Benefits of Internet Big Brothers’ Behaviour

The internet is not anonymous. Google, Yahoo and AOL record your search information for up to eighteen months after you first click the “search” button; but whilst this may conjure up images of a Big Brother-esque state the reality is more positive. Few would object to the information being used to find terrorists or serious criminals, and there are benefits even for the average consumer. Some websites are fostering a “village store” mentality; they build up a relationship with their customers based on past shopping habits and recommend items of interest to them. The customer loves rock-music; an ad appears reminding them of their half-price sale on all rock albums. Sites suggest that, having bought a new car, useres might check out another site offering great deals on car insurance. This service, known as behavioural targeting, has come about through monitoring browsing history, sometimes from the moment you log on to the internet. It has become a contentious issue in marketing as issues of privacy war with those of profitability.

Behavioural targeting works by monitoring your internet activity across various websites and then recommending things you may be interested in through advertising. There are three different types: first-party targeting where user behaviour is tracked by means of a cookie on a specific website; "network" advertising where sites contract with each other to share the data about user journeys; and the most contentious: ISP based behavioural targeted advertising. Whilst ISP networks operate on the same principles as the previous two, the data gathered is more comprehensive. ISPs can intercept users' browsing activity, putting each user into a box that broadly and anonymously categorises them, and gives them ads based on which "box" they are in.

The benefits of this targeted marketing for companies are obvious. By focusing their advertising they ensure their message reaches their target audience, generating better responses and cost-effectiveness. Network advertising also allows them to reach audiences outside the immediate context of their website, increasing the frequency and relevance of visits to their site. It ensures relevant messages reach consumers and lessens the chance of them being bombarded with irrelevant marketing messages or “ad spam”. Estimates suggest that the average consumer receives almost 600 million marketing messages a day, and according to a 2009 Microsoft report 97% of all email sent is spam. Relevant advertising lessens the chance of customers simply consigning emails to their spam box, or ignoring online ads. As 24/7 Real Media’s Dave Hill succinctly says, “It is about giving the consumer as much relevant advertising as you can, via addressable mediums".

The success of behaviourally targeted campaigns is normally measured in terms of direct response – how many people actively respond to the advert – rather than in brand awareness, meaning it’s difficult to build a subtle picture of its effectiveness. Concerns also revolve around issues of privacy; this anxiety has led to Dr. Larry Ponemon’s of the Ponemon Institute’s report that 98 percent of companies curtail investment in online behavioural targeting because of “consumers' privacy fears”.
One approach to alleviate these fears is transparency about the company’s approach to advertising. There is pressure on them to be honest about their intentions, an emphasis which has resulted in the creation of the “Power i” icon. This is a little “i” which will appear on adverts which use demographic and behavioural data to target consumers. Clicking on the icon will take consumers to a website where they can find more information about how the advertiser used their Web surfing history and demographic profile to recommend them the ad.

In Dr. Ponemon’s interviews with 90 senior marketing managers from large organisations he found 63% reported that behavioural targeting was the best “rate of investment” generator of any marketing tactic. The clear potential of this approach cements the need for corporations to work out a policy which will protect and educate users as to the method behind targeting whilst still generating good returns for the organisation. Transparency also helps the consumer trust the advertiser, improving brand-image and allowing them to see the benefits of adverts which are relevant only to their tastes. Cloud-based programmes like Spotify, which openly acknowledges that it uses users’ music tastes and basic personal information to choose which adverts they hear, provides the positive face of behavioural targeting and a model for other companies.