Behavioral Targeting (BT) has gotten a lot of attention as one of the best ways to optimize online advertising. First of all, BT delivers results: a recent NAI study showed that BT is more than twice as effective as non-targeted ads. Second, according to eMarketer, companies are spending money on BT ads: BT ad spend will represent 25% of total US display ad spend in two years. Third, everyone is jumping on the bandwagon: even Google is offering BT retargeting capabilities. Everywhere we read about web ads – we hear about the miracle of BT.

But why aren’t we using this holy-grail technology to optimize conversions and engage our users once they have reached our site?

Even though 1/3 of our ad money goes into BT, less than 1% of our most optimizable websites are using targeting enhancements. Why? What’s the difference between investing in behavioral targeting solutions for your ads and investing in website targeting optimization ?

Onsite Behavioral Targeting Challenges

Here are some of the reasons I think may be responsible for this discrepancy:

• Rocket Science: Maybe it’s a software issue. The perception of implementing an A/B experiment (a first step to understand impact of changes on your web site) seams very complicated. Most of the ubiquitous content management systems (CMS) don’t have a native testing platform.
• Measurement Culture: Measuring conversion lift through adservers has become standard and justifies investing more in higher-earning ads. It’s default in most adservers.
• Cost: Many optimization solutions are being sold as a part of a much larger and complex platform. Also, site owners perceive implementation and integration costs as very significant.
• Web optimization maturity: There has been a lot of talk about web analytics maturity models – and many companies may be in earlier stages where they are still defining goals and implementing solutions to measure these goals (which comes before optimization). The focus is elsewhere.

Onsite Behavioral Targeting Opportunities – no need to be Amazon!

So, really, why aren’t we doing onsite BT? Does onsite BT really generate return on investment? Let’s look at Amazon. I bet you that your Amazon homepage is way different than mine.

This is an area where technology is creeping up really fast, and the companies that do embrace the benefits of a more engaging user experience may use this as a competitive advantage. Just like any other optimization strategy, onsite BT deals with the general website strategy but may be tested with fairly simple applications before creating a completely custom experience.

To use onsite BT you have to create a customized experience to a specific group of users with the same characteristic (also known as segment, cluster or bucket). This characteristic may be the referrer or whether the user is visiting the site for the first time. These ‘bucketed’ users will receive a specific content only directed to them.

Offline direct marketing has advanced methods of creating clusters, such as the RFM method (Recency, Frequency, and Monetary Value). Other methods include prediction algorithms and variations of the RFM method. Although very effective, these methods rely on data-mining for best results.

But your site can start with something much simpler.

Create Your First Bucket (Segment)

Let’s start with a low-hanging apple, a specific user segment that you know what they’re looking for but can’t seem to find it. In more technical terms: a high-volume organic keyword with a high bounce rate.

1. Access your web analytics system and rank your organic keywords that link to your home page based on bounce rate (filter by significant amount of traffic).
2. Identify the item in first place. This is the keyword that you can target.
3. Identify what type of content users reaching your site with this keyword may be seduced, and create a segmented message for this cluster.

I have seen this method applied on a home page of a big insurance company, where if the user searches for ‘car insurance’ and lands on the company home-page they get a special message deep-linking them to a page containing specific information for that product. The message only appears for the users of this segment. If you use Google Analytics, do read this article about BTBuckets behavioral targeting plugin for Google Analytics, where you can identify and create buckets directly from the GA interface with a couple clicks of your mouse.

Onsite Behavioral Targeting Optimization – Release Early, Update Fast

By implementing simple solutions, BT optimization can become a process within the company. Make this process continuous, an you will be amazed with what you will learn about different user clusters and how you can increase engagement with them on your site.

Happy targeting!