We post a great deal about behavioral targeting on the Lunch Pail under a variety of different, distinguishing banners. There’s network behavioral targeting, onsite behavioral targeting, affiliate networks, relevant content serving, and contextual digital advertising.

Take, for example, the recent contextual display ad from White Castle on The Jerusalem Post’s homepage. (Kudos to Ad Age for catching this first).

What is the hottest topic right now in the news? Swine flu. It’s easy to verify by checking Twitter’s most searched, Google’s, Yahoo’s – wherever you browse on the Internet for the last two weeks you’ll see some content about Swine Flu (including, apparently, here).

So, it’s easy to understand how the affiliate network – recognizing the context of the keyword “swine” – would display the pulled pork sandwich creative on the Jerusalem Post’s website.

This case reinforces the need for due diligence and double-checking the types of websites that are included in a contextual ad buy on an affiliate network. If you’re selling meat, for example, you should avoid animal rights websites, religious websites, etc. That is something that Zimmerman, White Castle’s agency, is now doing double-time. It’s easy to avoid the bad PR (and Leno’s “Headlines” segment), it just takes extra due diligence.

It also reinforces the relative safety of deploying onsite targeting strategies solely on the homepage. Onsite targeting preserves the ability to be relevant while neutralizing the possibility of bad context.

Does anyone else have some funny contextual ad mishaps to share?

Yesterday, I had the pleasure of attending a Behavioral Targeting Standards Consortium (BTSC for short) talk from Emily Riley, a senior analyst from Jupiter Research (which has now, as of January 1, been officially absorbed by Forrester Research). While Knotice isn't exclusively a targeting company (shameless self-promotion… find out about our software here), we have an active interest in technology being used for the best possible consumer experience. Given the increasing activity of consumer privacy advocates online, part of what contributes to a positive online consumer experience is using the correct, most descriptive definition of the types of behavioral targeting.

Riley provided some interesting commentary on the state of the so-called “behavioral targeting” industry. Lots of statistics get thrown around about how 50% of marketers prefer to use BT whenever possible, and consumers are becoming increasingly accustomed to and accepting of these technologies. All that information is great and encouraging. But, without true, widely-accepted definitions of BT types, the growth and adoption of these technologies is stunted… and the decision makers in Congress who govern the impact of privacy laws on the industry will remain uninformed when passing laws.

With this in mind, I asked Riley how she would define the types of behavioral targeting. As a respected analyst and vocal expert on behavioral targeting, she has the power to influence the thinking in the industry, provide clarity, and leverage the “Standards” part of the BTSC to get everyone using the same terminology. The types of behavioral targeting she defined were behavioral, contextual, geographic and demographic. While her definitions do describe different approaches, they are more indicative of segmentation strategies than types of behavioral targeting. They are approaches to carving up the data and leveraging it to achieve a desired outcome.

The determining factor for a type of behavioral targeting should include both how and where the technology works. That’s why we’ve defined it as “network” and “onsite” targeting on The Lunch Pail. The difference is clear. Network is an affiliate approach while onsite targeting is limited to a specific website (and therefore sidesteps the ire of consumer privacy advocates).

Definitions are extremely important as the market for this technology, and the terminology that governs it, develops. It is vital at this stage to be cognizant that the attentive audience to this development process includes not just industry insiders, but lawmakers, privacy groups and consumers. Winning the PR battle now should be a primary consideration.

What are other ways to define behavioral targeting, and win the PR battle?

It's nearly the end of the year and time for another check in on the world of behavioral targeting. Some of the ongoing debate, as I've outlined in the past, revolves around the idea that companies who develop behavioral targeting technology learn to self-regulate the use of their product with regard to data privacy (both data acquisition and use). The Federal Trade Commission is not in favor of company self-regulation, believing that tech companies need to answer to an authority other than their own, while online advertisers and those that publish content believe they can regulate themselves.

This is a relevant topic right now because the FTC will publish an update later this winter that will outline some online advertising privacy principles they believe need put in place. Normally this would be alarming to those companies with behavioral targeting technology, but the current direction of the FTC has been decidedly in favor of self-regulation. In fact, among the many signs the FTC has given that point to their fundamental belief in self-regulation, the pending report they’ve announced is entitled, “Privacy Principles for Industry Self Regulation” — a good clue as to their intentions toward the industry.

