Behavioral Data and Targeted Marketing

Stephen DeAngelis

April 30, 2014

Last January Mai Bruun Poulsen reported that “Companies Are Data-Rich and Insight-Poor.” [Mindjumpers, 24 January 2013] She explained:

“Today’s consumers share tremendous amounts of data about themselves through social channels. The amount of customer data can be overwhelming, and some companies therefore fail to turn the data into useful information and insight.”

Apparently not much has changed. Yuyu Chen reports, “A recent study conducted by Razorfish and Adobe reveals that the majority of marketers lack the ability to tackle behavioral data.” [“Over 70 Percent of Marketers Fail to Target Consumers With Behavioral Data,” ClickZ, 27 March 2014]

Poulsen was reporting on the results of a report entitled “Data-Rich and Insight-Poor Marketers Planning to Turn Information Into Intelligence in 2013 Survey Report by Infogroup Targeting Solutions and Yesmail Interactive. Poulsen wrote, “While almost 80% of the respondents plan to make greater use of customers’ social media data to drive marketing campaigns in other channels, … companies are still learning how to analyse that data. In fact, 39% said they rarely or never customize their messaging by channel based on data insights.” As noted in Chen’s headline, the Razorfish and Adobe report concludes the situation is much bleaker. “Although more and more companies have realized the importance of using data to target consumers and deliver real-time experiences today,” Chen reports, “76 percent of marketers have failed to use behavioral data in segmentation analysis and targeting execution, according to The State of Always-On Marketing Study.” Mark Taylor, vice president of analytics at Razorfish and author of the study, told Chen, “There’s no doubt that digital marketers have access to behavioral data, and there’s been considerable talk and investment these last few years on ‘big data,’ and an executive focus on data and analytics. But many businesses are struggling to translate this data with the right technology and skills into better data-led customer-facing experiences. It’s just not good enough to invest in only the technology or data analytics skills. You need your digital marketing ecosystem working together.” Poulsen noted, “Only 38 percent of those interviewed are capable of targeting a new customer versus a returning customer. In addition, a mere 13 percent of them are actually delivering segmented experiences and measuring the results.”

Looking at the most obvious way to segment consumers — by gender — demonstrates why segmentation is important. For example, “71% of women on Facebook are willing to ‘like’ a brand for deals. Only 18% of men do that.” [“Social Media and Smartphone Facts: Review of Why Men Look For Business & Love While Women Seek Games & Knowledge,” FinancesOnline, April 2014] The infographic below contains other interesting differences in social media and mobile behavior by men and women.

future of social media
Originally published at http://reviews.financesonline.com

Lori Turner-Wilson agrees that gender matters when it comes to marketing. “While the gender divide among men and women continues to narrow in regard to workforce equality,” she writes, “research from Nielsen NeuroFocus, reported by TechVibes, uncovers significant differences in the way men and women think and make purchase decisions. In fact, the mere manner in which the two genders process information is fundamentally different.” [“Gender Matters in Advertising,” Daily News, 5 June 2013] For most targeted marketing purposes, however, gender segmentation is too broad. Sara Angeles writes, “Does your marketing campaign need a boost? Businesses looking to enhance their marketing campaigns can widen their prospects and close more sales using behavior marketing, a proven, effective way to learn more about your customers, what they are looking for and how to grab their attention organically. While large corporations have all the resources to fully invest in behavior marketing experts and analysts, experts say small businesses that don’t have big pockets don’t have to be left behind.” [“Is Behavior Marketing Right For Your Business?Business News Daily, 27 August 2013] Ali Maadelat, president of The Lorenz Marketing Group, explained to Angeles, “The simplest definition of ‘behavior marketing’ is targeting prospects based on their behavior.” Angeles continues:

“The more targeted your marketing efforts are, the more you resonate with prospects and the more likely that they will become customers, Maadelat said. ‘This is the power of behavior marketing. You target your marketing based on a prospect’s actions and behavior, because you are making assumptions about their needs based on their actions,’ he said.”

Howard Kang, a marketing consultant, told Angeles, “Behavior marketing exists to understand a user’s interaction with content.” Angeles continues:

“Whether users are on mobile devices or on their computers, behavior marketing is all about paying attention to how those users react and engage with a company’s online presence. Compared with individuals’ activities online, Kang said behavior marketing serves an actual purpose of understanding user behavior and recognizing patterns to influence and improve relationships with customers. It’s about providing them with valuable information they care about, as opposed to self-serving content. … Businesses use behavior marketing in several ways, such as targeting advertisements, posting relevant social media updates, crafting compelling email marketing copy and personalizing text message marketing campaigns. For the most part, Web- and mobile-based behavior marketing rely on keyword targeting and tracking interactions. ‘Sometimes it’s as simple as targeting people who are searching for a specific kind of product,’ said Nancy Garberson, CEO of Marketing & Communication Strategies and adjunct professor at Mt. Mercy University. ‘The advertiser gets their ad in front of the prospective customers from search engine behavior.’ This type of keyword-based behavior marketing is not limited to search engines, but extends to website visits as well. … ‘Behavior marketing is not a magic bullet, nor is it a “different approach”,’ Maadelat said. Instead, the purpose of behavior marketing is to make current marketing efforts more effective than they already are. If your marketing plan is ineffective, behavior targeting will not help, as it is not meant to improve unsuccessful campaigns, he said.”

Stephanie Miles insists, “One of the best ways to predict how someone will behave in the future is to look at what they’ve done in the past.” [“5 Tools to Target Customers Based on Past Purchase Behavior,” Street Fight, 9 January 2014] She continues:

“By tracking a consumer’s past purchasing behavior, marketers can design highly targeted ads based on the specific preferences and tastes of individual customers. The question, of course, is how to gain access to data about a consumer’s spending history without violating privacy standards. For many marketers, the answer is to partner with a vendor that provides card-linked offers. A survey of 300 marketers found that three-quarters believe card-linking marketing programs will replace existing types of advertising in the years to come — a strong vote of confidence from the very industry vendors are trying to tap.”

Noting the statistics from the Adobe/Razorfish study mentioned at the beginning of this post, Ann Breckenkamp, a Product Manager at CommandIQ, concluded that some marketers may simply not know where to begin. As a result, she put together a six-step process for getting started with behavioral marketing. Those steps are:

Step #1: Define Your Goals — … clearly outline your business objectives and definition of success. …
Step #2: Identify Your Data Sources — … In order to determine which data you will need for your campaign, you must outline the types of customer behaviors that characterize your target recipients and which data will help you personalize your messaging to them. …
Step #3: Determine Your Recipients — Based on your goals and metrics, identify who you need to reach with your messaging. …
Step #4: Schedule Your Campaign(s) — Pick a schedule that makes sense for what you are trying to achieve. …
Step #5: Compose Your Messages — Your messages should always contain a clear call to action prompting the recipient to take an action that supports your campaign goals. …
Step #6: Plan How to Measure and Improve — Before your campaign goes live, know exactly how you will incorporate its results into your future campaigns.

There is little doubt that the marketing space is undergoing a tectonic shift. When the very earth is moving beneath your feet, maintaining balance and heading in the right direction can be difficult. During this time of transition, behavioral marketing provides a good foundation on which to stand. This is because behavioral marketing is based on Big Data analytics, which continue to provide insights as things continue to change.