Humans are habitual creatures. The human brain uses up about 20% of the body’s energy but only represents about 2% of its weight. To save on energy consumption, the brain forms neural pathways for everyday actions.
This way, perform specific actions automatically and effortlessly. Over time these neural pathways become more defined, like a hiking trail. As thousands of hikers pass through the same path, it becomes easier to follow.
Eventually, we form habits. Habits can be addictive because changing them requires forging a new hiking trail in unknown territory.
While humans often share similar cognitive biases, many of our tendencies are unique to our experiences. Behavioral data captures these tendencies.
Behavioral data quantifies our habits. When we see an ad, it’s firmly planted right on our hiker’s trail. Targeted ads are placed on the path of least resistance.
Many companies believe their product is so good, people will hear it for miles. Yet there are so many products and services in that same field; customers will never find it.
In a data-based competitive global market, behavioral data is non-negotiable. Behavioral targeting is changing digital marketing. This article breaks down how behavioral data collection works – and how you can use it.
What Exactly is Behavioral Data?
Behavioral data, in the context of marketing, is about how customers use a product. In the past, we could use a small test market and multiply percentages. We might ask a few people to come in and heavily monitor their use.
But this only gave markets a general impression of strengths and weaknesses in their product. We didn’t know precisely what a 35-year-old male dentist with a family of three would click on.
Data collection focuses on where and for how long they click, look, read, and scroll. Companies no longer experiment by making up new ads and just running them. Businesses can create ads and products that they know the customer wants.
Not only that, but they can actually target the exact customer that wants it. Back in the days of television, everyone from every demographic would see the same ad. Now, only people selected and targeted see that ad.
Types of Behavior Data Collection
Behavioral data is every piece of information legally permitted to collect from a person. Companies must still respect privacy and data privacy laws. Notwithstanding that, businesses have a free reign on behavior data collection.
Facebook built a multi-billion dollar company on behavioral data. The company is not without its controversy, yet the tactic works.
What kind of data do they actually collect? Well, anything from where customers click, what products they buy, and how often they log in.
Behavior data collection often consists of customer browsing history, IP’s, and cookies. That’s the small permission box that pops up when you visit a website. By law, websites now have to obtain your permission before doing so – although no one actually reads the fine print.
Every deal, offer, coupon, and campaign can be targeted to the right people at the right time. You can collect hundreds of types of data, but here are nine of the most common.
Demographic data is the most basic and common form of data to collect. If you don’t know your general target audience, you don’t have a business model.
Every business defines its key target people; some are very narrow and others broader. The type of people that buy fast food, for instance, is more general than people looking for a luxury valet.
Demographics are the best place to start, but also not very strong on their own. Age and gender are foundational to behavioral data.
The next stage is targeting people in specific places. New smartphone GPS technology and geo-tagging in photos make this data easier to collect. You can now tell exactly where your customers are accessing your website or app from.
This type of data is useful for context. With geographical information, you can choose the right language and cultural norms. Geographical data also allows you to work closer to home.
If you are a local business with one or two locations, geographical data is equally important. You don’t want to spend ad money marketing competing with the entire world if you’re only in one city.
Geo-data lets you only target people located in your city or planning a trip there.
Targeting by industry or subgroups within your industry is also crucial. If you’re a car manufacturer, you don’t want to be targeting people searching for a cheap pizza.
Sometimes wrongful targeting can backfire by frustrating the customer. If someone searches for new restaurants in town and finds something irrelevant, this can be not very pleasant. Of course, there are overlaps.
If someone searches for new restaurants, they may also need a taxi or Uber service to get there. Customers that are planning a holiday may also be looking for a tour guide. In these cross-overs, there is a high potential for impressions, provided you get it right.
Social data is one of the most well-known types of data collection. That’s because social platforms are built on data collection. They ask for, collect, and monitor every aspect of your interaction with their platform.
Social data can be extensive. If a company knows your friends, interests, likes, shares, views, clicks, and more – they may know you better than your family. This type of data is also based on frequent use so that the data is relevant.
Social targeting is relatively cheap, through platforms like Twitter, Facebook, Instagram, and LinkedIn. For many businesses, this is a must-use method.
Strongly connected to social data, your interests are of utmost importance to behavioral marketers. Social data overlaps with interest data to some extent.
Yet interest data is more about longer-term interests. For example, whether you are into jazz music or hip-hop. Or if you prefer Italian food over Indian.
These types of interests are less likely to change over time than social data. In comparison, social data refers more to your clicks and likes. These can be transitory.
