Stalking: to pursue or approach stealthily.
Creepy, yes. But to marketers, it’s known simply as online behavioral advertising (OBA), or behavioral targeting. Simply put, it’s a technique used by online advertisers to show targeted ads to consumers. Information is collected about their browsing behavior, including the types of products they search, what websites they visit, when they visit, etc.
For marketers and retailers, behavioral advertising simply makes the online search experience more about you.
But yes, it’s a bit stalkerish, and that’s coming from a marketer.
To better understand why you’re targeted by certain ads, it’s helpful to understand how and why that information is collected. Sometimes, it’s blatant that you’re being targeted. Other times, not so much.
How Do Retailers Know What They Know About Me?
In short, retailers use information you provide -- along with your purchase data, some statistics, and common sense logic.
Let’s break this down.
- Information You Provide. Retailers generally assign you a random ID number and record data from your purchase -- from what products you purchase to the method of payment you use. Your own purchase behavior helps them connect the dots.
For example, you pop into a big-box retailer and purchase cereal and milk. To you, you’re simply hungry. For the retailer, they see that you:
- May live in the area (you purchased milk, which needs to be refrigerated).
- Aren’t a health nut (Cookie Crisp might not cut it with the healthy crowd).
- Paid using a student credit card (maybe you attend a local university).
- The Data Behind the Transaction. There are some routine purchases in every household that can be telling about your household makeup. For instance, every three weeks I visit my local natural food store and pick up a bag of food for my two dogs. Now, if I suddenly change my shopping pattern, the natural food store can see from the data that:
- We may have gained (or lost) a furry family member.
- I may have switched food brands (something the brand would be very interested in knowing).
- I might buy dog food elsewhere (if they have pricing or inventory data, they might see that I found my brand for a cheaper price at another store).
- Statistics Behind Purchases. Big-box retailer, Target, was able to identify women in their second trimester by their purchase habits. To the layperson, people might be buying more hand sanitizer and unscented lotion for personal hygiene. But for the statistician, a spike in these purchases signals the approach of a mother’s due date.
These statistics can be run for other ‘life markers’ as well:
- An address change signals retailers to provide coupons for paint and furniture, two very likely items you’ll need to outfit your new abode.
- The purchase of an engagement ring or a wedding planner book is statistically significant, likely resulting in the need for a venue, wedding dress, cake, music, and a variety of other wedding related items, including honeymoon travel.
- Logical Purchases. With the birth of a child comes diapers, eventually, a first potty, then likely mattress protectors until the child is potty trained. Some other logical purchase patterns include:
- A game console purchase, like an Xbox, will result in the need for games and accessories.
- For contact lens wearers, not only are contacts purchased but so is the solution to clean or moisturize them. There’s no need for the solution otherwise.
- Purchasing the 2015 hottest Christmas gift, Pie Face, will lead to an increased likelihood you’ll purchase cans of whipped cream.
Isn't This Practice Illegal?
Illegal, no. Regulated, yes.
The Federal Trade Commission (FTC) has been responsible for addressing aspects of the online marketplace. As such, the FTC enforces several privacy statutes such as the Gramm-Leach-Bliley Act (financial institutions), COPPA (Children’s Online Privacy Protection Act), CAN-SPAM Act (Commercial business messaging to consumers), and the Telemarketing and Consumer Fraud Abuse Prevention Act (unsolicited phone calls and fraud).
Organizations like the Direct Marketing Association have set forth OBA guidelines to help balance the needs of consumers and businesses. One such recommendation is transparency behind what each website collects on visitors and what it does with that information. This includes limiting the use of sensitive information, like pharmaceuticals, or in some instances financial information, for marketing purposes.
What's the Difference Between Online Behavioral Advertising, Retargeting, and Remarketing?
Online behavioral advertising tends to collect data, often giving the consumer the feeling that they’re being watched. With OBA, they’re more likely to be triggered with a negative assumption, like a weight-loss suggestion or product, that is intrusive (especially if you already know you’re overweight).
OBA makes assumptions and inferences based on the products you search, websites you visit, sources you used, and more to generate a targeted ad that’s likely to get your attention.
Retargeting is slightly different. With retargeting, a cookie is typically left on your computer or device when you visit a website. Knowing how you searched allows retailers to retarget you with specific sites you’ve visited, products you’ve clicked on, searches you’ve performed, or even dynamic ad copy based on the information it might know about you.
For example, I’ve been retargeted with a sponsored ad from Casper on my Facebook page. Why? Not only have I been on their website recently, but I’ve also been on several other mattress websites. What they can’t tell is that I already have my new mattress. (Psst Casper, sorry. We went elsewhere, but we still love your brand.)
Lastly, remarketing is again slightly different from OBA and retargeting. Remarketing helps retailers drive up additional conversions. Like retargeting, retailers want you to see their product, service, or deal again (and hopefully purchase it), but the methodology is different.
Remarketing is often used to re-engage a consumer. For instance, if an online shopping cart is abandoned, remarketing might come to the rescue with emails or direct marketing to drive the conversion. Plus, it’s an excellent time to target someone with an upsell or a cross-sell for a product or service that they may need in relation to a recent purchase.
Undoubtedly if you’re a Kohl’s shopper, you’ve seen emails like the one above before. It’s a horrible feeling to lose out on “free” money so retailers like Kohl’s use email remarketing to remind customers, like myself, that I have outstanding Kohl’s cash to redeem, and I indeed do.
Should I Want to Be Behaviorally Targeted?
The marketer in me says yes, of course, you want to. But, I get it. All this behavioral targeting, retargeting, and remarketing is a bit stalkerish, too.
If you’re adamant about keeping your online activities private, here are a few suggestions:
- Review Privacy Policies and Opt-Outs. Every website has them (or should). This will tell you exactly what data is collected and how it’s used. If you don’t like what you see, you’ll have the option to opt-out likely from the same page.
- Look for the 'Forward I' Icon. This icon is a universal icon in the advertising industry that signifies ad privacy and choice.
Clicking this icon will allow you to access a page where you can opt-out of providing this information for behavioral advertising purchases.
- Review Browser-Level Protections. Internet Explorer, for example, will allow you to block specific companies from gaining behavioral advertising information when using their platform.
And of course, if you’re okay with your behavior being available to companies, you might come across some pretty awesome organizations or deals you were previously unaware of. It’s a trade-off of course, but one that has its benefits if you’re alright with being stalked, even just a little bit.