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10 Stats to Know About Behavior Marketing

  • 25 July 2017
  • Dean Schmid

Behavior marketing is right at the center of the inbound philosophy. Personalizing the funnel for each and every prospect, customer, and lead, based on hard data is a marketing trend that if you ask me, should already be considered best practice.

This has all come about due to advances in technology. Now we have access machine learning, big data, and powerful algorithms that let us collect data on a grand enough scale that we can target people based on visitor profiles and their behavior.

As a general rule, the more you know about your customers the more money you will make, and that is why companies are leveraging behavioral marketing.

10 Stats to Know About Behavioral Marketing

1. 76% of Businesses Fail to Use Behavioral Targeting

Behavioral targeting, another name for behavioral marketing, is a widely adopted marketing strategy, but that doesn’t mean all who are using it do so effectively.

In an Adobe, sponsored Razorfish study that highlighted the pain points and shortfalls experienced by marketers trying their hand at behavioral marketing. There is no doubt that companies have access to behavioral data

For an e-commerce store, behavioral marketing lets the store react to previous purchases and other behaviors, like the number of visits, time spent looking at a certain product, and spending power.

What does this have to do with the 76% of businesses not using behavioral targeting?

I would like to bring another stat into the midst. 89% of organizations intend to compete primarily on customer experience. Leading research has found that customers are willing to spend more, repeat buy, and promote businesses they have a good experience with. Behavioral targeting gives you a leg up on the competition, and in the hyper-competitive online world that has never been more important.

2. In a poll of enterprise contact centers by Deloitte, 82% view the customer experience as a competitive differentiator, and view accuracy and quality of information provided (82%), as well as ease of interaction (73%), as the most important attributes of a quality customer experience.

The message is simple enough. If you want to provide a quality customer experience, you need to provide the right information at the right time and it needs to be easy to use.

“Emerging technology plays a big role in firms' profitability and their customers' digital experiences. Yet enterprise architects struggle with the speed of new technology delivery and constantly changing business strategies and requirements,” I got that from a Forrester report, and I think it is extremely relevant to this statistic by Deloitte

The companies on the front line of behavioral marketing are using software that builds profiles of customers so that the right information can be shown to them at the right time. It is kind of like anA/B split test but with all the content on a website.

3. 73 percent of consumers surveyed by Pew are not in favor of receiving personalized advertisements at the expense of stored searches in search engines.

Behavioral targeting is at the center of an ethical debate. It is impossible to talk about it at length without someone bringing up the ‘what about privacy debate’. Tracking online behaviors just sits wrong with people. With browser cookies and mobile advertising identifiers, you are already being monitored and categorized online, but there has always been a lot of push back. As behavioral marketing becomes more popular, companies will have to make sure they are respecting their user’s privacy.

73% of consumers is a large number. Martin Glanert author of wrote a great article about the issue and features an infographic by Loeb & Loeb. The infographic shows that during the past 4 years, 10 million users have visited the opt out website of NAI and close to 1.75 million people have opted out of cookies.

4. According to a study carried out by Verve Mobile, geo-targeted mobile ads performed over 50% better than the non-targeted campaigns.

Verve Mobile found that advertisers saw an increase in ad performance upwards of 50% by simply showing people ads relevant to their area with geo-targeting. This is very basic targeting, but it aligns with how we use our mobile devices. Just think about how popular mobile navigation app Waves has started showing native advertisements for businesses that are nearby.

The Verve study was performed in 2012 and reviewed over 2000 mobile campaigns across its location-based platform. This isn’t current data, but just going off how we use our phones now, it is hard to imagine that location ad performance is doing any worse.

“66% of marketers believe location-based advertising is the ‘most exciting’ mobile opportunity for 2016, according to a recent IAB UK study

5. User segmentation for ads delivery can improve CTR by as much as 670%

A study by Microsoft Research Asia initially achieved a 670% increase in CTR. Not happy with the incredible 670% they used more advanced behavioral marketing techniques, such as novel user representation approaches and novel user segmentation algorithms. This got their CTR up to over 1000% what they were seeing with regular display advertisements. Although a little dated, it is a great report that looks into the difference between targeting with clicked pages or targeting with search quires, and it really breaks down behavioral marketing.