Lifestyle data is a more deductive form of demographic data. On top of basic demographics, lifestyle data consider your education, income, household, and more.
This is especially important for luxury brands. Brands that sell high-end products don’t want to market to customers that can’t afford their products. This would frustrate both the brands and customers.
Most retailers will collect data on purchase history using loyalty cards. This is common in supermarkets.
As customers often buy similar groceries from week to week, the data is reliable. Retailers can use past purchases to suggest future purchases.
Purchase data is compatible with offers, discounts, and deals for similar items. If your customer buys milk on every grocery trip, you can give him a personal discount to increase the amount he buys.
Such offers often work equally favorably for the customer and retailer. Retailers can also use this type of data to get rid of stock. Although going too heavy on this strategy can be controversial.
By tracking keywords that your customers use when searching, you can determine their current interests. This kind of data is high value but expires quickly.
Customers may search for gift wrapping paper. Using the keyword ‘gift wrapping’, you can target them with a blog article about picking a great gift. The article could be filled with potential present ‘ideas’ which are actually Amazon Affiliate links.
In combination with social data, you could also tell that the customer’s spouse’s birthday is coming up. Using these two forms of data, a video about wrapping birthday presents for your spouse may catch their attention.
As you can see, this type of data is highly valuable. But it also expires quickly. Customers that search for a keyword is likely to make that purchase soon.
Seasonal marketing campaigns are big. Some industries, like tourism, rely heavily on marketing around certain holidays. Seasonal campaigns can be extremely effective.
Other big events like Christmas, Valentine’s Day, and Haloween are commercial opportunities. Movies, clothing, costumes, and certain foods sell faster during these holidays.
How Behavioural Marketing Works in Practice
Hopefully, you can see the potential in behavioral data collection. With information on your potential customers and current ones, you no longer have to shoot in the dark.
Let’s take a look at the forms of behavioral marketing and then examples of their use.
If you’ve ever bought items from an online store, you’ve probably been subject to this. Retargeting involves collecting data on past purchases and customer habits.
Behavioral retargeting, also known as re-marketing, resells products that they know customers already like. It’s the marketing version of ‘don’t fix what’s not broken.’
Retargeting takes all sorts of data into account, but most strongly – purchase history.
Some companies, like Dell, used purchase intent to target customers. Dell found customers searches, abandoned shopping carts, and purchases to log products.
They then retargeted the same customers with ads for products they came close to purchasing. Behaviorally targeted ads drive 83% of advertising revenue and have a 70% higher CTR.
Email campaigns like the one conducted by GiftBasketsOverseas.com used behavioral targeting too.
Utilizing geographical location, the company targeted customers who previously sent gifts to a country. The company also used seasonal campaigns in combination.
Customers who have previously bought gifts were sent gift basket promotions during holiday periods.
Using lifestyle data, some companies found correlations between product purchases and spending intent. Customers that purchased Macs spent up to 30% more on travel than PC users.
While the execution of the campaign was controversial, it was successful. Orbitz directed Mac users to more expensive hotels than PC users.
Hotel suggestions were, on average, 11% more expensive for Mac users. Some argued that this move was reasonable since Mac users have around 15% higher household incomes.
Companies can use social and demographic data to build personas. These psychological profiles are then used to individualize marketing copy or images.
This isn’t always as devious as it seems. Sometimes it can help businesses exclude customers that won’t be interested in their services. If customers have recently purchased a home, they won’t be likely to buy another soon.
Real estate firms can, therefore, focus their efforts elsewhere. If your ads are more relevant, your marketing campaigns are more effective.
Finding Potential New Customers
Behavioral targeting can use social interactions to find new customers. Consumers who have recently criticized competitors on social media are ripe for targeting.
Companies with large rivals like Pepsi or Burger King can win on this front. This strategy can be even more effective when combining interest trends. Finding someone who recently spoke about fitness may be a new customer for a diet plan.
Targeting New Horizons
Behavioral data is gold in digital marketing. It can help a business make each customer feel personally looked after, even if that business has millions of customers and a marketing team of 20.
Behavioral targeting agencies are changing the face of digital marketing. Targeting solutions are cost-effective and drive higher engagements and conversions. Businesses should look to start collecting different types of behavioral data.
Companies have been observing customer behavior for centuries. But in the digital age, that observation can be automated and scaled.
If you’re interested in learning more about behavioral targeting, check out our blog. Make sure your business doesn’t get left behind – get started today.