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Running head: ONLINE AND BEHAVIORAL TARGET MARKETING 1

Online and Behavioral Target Marketing

Tanner McElreath

Appalachian State University


ONLINE AND BEHAVIORAL TARGET MARKETING 2

Abstract

This essay focuses on different types of target marketing and how effective they can be when

used correctly, but also how these strategies affect the people they are used on. The two

strategies focused on are online target marketing and behavioral target marketing. The two types

of target marketing are broken down on how they have developed and evaluated based on their

positive and negative aspects.


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Online and Behavioral Target Marketing

Businesses are willing to do whatever they can to structure advertisements towards

consumers so that they will purchase their products and services. There are different tactics when

it comes to approaching a new or returning consumer. Online and behavioral target marketing

are two popular strategies to more personal advertisements that are specific to certain consumers.

Traditional online target marketing is when companies use consumers online information

including account logins, cookies, smart cards, credit cards, etc. to create a user specific profile

so that ads are based on whoever is using that computer or account (“Biometric Marketing:

Targeting the Online Consumer”, 2006). Behavioral target marketing is more personal and

considers people’s “web browsing data, search histories, media consumption data, purchases,

click-through responses to ads, and communication content (p.364)” which includes emails and

social media posts (Boerman, Kruikemeier, & Borgesius, 2017). Each of these strategies has

benefits that can lead to higher profits and lower volatility of the market, but some consumers

feel as though these strategies are an invasion of privacy and this worries them. There should be

a way to utilize behavioral targeting and online targeting in a way where people are more aware

of how their information is being collected digitally.

History and Background

Online target marketing has evolved as new technology has been created. Before the

internet, advertising personalization was more limited than today because information was

collected in person which makes habits harder to track constantly. The internet allows for greater

personalization because of the monitoring of peoples’ online activity (Boerman et al, 2017).

Traditional online target marketing as described above uses online activity to create an online

profile of a person but lacks the technology to know who is actually online because people can
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use others online accounts (“Biometric Marketing: Targeting the Online Consumer”, 2006).

Online target marketing has adapted new biometric technology to increase accuracy of

identification. The Communications of the ACM defines a biometric as:

A biometric is an individual’s unique physical or behavioral characteristic that can be

used to identify the individual precisely. A fingerprint, a signature, an iris pattern [6]—

each of these is an example of a biometric. (“Biometric Marketing: Targeting the Online

Consumer”, p.63, 2006)

Before biometric technology, traditional online marketing was less accurate because it was hard

to identify who was actually viewing the content (“Biometric Marketing: Targeting the Online

Consumer”, 2006).

Behavioral target marketing has become more successful with the increase of online

shopping and online presence in general. Online presence is becoming essential for businesses

who haven’t really utilized the internet in the past (Gupta, Miller, & Darda, 2016). An example

of this is with modern health care and how a web presence can create a very positive result

including a wider customer base and allow people to become better connected with their local

area but can also have a negative effect because of reviews of unsatisfied customers that have

also been posted (Gupta et al, 2016). According to Seminars in Orthodontics:

If a potential patient searches for someone with a particular skill set and range of services

on Google or another search engine, a well-optimized website will stand out amongst

competitors. It will show a visitor that a particular business is in tune with the times and

is working hard to make the practice and reputation grow. (Gupta et al, after intro, 2016)
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Social media has also started to play a larger role with online presence that is more than just a

website. It is an easier way to reach out to specific people and connect with others (Gupta et al,

2016). The goals of current online behavioral targeting are to provide a more personalized

experience for consumers, track browser history, and to provide the appropriate level of

personalization (Boerman et al, 2017).

Online Target Marketing Effectiveness

Targeting people online can lead to more profitability and a lower churn rate because of

how the non-targeted people tend to react (Ascarza, Ebbes, Netzer, & Danielson, 2017). Non-

targeting customers still tend to buy from Customer Relationship Management (CRM)

campaigns because by not being targeted, but connected to people who were targeted, the non-

targeted people don’t feel pressured to change their behavior (Ascarza et al, 2017). CRMs are

campaigns that focus on targeted customers. This shows how online target marketing effects

more than just the targeted audience which makes it an effective way to advertise. One way a

non-targeted consumer could be connected to a targeted consumer is through social media.

Social media has become more and more popular for many reasons. One reason is the

actual social aspect where people can connect with new people online. This has led to social

media being a popular place for advertisements because of the amount of information that can be

used to target people (Wirtz, Göttel, & Daiser, 2017). The more information a company can

obtain about a person allows them to create a more user specific profile which is important for

targeted advertisements. The Journal of Marketing Research states that targeting ads tend to be

effective, and that advertisements with animation tend to have more engagement that one’s

without (Ascarza et al, 2017). Social media is a popular place for this because animation is

digital, so posting this on someone’s feed or timeline wouldn’t be difficult. The Journal of
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Marketing Research also found that advertisements that appeal to emotion tends to be more

successful than ones that appeal to logic (Ascarza et al, 2017). Lastly, The Journal of Marketing

Research stated how incentives in advertisements tend to lead to more involvement than ads

without incentives (Ascarza et al, 2017). Targeted incentives could be products that are in

people’s recent purchase history. This are just some of the ways that Online target marketing can

be an effective way of advertising.