That said, those in charge at the FTC right now are only their through January 20, 2009. President-elect Barack Obama has already been on the receiving end of some lobbying for greater online privacy rules for data. The Center for Digital Democracy recently announced that the Bush administration gets an “F” on privacy.

Right now these lobbying efforts are centered where they have been for the past two years, on including an opt-in so consumers are fully aware and complicit in the idea that their Internet browsing behavior is being captured and used to show them ads that are relevant to their needs. While online marketers hold to the idea that these practices are not dangerous to the consumer, the advocacy groups have continued to gain steam in Washington, and the new administration is likely to lend a more listening ear to their concerns.

Once again, this ongoing debate calls out the important difference between the two levels of behavioral tracking technologies, onsite targeting and network level targeting. While network level targeting will continue to be scrutinized, onsite level targeting continues to be the safest, most effective and the most direct use of targeting technologies. For better or worse, everyone from investors to Congress to consumers will continue to demand more and more of network targeting technology, further opening the door for the success of onsite targeting.

While everyone and their brother is gearing up for Black Friday and Cyber Monday, I'd like to take a quick detour and share a recent development in the behavioral targeting world. Conversions may be at a premium this holiday season, and behavioral targeting technologies enable many legitimate, helpful online marketing strategies that boost sales by providing consumers with information on products and services they actually have an interest in.

This update again revolves around network behavioral targeting technology and the increasingly infamous NebuAd. The issues have long been chronicled and I won’t rehash them. What is now relevant is how this specific case could have an impact on behavioral targeting as a whole.

While Congress is busy conducting a seemingly half-hearted session dominated by economic issues, BT debate has taken a backseat in D.C. However, there is still activity.

A class action lawsuit filed in the aftermath of Nebuad’s decision to disavow network level behavioral targeting is concentrating their fight on seeking an explicit opt-in to have select information captured for marketing use. This is good news. Why? The lawsuit isn’t focused on shutting down the industry, destroying the technology or attacking growing companies. It’s actually designed to mandate an opt-in – not a bad thing at all.

If an opt-in mandate happens, it’s up to the network level companies to sell consumers on opting in. After all, isn’t targeting technology supposed to personalize the shopping experience and make it easier and quicker for a customer to navigate to a product they want, or receive a compelling offer? Yes! It’s important for expend a little PR capital to “sell” their consumers on the possible improvement to their shopping experience.

The mandatory opt-in could trickle down to onsite targeting technologies in the future. Though, network and onsite targeting are quite different, an opt-in at the onsite level is a possibility. That’s why winning the PR battle now is so important.

Whether you’re thinking about adding behavioral targeting technology to your online marketing arsenal this holiday season or after the holidays, it’s important to invest wisely in technology that is built for the long-haul. While the merits of BT at the network level continue to be discussed up on the Hill and through class-action lawsuits from privacy and consumer-advocacy groups, onsite level targeting remains safe. There’s nothing dangerous about a shop keeper knowing your favorite product. Demonstrating better understanding of the customer is the next level of effective online marketing, and onsite BT plays a vital role enhancing the online consumer shopping experience. Thus far, the lawmakers appear to understand that fact.

We talk a great deal on this blog about how we feel about this online marketing industry, our beliefs about mobile marketing, email marketing, onsite and other behavioral targeting and the industries of many of our clients. We're going to add another voice, another perspective, to our blog that I think many of you loyal readers will appreciate: the folks who develop the software.

In an effort to keep our loyal readers updated on both our approach to software development, and the development of our own software, we’ll be devoting Friday posts to what’s new with our software. It’ll also give us the opportunity for you all to meet a few of the wizards behind our software curtain. They work really hard and have helped develop software that is unique to the online marketing space.

We figure it makes sense for the folks who worked on some of these features to tell you about them. The first few topics we’ll cover include the importance of a calendar function for cross-channel campaign planning, our slick new condition building environment, how we do web services, fancy new reporting features and much more.

Now, before anyone says, “Oh great, now they’re going to go all salesy on me,” – we’re not. Tell us if we are, and we’ll stop being salesy. We believe that too often folks seeking software solutions are told how it is with little wiggle room. We welcome feedback. We love feedback. The idea is to keep everyone up to date on what we’re working on, but not in a stuffy brochure or in over-produced language on our website (not that we don’t believe in that stuff, too!).

