Google and Behavioral Targeting

Google, so far, has refrained from behavioral targeting. But I think it is about time and it is the logical next action for Google to start offering Behavioral Targeting to its advertisers and publishers. Yahoo and MSN are both testing their Behavioral Targeting capabilities; their Behavioral targeting depends on the user data generated on their own sites. Tacoda and Revenue Science built the concept of network first and then are recruiting publishers to participate in the networks. Google is taking all together a new route. It is busy putting its footprint all over the web. These footprints will help Google build the largest and the best Behavioral targeting Ad network. Google already has publishers (Google Search, Content Network, You Tube) and advertisers (Adwords and PPC). Visitor behavior will come from various Google applications which are everywhere on the web. Google knows more about the user on the web that any other company knows. Google is every where (almost) on the web.
Let’s start from Google Search. Via user’s search keywords and key phrases Google knows what the user searched for, how many times she searched, which sites she visited, how many times and what time of the day she searched. Google might not know the visitors name but knows the visitor via anonymous cookie.
When a visitor arrives at any site from Google search chances are Google will be present there in form of Adsense, Adwords, Google Checkout or Google Analytics.
Even if a visitor by passes the Google search and uses some other way (yahoo search, live search, bookmark, by directly typing in the URL or any other way) chances are she will visit a site which has Google in one or more of above mentioned form.
Google Adsense/Adwords – A visitor who clicks on an Adsense Ad reveals a lot of about her preferences. Just like search Google knows, Google knows which sites (products, offers) the visitor is interested in. How many times the visitors clicks on the ads and what types of ads she clicks on.
Gmail – Google know what emails a user gets, it knows the content of the email, just look at all the ads that show up when you are reading your email. Even if Google does not have the users physical address it knows how to reach her.
Google Checkout – Google knows what a user buys, where she buys from, how often she buys and voila by using Google checkout she just gave Google her name, address etc.
Google Analytics – This is the one of the best tool (as far as behavioral targeting is concerned) Google has put on the web. Not only will it tell Google which sites the user visits, it will also tell Google where she visits them from, what pages she looks at , how long she stays on which site, what she buys, what keeps her engaged and what does not and list goes on.
You Tube, Blogger, New alerts and several other Google products provide will further enhance the data set Google has.
Google Analytics, Google Search and Adsense is where the majority of the data and the power of the network will come from. Aggregated data of all the applications will provide such a rich set of that that within 2 – 3 clicks Google will know weather user is a good prospect for a particular offer, product, service etc. or not.
I think it is a matter of time when Google start connecting the dots and announce it’s entry into Behavioral Targeting. They might call it something else but at the core it will be leveraging the visitors’ behavior all across the web to better target ad on its network.

Targeting Cart Abandonment by Email

Today I read an article called Four Ways to Improve Marketing ROI Through E-mail by John Rizzi, CEO of e-dialog. This is a good article for those who are trying to determine how to collect email, learn from email marking and email effectively. In his last point he says “Use Behavioral Targeting” to convert abandoned carts. He suggests using incentives to bring customers back to complete the cart they had abandoned. This is a great idea but I want you to be aware of following two issues before you jump into it.

1. Lack of Email Address: If you don’t have an upfront email collection process it is very likely that visitors (customers) will leave even before they give you their email address. If that’s the case then you won’t have any email to target (You can still deploy anonymous on-site behavioral targeting. Check out my article on behavioral targeting).
   If you decide to put email collection up front it might cause cart abandonment rate to go up. You have to provide a very good reason to your customers on why they should provide you email even before they started buying anything or checking out. Like any other change on the site, I suggest conducting A/B testing before you start collecting email addresses for all your customers. If the tests do not show desired result you might be better off with on-site anonymous behavioral targeting.
2. Backfiring of incentives: Let’s assume you have the email address and are ready to send an email incentive. As you already know the word spreads very fast these days. Most of your customers (visitors) will find out about your offers which could ultimately result in two outcomes:
   1. If the incentive is not too enticing (such as free shipping) your customers (even regular customers) might find out about it and start abandoning the cart in anticipation of receiving that offer or they might just use the coupon or offer code given to them by somebody on the internet.
   2. If the incentive is too good (such as $10 free for any purchase over $5.00, not sure why would you do that but I have seen companies giving free money just to get users to signup), the word will spread sending new customers to your site. So be prepared to handle the amount of traffic this viral marketing will generate and a possible bankruptcy.
      Appendix A shows what happened to Starbuck when they sent out an e-coupon to limited number of employees (or that’s what Starbucks thought).

So should you provide incentives to bring back customers who have abandoned carts? Yes I think so but think about all the pros and cons before you jump into it. Below are some of the steps that you should include into your process for using email incentives

1. Select a sample (say 20%) of visitors, who abandoned the shopping cart, who will receive any offer (I am assuming you have already created and tested a process for upfront email collection).
2. Test different offers within this selected group. Testing will show you which offer works and which ones don’t.
3. You can use more behavioral data (and I encourage you to do so) to determine what offer will make sense to which visitor segments (create few manageable segments so that you can stay focused). E.g. A customer who abandoned at shipping step might be more interested in free shipping than a user who added products to the cart but then left without clicking on the final checkout button (provided the customer has given you the email address), a 10% off coupon might be a better offer for this customer.
4. Unless you purposely want to engage in viral marketing, make sure coupons and codes can only be used by those for whom they were intended for and for specific period only. Also don’t forget to configure your web analytics tools properly so that you can measure effectiveness of these offers.

Note: If you provide users the same kind of incentives 2-3 times to a customer then he/she (most of them) expects it every time.

Appendix A: Starbucks Lawsuit
“Starbucks e-mailed the grande iced beverage freebie to a limited number of employees in the Southeast on Aug. 23, with instructions to pass it on to friends and family.
The forwarding turned into a frenzy as the coupon landed in thousands of inboxes and on Internet message boards – forcing the chain to reject scores of coupon-touting java lovers pouring into stores for the perk.” Source: ocregister.com