Behavioral Target Marketing Effectiveness

Behavioral target marketing is a more personal approach than typical online target

marketing because it is based on recent searches and preferences rather than just information

from accounts and purchases. The Journal of Advertising stated:

Advertisers are increasingly monitoring people’s online behavior and using the

information collected to show people individually targeted advertisements. This

phenomenon is called online behavioral advertising (OBA). (Boerman et al, p.363, 2017)

Analyzing people’s online behavior can be a contributing factor to more consistency which can

lead to lower volatility or change in products (Shah, Kumar, Kihyun, & Choi, 2017). Lower

volatility can lead to higher future cash flow or at least more predictable numbers (Shah et al,

2017). This can make behavioral target marketing effective if the proper aspects of a consumers’

online behavior are analyzed. There is usually a focus on if a consumer buys the same items

regularly, promotional items, clearance items, or frequently returns purchased items (Shah et al,

2017). Targeted advertisements are also analyzed to see if specific groups of people are being

targeted based off their race, gender, values, personality, or lifestyle (Summers, Smith, & Walker

Reczek, 2016).
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By having the habitual information of different groups of people companies can collect

more data to see which groups respond positively/negatively to certain advertisements (Summers

et al, 2016). The Journal of Consumer Research found that advertisements based on implied

social labels can cause repeat actions or even change consumers to fit into one of the social

labels (Summers et al, 2016). Examples of a specific group of people having a pattern is older

people tending to develop buying habitats and homemakers tending to be less habitual and buy

with more variety say the Journal of Marketing Research (Ascarza et al, 2017). Although this

information can be effective when creating personalized advertisements based on the online

behavior of people, there are also issues with such personalized advertising.

Counter Argument: Privacy

As more personalized information is being able to be collected, people are worrying more

about their privacy being invaded. An example given in an article from The Journal of Electronic

Commerce Research (Wirtz et al, 2017) is Facebook which shows just how important data

privacy is and if people’s information is incorrectly then there can be major repercussions. This

has caused social media platforms to promote data privacy more so that people will continue to

trust them and so that the platform popularity with continue to grow (Wirtz et al, 2017). This is

one reason why having mass amounts of personal information about people is necessarily the

most effective or ethical way to create personalized advertisements (Wirtz et al, 2017).

Biometric technology is another example of how mass amounts personal information

isn’t always the best thing because it can be abused (“Biometric Marketing: Targeting the Online

Consumer”, 2006). Communications of the ACM says:


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In fact, unethical or unwanted marketing campaigns are something that most modern

consumers will have targeted at them at some point in their lives. (“Biometric Marketing:

Targeting the Online Consumer”, p.64, 2006)

Part of privacy is based on what people personally believe is an invasion of their privacy, which

makes online and behavioral targeted marketing ineffective or unethical sometimes. The Journal

Advertising even found that older people tend to oppose ‘online behavioral advertising

(OBA)’more, but younger people want OBA less than older people, which shows how older

people tend to be more proactive about fighting OBA (Boerman et al, 2017).

Conclusion

In summation online and behavioral target marketing can be effective if used correctly

without invading peoples’ privacy, but if used incorrectly can lead to ethical issues. That creates

a balance of effectiveness and ethicality. The more information that is gathered tends to be more

effective for targeted advertisements, but the more information that is gathered the more likely

consumers are to have issues with the way companies advertise. A potential solution to this issue

would be for companies to have more clear privacy policies when consumers are using their

websites or products. If people agree to what companies put in their privacy policies, then that

would at least solve some of the legal issues that lead to scandals.
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References

Ascarza, Ebbes, Netzer, & Danielson, (2017). Beyond the target

customer: Social effects of customer relationship management campaigns. Journal of

Marketing Research (JMR), 54(3), 347–363. Retrieved from

https://login.proxy006.nclive.org/login?url=http://search.ebscohost.com/login.aspx?direct

=true&db=bth&AN=123770251&site=eds-live&scope=site

Biometric Marketing: Targeting the online consumer. (2006). Communications of the ACM,

49(8), 61–65. Retrieved from

https://login.proxy006.nclive.org/login?url=http://search.ebscohost.com/login.aspx?direct

=true&db=bth&AN=21638982&site=bsi-live

Boerman, S. C., Kruikemeier, S., & Borgesius, F. J. Z. (2017). Online behavioral advertising:

A literature review and research agenda. Journal of Advertising, 46(3), 363. Retrieved

from

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Bruce, N. I., Murthi, B. P. S., & Rao, R. C. (2017). A dynamic model for digital

advertising: The effects of creative format, message content, and targeting on

engagement. Journal of Marketing Research (JMR), 54(2), 202–218. Retrieved from

https://login.proxy006.nclive.org/login?url=http://search.ebscohost.com/login.aspx?direct

=true&db=bth&AN=122357738&site=eds-live&scope=site

Gupta, G., Miller, M. K., & Darda, M. (2016). The key to successful online marketing for an

orthodontic practice: Mastering the plan. Seminars in Orthodontics, 22(4), 313. Retrieved

from
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https://login.proxy006.nclive.org/login?url=http://search.ebscohost.com/login.aspx?direct

=true&db=edo&AN=119845945&site=eds-live&scope=site

Shah, D., Kumar, V., Kihyun Hannah Kim, & Choi, J. B. (2017). Linking

customer behaviors to cash flow level and volatility: Implications for marketing practices.

Journal of Marketing Research (JMR), 54(1), 27–43. https://doi-

org.proxy006.nclive.org/10.1509/jmr.15.0158

Summers, C. A., Smith, R. W., & Walker Reczek, R. (2016). An audience of one:

Behaviorally targeted ads as implied social labels. Journal of Consumer Research, 43(1),

156–178. https://doi-org.proxy006.nclive.org/10.1093/jcr/ucw012

Wirtz, B. W., Göttel, V., & Daiser, P. (2017). Social Networks: Usage intensity and effects

on personalized advertising. Journal of Electronic Commerce Research, 18(2), 103.

Retrieved from

https://login.proxy006.nclive.org/login?url=http://search.ebscohost.com/login.aspx?direct

=true&db=edo&AN=123298670&site=eds-live&scope=site