Behavioral Targeting: Promising or Perilous?

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This brief report, published in 2009 via Enspektos' Path of the Blue Eye Project, examines online advertising and behavioral targeting.

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Behavioral Targeting: Promising or Perilous?

  1. 1. Issue 1 Volume 1 | November 10, 2009 unNiche Widen Your Health Marketing Communications PerspectiveData Snippets Behavioral Targeting:Essential marketing-related Perilous or Perfect?data and researchRacial Digital Divide Does Not Existon Mobile Web T he promise and potential of behavioral targeting is drawing varying degrees of enthusiasm from marketers, and simultaneousThe Pew Internet & American Life rejection by most surveyed U.S. consumers. For marketers,Project reports that African Americansare more likely to surf the mobile Web however, the anticipated advantage may be more theoretical thanthan their white counterparts. Learn actual. Personalized ads are being ignored by people theyʼreMore supposed to entice, while piquing the interest of the Federal TradeSocial Media Major Source of Commission (FTC).Medical Content for ManyManhattan Research reports that 35% ofU.S. adults use social media for health From a marketing perspective,and wellness purposes. Learn More behavioral targeting would seem to offer the best of all advertisingTelevision Most Effective at Spurring possibilities. It enables marketersConversations About Drugs to refine targeting to a personalThe Partnership for a Drug Free America level, and to direct the messaginghas found that many conversations to audiences pre-screened according to individual interests. It is aabout substance abuse are motivated bydrug-related content broadcast on giant step up from simple demographic targeting, which assignstelevision. Learn More advertising time and space placements (in broadcast or print media) according to the primary audience in gender, age-range,U.S. Non-Profits Lead Private Sector vocation, and/or other common denominators. Hypothetically,in Social Media Adoption targeting behavior should allow marketers to avoid wastefulA study published by the University of expenditures on largely disinterested audiences, increasing theMassachusetts Dartmouth Center forMarketing Research indicates that 89% ROI (return on investment) of advertising budgets.of charitable organizations are usingsocial technologies. Learn More The online technology that posits this ostensible marketing nirvana is a cookie. Not the tasty chocolate-chip sort to be dunked in a glass of milk, of course. (Continued on next page.) Editor: Merry J. Whitney A Path of the Blue Eye Project Publication Send story tips to www.pathoftheblueeye.com merry@pathoftheblueeye.com
  2. 2. Issue 1 Volume 1 | November 10, 2009 unNiche Widen Your Health Marketing Communications PerspectiveBehavioral Targeting: Perilous or Perfect?This is the infamous electronic-code “tracking cookie” that hitches itself to an Internet-browsing computerand collects data about usersʼ cyberspace itinerary. Web sites visited are deemed to reflect the interestsor “behavior” of the visitor. Lists of those sites and lists of advertisers can then be collated, to identifyproducts or services compatible with usersʼ interests.The tracking cookie does not collect personal or identifying information about the computer user, but dataabout sites visited via the computer without regard to individual users. Frequent surfing to fashion-relatedsites by a young woman, for example, might subject her sports-jock kid brother to pop-up ads for chicaccessories. And big sister, in turn, would see banner ads for sports paraphernalia. The ads wouldappear at random on other sites, because the tracking cookie is linked to the computer rather than thesite that suggested the “behavior.”While the logic behind behavioral targeting is sound, evidence of its value is underwhelming. That may bebecause Internet users tend to focus on the task at hand to the exclusion of competing stimuli; or, it couldsuggest some consumers have developed a general immunity to ceaseless commercial messaging. In anyevent, at least one experiment demonstrated no response difference between highly-targeted and“scattergun” ads.Privacy Concerns Associated With Behavioral TargetingStill, there is a privacy issue and a fine-line ethical boundary to consider. Most Americans ― 67%according to research by professors at University of Pennsylvania and University of California, Berkeley ―object to advertising tailored to their own interests. Additionally, 58% do not want targeted news, and 51%do not want tailored discounts. After the actual method of web site tracking was described, more than 85%of respondents vehemently objected to the practice of behavioral targeting.Interestingly, while objections to targeted ads and targeted news are high in all age groups, respondentsin the 18 to 24 age range favored targeted discounts by 64%; those 25 to 34, by 56%; and those 35 to 49were evenly divided. (Continued on next page.) Get More Learn, communicate and collaborate at Living the Path, our A Path of the Blue Eye online community for health marketing communications pros. Project Publication http://community.pathoftheblueeye.com www.pathoftheblueeye.com 2
  3. 3. Issue 1 Volume 1 | November 10, 2009 unNiche Widen Your Health Marketing Communications PerspectiveBehavioral Targeting: Perilous or Perfect?Apparently only the fifty-and-over respondents agree with the adage about “no free lunch” – i.e., thebenefits of receiving targeted advertising may not outweigh its potential privacy costs. Meanwhile, theFederal Trade Commission (FTC) is paying attention to both, behavioral targeting and the publicdisapproval of its use. Prior to 2009, the government watchdog had been advocating self-regulation of thepractice (within FTC guidelines and informed-consent principles). With a new Administration inWashington, the FTC has adjusted its stance.David C. Vladeck, current chief of the FTCʼs Bureau of Consumer Protection, has characterized behavioraltracking as "Orwellian." Shortly after assuming his position at the agency, Mr. Vladeck petitionedCongress for a larger budget and for fast-track permission to create regulations.“The frameworks that weʼve been using historically for privacy are no longer sufficient,” Vladeck said,suggesting it isnʼt out of the question that behavioral trackers might be taken to the proverbial woodshed.For more information on the growing battle over behavioral targeting, please see the following articles: • “Behavioral Targeting: RJ vs JP” by John Mack, Pharma Marketing Blog http:// pharmamkting.blogspot.com/2006/06/behavioral-targeting-rj-vs-jp.html • “Technology Online can Add Value to Pharma Marketers via Segmentation-Targeting,” Debrianna Obara, Razorfish January, 2009 (originally published in DTC Perspectives, March 2008) http://www.razorfish.com/download/img/content/Technology%20Online%20can%20Add %20Value%20to%20Pharma%20Marketers%20via%20Segmentation%20Targeting.pdf • NY Times article “Fresh Views at Agency Overseeing Online Ads,” Stephanie Clifford, August 4, 2009 http://www.nytimes.com/2009/08/05/business/media/05ftc.html • Marketing adviser Bob Gilbreath’s limited experiment: no difference between targeted & non- targeted Facebook ad results http://www.challengedividend.com/the_challenge_dividend/ 2008/04/facebook-ads-do.html Get More Learn, communicate and collaborate at Living the Path, our A Path of the Blue Eye online community for health marketing communciations pros. Project Publication http://community.pathoftheblueeye.com www.pathoftheblueeye.com 3

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