Behavioral Targeting: Why Every Ad Server Should Implement It

Jane O'Hara
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Behavioral targeting, also known as audience or interest targeting, is an ad targeting feature that tailors messages to users’ previous actions.

As you build your own ad server, behavioral targeting is a targeting feature you’ll want to consider.

This article explains what behavioral targeting is, how it works, why it’s beneficial, and why you should incorporate behavioral targeting into your ad server.

What is behavioral targeting, and how does it work?

Behavioral targeting uses previous platform behaviors to place users in segments that advertisers can then target.

Unlike demographic targeting, which makes assumptions based on a user’s age, gender, and the like, behavioral targeting leverages users’ past actions to serve ads more likely to match their interests.

For instance, a travel site like Expedia can use their first-party data on past behaviors - such as users’ pageviews, clicks, and searches - to create audience segments like “Hawaiian vacation planners”, “budget travelers”, or “spa hotel lovers”.

Expedia wouldn’t share PII or user data directly with the advertisers, but they would build audience segments that the advertisers could target, at premium rates.

For example, maybe Expedia charges $5 CPMs for site-wide impressions. But for $10 CPMs they let advertisers target just users in the “Hawaiian vacation planners” segment. A Honolulu-based rental car company, then, may be happy to pay this premium to reach their target audience. In doing so, Expedia has doubled the monetized value of those impressions.

Here’s another example: let’s say you are Chief Revenue Officer at a car research site. You are looking for ways to drive more money from the ads you show, so you add behavioral targeting options to your ad platform, including “Honda Browsers” - which includes all users that have looked at Honda cars. Then, you let advertisers such as Honda and Toyota target these people whenever they are on the site again - even if they are browsing, say, Fords at the moment. Honda and Toyota will likely have no issue paying a lot more to reach this audience, thereby driving incremental revenue for you.

What are the benefits of behavioral targeting?

There are three key benefits to implementing behavioral targeting into your ad server:

  1. Adding this feature could generate more revenue, as advertisers will pay more to reach their target audiences
  2. It offers a better user experience, as ads are based on known interests
  3. It gives you feature parity with other ad platforms

For these reasons, we believe behavioral targeting is a must-have feature for your ad server, as it offers multiple benefits: an opportunity for increased revenue, along with better experiences for your users and advertisers.

How is behavioral data collected and enabled?

For behavioral targeting to work, you’ll need some type of persistent ID tied to each user, so you can retarget that individual when they are back on your site/app. For instance, within apps this could be the Mobile ID like the IDFA. On browsers, you could store an ID in a first-party cookie, which may be tied back to a specific username in your database.

Next, you would need to track your users’ behavior on your site/app and make a note of any specific triggering actions in a data management platform (DMP) such as Adzerk’s UserDB.

Such triggers could include:

  • Specific pages / categories they have visited
  • Web visit frequency and recency
  • Specific products they’ve viewed or purchased

For instance, your DMP may have a field that tracks the number of times each user has logged in in the past month. Or, say, a binary field called HondaView1 that becomes a 1 if the user has looked at a Honda car in the past month.

Finally, you need to tie this data with your ad server, so that:

  1. You can easily create campaigns targeting info that’s in the DMP
  2. At time of ad request the ad server checks the DMP to see if a user falls in a specific segment or not

For example, if you wanted to allow advertisers to target Honda Viewers, you would need to:

  1. Have an ability for a given campaign/flight/etc to target the DMP field. This may include setting up some custom targeting like Where HondaView = 1
  2. Include the persistent UserID in every ad request, so you know who each user is
  3. Have the ad server, at time of ad request, check the DMP to see what data is tied to that user. If it sees that User123’s HondaView parameter is a 1, then now any campaigns targeting HondaView=1 are now eligible to win and be shown.

Sound complicated? It is! This is partly why few ad platforms and publishers add behavioral targeting to their ad platform, even though there’s a lot of value to it. Fortunately for Adzerk customers, behavioral targeting features are built-in and enabling it takes just a few hours.

Do other ad platforms offer behavioral targeting?

They do, so advertisers may expect the ability to target consumer behavior on your platform.

Platform Do they offer?
Google Ads Yes
Pinterest Yes
Snapchat Yes
Facebook Yes
Amazon DSP Yes
DSPs & Ad Exhanges Yes
LinkedIn Yes
Twitter Yes
Quora Yes
Microsoft Ads Yes - limited to retargeting
Reddit Yes
Amazon Sponsored Products No
eBay Promoted Listings No
Etsy Promoted Listings No

Facebook allows advertisers to include users who match at least one of multiple behaviors, such as Digital Activities and Event Interests:

Twitter also offers behavioral targeting, such as this audience segment based on past beverage purchases:

Finally, another example is Pinterest, which has a ton of Behavioral Interests for advertisers to target.

Does behavioral targeting comply with GDPR and CCPA?

Yes and no. Under both laws, persistent IDs are considered PII, and you would need to describe what you are doing in your privacy policy. Where it gets a little grey is that you aren’t sharing this PII directly with advertisers, so there’s no selling/breaching of user data.

That said, to comply with the GDPR, you will most likely need to get consent from EU residents before building user profiles on them.

With the CCPA, though, there is no explicit rule against using PII if you aren’t selling it - meaning you can allow advertisers to buy against profiles you created using first-party data. Since you’re not sharing or selling PII, Californians cannot opt-out of this data usage.

So, you’re saying I should add behavioral targeting to my ad server?

We are! You can generate more revenue with your ad server by offering advertisers more ways to reach their target audiences.

Already using behavioral targeting or thinking of building this feature? Share your experiences on Twitter.

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Jane O'Hara

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