Behavioural Targeting

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Modern-day pricing is so much more than a numbers game. When thought about correctly, it’s a powerful way to build your brand and drive more profits. 

But how do you access the full power of pricing? The key is to understand the psychology that goes into a pricing strategy, and this article is a perfect place to start.

To continue our series of articles about different pricing strategies, in this article we’ll discuss what behavioural targeting is, how it works, and what you need to build a great behavioural targeting strategy.

What is behavioural targeting?

Behavioural targeting is a type of segmentation that utilises information about a website visitor or app user’s past behaviours to guide advertising insertion. It combines technical and geographical data of each visitor with other available habit history, including website actions, search history, preferred categories and more. 

All of this information is synthesised to create a behavioural profile of the user that is as complete as possible and can be used to initiate personalised marketing. Targeted pop-ups, offers, ads and push notifications can boost engagement and time spent on the page, since they are tailored to each individual and what they are predicted to be interested in.

Personalisation is of high importance to today’s shopper: Salesforce research found that two-thirds of consumers “expect companies to understand their unique needs and expectations”, while more than half (52%) expect all offers to be personalised. Behavioural targeting is one route to more effective personalisation.

Benefits of behavioural targeting

Using behavioural targeting in e-commerce has a number of benefits, including:

  • Better personalisation and relevance: Behavioural targeting allows e-commerce businesses to deliver personalised content and relevant recommendations based on users' past behaviours and habits, enhancing the overall user experience.

  • Improved conversion rates: When marketing efforts and product suggestions are tailored to match individual preferences, businesses achieve higher conversion rates and increased sales.

  • Enhanced customer engagement: Behavioural targeting engages customers in the long-term with relevant offers, promotions and reminders, increasing customer loyalty and repeat purchases. Remarketing can also be used to re-engage customers who dropped off at some point.

  • Higher ROI on advertising spend: Advertising without proper targeting is wasteful and ineffective. E-commerce companies can optimise their advertising budgets by reaching the most relevant and interested individuals, maximising ROI.

  • Reduced cart abandonment: By identifying patterns in users' behaviour, such as browsing history and cart activity, e-commerce platforms can implement retargeting strategies to remind users about their abandoned carts, increasing the chances of completing a purchase.

What is the difference between behavioural targeting and contextual targeting?

Contextual targeting is an advertising strategy that places ads on contextually relevant websites and pages. For instance, if a user is browsing a website that offers gardening tips, contextual targeting could target them with ads for gardening tools. 

While behavioural targeting is a strategy based on past behaviours and habits of individuals, contextual targeting uses the context of the website a user is on to target them with relevant ads. This difference means that behavioural targeting requires consumer data, as ads and other marketing tactics are based on them as an individual versus the web page. Contextual targeting doesn’t require consumer data; only information on the website itself.

Data sources for behavioural targeting

There are several types of data that can be used for behavioural targeting, all of which enable businesses to make advertising and other marketing methods more personalised:

  • Website behaviour: Data collected from users' interactions on the e-commerce website, including pages visited, time spent on each page, search queries, clicks and navigation patterns.
  • Social media behaviour: Data derived from users' interactions with the e-commerce brand on social media platforms, including likes, comments, shares and click-through rates on social media posts and advertisements.
  • Purchase behaviour: Information gathered from users' past purchases, such as the types of products bought, categories preferred, frequency of purchases, average order value and purchase history.
  • Campaign engagement: Data obtained from users' interactions with marketing campaigns, including email opens, clicks, conversions and responses to promotional offers.
  • App engagement: If the e-commerce business has a mobile app, data can be collected from users' activities within the app in much the same way as on a website, including product views, add-to-cart actions, app navigation and in-app purchases.

How does behavioural targeting work?

Here’s a look at how behavioural targeting actually works for e-commerce businesses, from the first pieces of data to delivering a personalised ad:

1) Data collection
Various data sources, such as website interactions, purchase history and campaign engagement, are collected and aggregated to create a comprehensive dataset of user behaviour, often using cookies or tracking mechanisms.

2) User segmentation
The collected data is analysed to identify patterns and segments of users with similar behaviours and interests. This segmentation allows businesses to group users based on their preferences, browsing habits, purchase behaviour or other relevant factors.

3) Profile creation
User profiles are created based on the segmented data, combining information about demographics, interests, browsing history and purchase behaviour. These profiles provide a holistic view of each user's preferences and past actions.

4) Targeting strategy development
Using the created user profiles, businesses develop targeted strategies to engage and influence users, which can be continually delivered to the proper consumers when a certain behaviour trigger occurs.

5) Content delivery and optimization
The targeted content, such as personalised recommendations, ads, pop-ups or email campaigns, is delivered to the appropriate user segments through channels like their website, email, social media, etc. Over time, the effectiveness of the targeting is measured and optimised based on user responses and conversions.

These steps enable e-commerce businesses to leverage behavioural data to understand their users better and deliver personalised experiences, ultimately increasing engagement, conversion rates and customer satisfaction.

Behavioural targeting example in practice

A user visits the e-commerce website for Nike and searches for a specific type of running shoe. The site captures this data, and the user is tagged as "interested in Nike Invincible 3 running shoes." At this point, the user could leave the site without completing the purchase, but through behavioural targeting, Nike’s site can retarget the user, showing them ads for the Invincible 3 running shoes across the web. The company can also send email campaigns like “Don’t forget what’s waiting in your basket” or discount offers to purchase the shoes.

The retargeting efforts remind the user of their interest, driving them back to the e-commerce website to complete the purchase.

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