Purchasing Resources for Behavioral Marketing

Business Guide to Behavioral Marketing

If you are considering launching a behavioral marketing campaign for your business, you will need to learn the potential benefits and pitfalls of this type of project. While the results of the campaign will ultimately result in a boost in your advertising success rates, you may run into various bumps in the road along the way. This business guide is designed to help you fully understand the process of behavioral marketing and how it can benefit your business. In addition to conducting your own research, you may wish to consult with an experienced marketing firm to solidify your knowledge and begin formulating a campaign for your business.

Benefits

Profile creation

Implementing a behavioral marketing system allows you to create increasingly detailed profiles of consumers based on their reactions to various advertisements. Watching which ads they respond to both favorably and unfavorably gives you a look into what product areas pique their interests. This allows you to narrow the advertising of your products aimed toward each individual. By increasing your profiling efforts to more than just advertising response, you can create an even more precise picture of each consumer. Areas such as income levels, regional location, gender, and past purchases can all become part of the profile.

Personalization

The creation of a detailed user profile allows you to create a personalized advertising experience for each consumer. By narrowing the number of ads, as well as selecting particular ads most likely to appeal to each individual consumer, you can give each viewer a unique set of advertisements detailing the products you offer that would appeal most. The more detailed the profile, the more personalized the advertising experience will be, eventually leading to a display of only those product ads that will appeal to the individual viewing them.

Increased viewer notice

With an increase in targeted advertising, you increase the chances that viewers actually take notice of the advertisements. By keeping the ads that you place before viewer eyes personally targeted to each individual’s tastes, you increase their interest in the ads. With an increase in interest comes an increase in the likelihood of a favorable response. This in turn leads to both greater recognition of your particular company’s brand name by the consumer, as well as an increase in future purchases. One example of this is an ad campaigned launched by Pepsi in 2007. Behavioral advertising allowed them to track web browsers who showed interest in health-related content, which resulted in a 300% rise in ad clicks for Pepsi’s Aquafina Alive ads than any previous Pepsi ad campaign.

Increased revenue

According to a study sponsored by the Network Advertising Initiative (NAI), the costs of behaviorally targeted ads are more than twice that of the average cost of non-targeted runs of network advertising. Though costs of the targeted ads are higher, there’s also a rise in revenue experienced from sales of the advertised products. As a manufacturer, this increase in sales is due directly to the change from a traditional scattered marketing approach to one in which you target the advertising toward those most likely to respond based on their previous activity.

Pitfalls

While behavioral marketing does allow entrepreneurs to target individuals who have demonstrated an interest in their product or service, there are a few downsides to this form of advertising that you should consider.

Online marketers only

You will not sufficiently benefit from this form of marketing unless you establish an online presence. Therefore, if you own and operate a traditional brick-and-mortar business, this form of marketing will be of little benefit to you. You may decide to build a website with the sole purpose of generating customers using this method, but you will either need to learn Internet marketing or pay a marketing agency to promote it for you.

Ad consistency

If a customer is looking for your product or service, they may initially get excited when they see your advertisement. However, most individuals who use behavioral marketing use the same ads again and again. Customers will eventually get tired of seeing the same advertisements. As a behavioral marketer, you will need to keep your ads fresh, which means that you must take the time to update them often.

Not suitable for every market

Some business markets require a more personal form of marketing to be effective. If you sell popular electronic products or other retail merchandise, then you are likely to attract a lot of customers online using behavioral marketing strategies. However, if your market is one that requires personal interaction or contact between individuals, this marketing approach may not work well for you.

Privacy concerns

These days, many individuals are concerned about their privacy, particularly those who surf the Internet regularly. The tracking technology that is required to implement this form of advertising can alarm customers. Tracking software is able to detect the regional location and specific city that an Internet browser lives in, and this causes computer ads to pop up while individuals are surfing the net. This may cause potential customers to become concerned about their privacy and can deter them from shopping online.

Pricing

Behavioral marketing is one of the most expensive types of marketing. According to 2009 data by Howard Beales, behaviorally targeted marketing costs nearly 2.68 times more than regular advertising. This is partially due to the sheer cost of analyzing data to determine the demographic composition of specific channels, shows, and time frames.

Even though the investment is greater for behavioral marketing techniques, the return on investment is higher for these techniques than the return on investment for conventional advertising techniques. Another technique, retargeting, may be a feasible option if your budget can’t handle the cost of behavioral techniques, but you will still need advertising that is targeted more specifically than conventional advertising.

Conclusion

While the benefits of behavioral marketing include increased sales numbers, the high cost of this type of campaign may not fit in your budget at the moment. However, statistics show that when you perform intense behavioral studies and adjust your marketing campaigns accordingly, you will see a return on your investment. As with any advertising venture, you have to think smart and make a detailed, intuitive plan in order for it to succeed. The potential for failure is always present in the world of marketing, so establishing an intelligent, experienced team will be your best investment. In most cases, if the appropriate amount of planning is put into a campaign, you will see the results and profits your company needs.