In the mean time, here’s a blast from the past here on the Lunch Pail where our CTO, Bill, wrote a piece about What Makes Good Software Good. There are two parts. They’re good reading, and some of the more searched and popular posts we’ve had on the Lunch Pail.

Last Friday The Lunch Pail's newest contributor did a good job explaining some of the nuances of online behavioral targeting – specifically the differences between network targeting and onsite targeting. These two vastly different applications of tracking technologies are important to understand both morally and tactically. The Senate Commerce Committee is currently debating possible resolutions to the moral issue of protecting consumer privacy on the Internet. I'll address the details of that debate in a future post. For now, let's set aside the obvious moral quandary that shrouds this topic and skim the surface on the business viability of network behavioral targeting.

There are some business questions surrounding the implementation of network behavioral targeting. Does network consumer targeting offer worthwhile data to build a long-term picture of individual consumer behavior? This is a complex question because many factors go into shaping an individual consumer’s online persona. There are some key unanswered questions that introduce too many wild cards into network consumer targeting – questions without a simple answer and without technology capable of addressing them.

Here’s a few:

• Does tracking of consumer behavior over a network give a complete understanding of an individual consumer? In a word, no. What if a consumer searches for a gag gift, or let’s a friend search something on their computer? Is their persona instantly, irrevocably reshaped and rendered inaccurate?
• Are consumers allowed to shift their interests? Gas is more expensive right now. Consumers are cutting back, but they’re still receiving ads deemed worthy according to their previous spending levels and corresponding online behavior. Is that using the technology to better communicate with the consumer?
• Does the technology identify a community computer from a personal one? Tracking is completely useless in computer labs, cyber-cafés, etc.
• If a family of 6 all uses the same computer, isn’t the created profile compromised for targeting purposes? Six different likes and dislikes from user to user is not something network level targeting can distinguish.

All of these questions help reinforce the notion that targeting within a domain is a more viable business practice now and in the future. There’s nothing wrong with a specific business remembering something about a specific customer. In fact, that’s a company trait most consumers welcome, off-line. My favorite stores are the ones where I hear “Hey, Josh, what’s new” when I walk in. Domain-level targeting is currently the best way to replicate that community level interaction online.

The future of online behavioral targeting, regardless of niche, likely boils down to two basic, general principles. Consumers don’t want someone following them around from store to store; but they don’t mind a personal greeting when they walk in.

Fresh out of college, and with only traditional marketing tools under my belt, I started at Knotice a couple of months ago with only a little bit of knowledge about the digital marketing world. In my first blog meeting, everyone started tossing around the term behavioral targeting, a term I wasn’t completely aware of. The end result is this blog post, and a series of future posts, intended to help others that are new to this space and are afraid to ask questions.

You may be asking yourself, what exactly is behavioral targeting and how does it affect me as a marketer? I did a bunch of research and here’s what I found.

First, there are two different types of behavioral targeting, which are very different from each other. There is onsite behavioral targeting and network behavioral targeting. Both have their respective advantages and disadvantages. Onsite behavioral targeting is when a company collects data for a specific user only on their site. The company then takes the data they collect and uses it to post more relevant offers to that user while they’re on the site. For example, an eCommerce company knows the past purchase history of a customer, and offers complementary products when they return to their site.

Network behavioral targeting is when a company collects a user’s data across an unlimited number of Internet sites. This means that they track you no matter what site you’re on and then serve you ads and offers all over the Internet based on your past online activity. For example, you visit several different eCommerce sites in search of horse attire. Then when you go on to a site like Yahoo, you’d see ads related to horses; or, on a site like Ebay you’d only see content that relates to horse gear when you first hit the homepage.

Recently, there’s been a lot of concern among consumers about behavioral targeting. I’m not an expert, but it seems like onsite targeting is less invasive and creates less “ad noise.” I can see how some consumers see network behavioral targeting as an online stalker. To me, onsite behavioral targeting is like a sales person making suggestions to me.

Here are a couple articles I think are great for beginners to find out more about behavioral targeting and how marketers are utilizing it:

http://www.emarketer.com/Article.aspx?id=1006362&src=article1_newsltr

http://www.clickz.com/showPage.html?page=3630107