There aren’t many changes you can make to an ad that is going to increase click-through rates by such massive percentages, but behavioral marketing just might if implemented correctly.

6. 56.68% Increase in Open Rates for Behavioral Targeted Emails

Marketo is a leading provider of marketing software who made a name for themselves developing innovative tools. Their behavioral targeting, they called it lead nurturing, carried them to the forefront of the industry, and I think blowing on the embers that sparked the business world’s obsession with behavioral marketing.

The software would place a lead on a track, and that would determine how they were contacted or shown content later. Say, for example, they enter the top of the funnel on a social platform and then leave their email address, Marketo would choose to contact them via social because that is the platform they favor. A simple premise, if they are interested in social, send them socially. If they engage with a lead magnet send whitepaper and informative content.

7. It costs between 4 and 10 times more to acquire a new customer than it does to keep an existing one.

This is a common stat that you will see repeated in all disciplines of marketing. The exact numbers vary, but there is no denying that it is significantly cheaper to keep ‘em. Our Social Times says it’s 70% cheaper to retain a customer than acquire a new one.

Why does this have to do with behavioral marketing?

Behavioral marketing is an effective tool for building customer advocacy and even retargeting old customers. The extra cost of behavioral targeting is offset by the increase in revenue that repeat customers and advocates can bring you. Now you are probably thinking but that’s more CX (customer experience) than behavioral marketing. It is, but there is a lot of crossovers. I have mentioned before that behavioral marketing is an effective tool to improve on the customer experience by showing people the content that they want to see when they want to see it.

8. Only 8% of internet users account for 85% of clicks on display ads.

We aren’t all online shoppers waiting to fall down a marketer’s funnel. Display ads work better on some people than others, because people are all wired a little differently. There is no behavior targeting for someone who refuses point blank to click on display advertisements. Now we are seeing software that recognizes people like that and doesn’t show them ads unless they are exhibiting strong buying signs.

The advantage of this kind of behavioral targeting is you save a lot on CPM and CPC. You aren’t wasting your impressions on these non-clickers.

9. Over a third of users were discouraged when seeing the ad after purchase, and nearly 50% who were discouraged by seeing the ad on an unrelated site.

Retargeting is a cheap advertising trick that yields a pretty good return on investment. Someone has come to your site and show intent if you just chase them around the internet with advertisements they will make a purchase? They might, but you are more likely to annoy a lot of people.

InSkin Media and RAPP Media conducted a study to determine how pervasive users found ad retargeting. The results weren’t encouraging.

seen ads

It is pretty cut and dry. Customers want to see advertisements at the top of the funnel, conduct their research, and then never see that ad again. The study found that advertisements on unrelated sites were the most irritating for customers.

“For women, viewing a Clinique ad on Marie Claire achieved a nearly 90% positive rating rather than seeing that same ad on Instructables,” Kissmetrics.

It might annoy a few people who will never transact with your site, but you are marketing for a business. The bottom line if deaf to complaints that weren’t going to spend money, so you need to take a look at your own research and identify if your annoying people is discouraging sales, or you are converting leads that fell out the funnel. It can be a fine line, walk it with grace.

10. 37% of users saying they were more likely to click on an ad if it’s on a site they trust.

When using behavioral targeting in your advertisements you must also take measures to display your advertisements on sites with authority. Nigerian princes learned this lesson a long time ago. It doesn’t matter how good the offer is if it isn’t on a platform people trust. This is relevant to behavioral marketing because it shows how our distribution is as important as the advertisement itself. If you are programmatically distributing your ads, then you need to make sure there are no dodgy sites that will soil your reputation.

Behavioral targeting software is getting better at identifying the sites that people trust and programmatic platforms have behavioral marketing functionality build into them. I think that big data has kind of diluted behavioral marketing into all other marketing disciplines and segmenting an audience based on how they behave on your site and others will soon be as common as a buyer’s persona.

About Dean Schmid