Campaign engagement

You can learn a great deal about your target audiences with behavioral targeting of your email marketing campaigns. Discover which emails are opened, which inspire additional clicks, and which messages resonate most.

For example: Anyone who opens your initial email can then be segmented as "potentially interested," allowing you to move them to the next email campaign in your sales funnel to nurture them closer to a sale.

Purchase behavior

Behavior targeting is Ideal for retail and eCommerce companies. Use behavior-targeting techniques to study how your customers make purchasing decisions. Collect and analyze data about abandoned carts, purchase history, and product viewing.

For example: Knowing when a person has placed an item in their cart but left the site before purchasing is great data for any eCommerce business. Use this info to presume the shopper has "interest" and nudge them with cart reminder messages to encourage conversions.

App engagement

If your company has or is considering an app, you can also expect to learn more about those who interact with it. Evaluate app-specific metrics to study behaviors and identify purchasing patterns among app users.

For example: Use in-app usage data to inform how you connect next with each user. Reminders or special offers to return to the app are effective in re-engaging those who've downloaded your app but haven't interacted with it in a certain period.

Behavioral targeting means collecting various datasets and metrics from all your platforms and channels. Choose those channels that represent the most important behavioral data. Collect these examples of behavioral data insights to better inform your campaigns.

• Frequently visited pages

• Website viewing times

• Types of devices used

• Session duration

• Browsing history

• Clicks

• Purchases

Behavioral targeting with website interactions is by far the most common method of customer learning. Discovering how customers find your site, interact with it, and buy from it are all critical to improving its effectiveness to drive conversions.

Once you've successfully collected all that relevant behavioral targeting data, it's time to segment each potential customer into a distinct marketing category. Organize your data so that your marketing and sales teams can take appropriate action as a logical next step. 

Read on for some behavioral targeting segment examples to help you determine which categories make the most sense for your business model.

Demographic segmentation

Consider demographic segmentation to organize your behavioral data by, for example, age, gender, or income levels. You can then focus your customized marketing and ad campaigns, targeting each group of prospects with similar demographic traits.

This will enable you to meet your potential customers' needs more effectively and achieve better ROI.

Psychographic segmentation

Consider organizing your data based on consumer motivations. Maybe use personality traits or other psychographic factors to determine how potential customers make purchasing decisions. 

You can then use those insights to cater your customer service and marketing efforts to align with those purchasing journey motivations and perspectives.

Geographic segmentation

For many businesses, especially service-based ones with a localized target audience, geographic segmentation matters. However, even global and online brands can organize behavioral data based on geographic details.

Know if your customers are in rural markets or urban cities. Learn if they have preferences about where they shop. This form of segmentation can be incredibly insightful for small and large enterprises alike.

Occasion-centric segmentation

Another effective form of segmentation, which is great for business growth and product development insights, is occasion-centric segmentation. Companies with seasonal offerings or holiday products can use these types of categories to better market and advertise. 

Occasion-based segmentation of behavioral data is a game-changer for companies that rely on seasonal buying trends to grow.

AIDA or PASO modeling

Marketers can also segment their behavioral targeting data using cognitive marketing methods, like AIDA or PASO frameworks.

• AIDA: Drive Awareness, Interest, Desire, and Action with your campaigns based on your behavioral targeting data

• PASO: Use the Problem, Agitate, Solution, and Outcome framework to address and solve unique pain points discovered through your behavioral targeting

These methods of segmenting potential customer data can leverage emotional connections to brands and offerings at the various stages of engagement. Use the insights to guide customers from awareness to consideration and through to decision-making. These strategies prompt customers to take action based on those emotionally driven engagements.

Loyalty and referral programs

Incentives and referral programs are more efficient and thrive when you have behavioral data to guide your efforts. Create more meaningful interactions and build long-term relationships with customers based on their motivations, preferences, and needs.

Loyalty programs can be significant drivers of sales and referrals when executed with metrics informing those strategies.

Once you've collected and segmented your customers' behavioral data, it's time to implement those insights in engaging content, well-placed ads, and perfectly timed messaging. It's equally important to continue collecting metrics on those secondary messages to optimize and customize further.

The deeper your knowledge, the more impactful your marketing results will be. Each behavioral targeting effort will keep you more in tune with your ideal audience, essential for keeping up with changing preferences and motivations.

Start leveraging the power of behavioral targeting as part of your company's marketing strategy. When properly strategized and executed, you can expect a host of benefits, including improved engagement and boosted conversions.

You'll also be marketing smarter with precise investments in messaging and campaigns that are driven by data, significantly elevating ROI and positive results.

While behavioral targeting is sometimes called audience targeting, the terms can have distinctions. Behavioral targeting of an audience includes understanding actions, behaviors, and lifestyle elements. General audience targeting is more of a characteristic approach to understanding your audience and includes demographic metrics like gender, age, and income.

Much like the differences between behavioral targeting and audience targeting, demographic targeting involves customizing campaigns based on a potential customer's demographics only. Behavioral audience targeting bases customization on buying behaviors.

Behavioral targeting (or any targeting method) is a viable and effective method for better understanding your target audience of buying customers. However, there are ethical lines to avoid crossing. Obtaining these behavioral (or demographic) data can encroach on privacy territory. Be sure you're following transparency and permission guidelines for collecting, processing, profiting, and using anyone’s data.

Advantages of behavioral targeting include improved ad engagement, better customer customization, boosting brand loyalty, and, generally, happier customers. Disadvantages of behavioral targeting include analysis errors, data management costs, and ethical considerations.

Companies of all sizes and across various industries find incredible value in behavioral targeting. Netflix uses behavioral targeting to suggest types of movies to watch. Amazon uses behavioral targeting to send email suggestions about certain products left in a cart or based on a user's history of product searches. But even small eCommerce and community service providers can leverage behavioral targeting methods for more efficient and productive messaging and advertising.

Marketers trust behavioral targeting insights to better understand customer engagement levels. Identify which prospects are engaging occasionally, routinely, and frequently. You can then create outreach content and messages to nurture each engagement further along in the funnel toward a conversion.