Behavioral Targeting and Dynamic Content creation

Behavioral Targeting and Dynamic Content Creation

2

Introduction

Access to technology and big data are dramatically changing the way marketing works today. The one-to-many model is being replaced by a one-to-one model, where marketers can virtually customize their offerings to consumers. Behavioral Targeting (BT) focuses on providing every user with a relevant message based on the advertiser’s awareness of the customer’s needs, interests and preferences.

With several years of BT experience, AdPeople can provide insight into the creative development, cost- and labor-efficient approaches available to

maximize this marketing strategy. We offer our clients guidance in setting up the technology stack, choosing media and tech partners, data manage-ment and feed setup and management. Additionally, we offer hosting and asset management.

Our experts can create the volume of messages needed to effectively target individual users with the most relevant messages while keeping offers and messages up to date. In one example, our BT strategy delivered a conversion rate of 27X and a 7X return on ad spend.

“Behavioral targeting improves the process of generating traffic and achieving conversions because it customizes the customer experience and allows firms to maintain consistency across all customer touch points.” — Forrester Research

• What is Behavioral Targeting (BT)? .............................................................................................. 3

• Retargeting – a form of BT .......................................................................................................... 5

• What are the benefits of BT?....................................................................................................... 6

• How does BT work? ................................................................................................................... 8

• Creative Relevance ....................................................................................................................11

• Dynamic Creative/Content .........................................................................................................12

• Case Study – Dell Global Behavioral Targeting Program ............................................................17

• AdPeople as BT Partner and Facilitator......................................................................................18

• Want to know more? ................................................................................................................. 20

Contents

3

What is Behavioral Targeting?

Behavioral Targeting (BT) is a technique used by online publishers and advertisers to increase the effective-ness of their campaigns. It uses information collected on an individual’s web-browsing behavior, such as the pages they have visited or searches they have made, to select the most relevant offer to present to that user.

Using advanced tracking technology, analytics, audience acquisition and segmentation, marketers can significantly increase the effectiveness of their marketing efforts and realize dramatic savings on their media spend as well as improved return on investment.

Behavioral Targeting provides users with a relevant message based on the advertiser’s knowledge about the customer’s needs, interests and preferences.

4

8 Forms of Behavioral Targeting

There are eight forms of behavioral targeting outlined below:

RetargetingBased on user’s previous visits on an advertiser’s website, relevant ads will be served on sites where the advertiser has banner placements. When the user visits an advertiser’s website, a cookie (small code snippet that contains and can record information) is set in the user’s browser, and the last product(s) or page(s) the user visited are recorded.

The next time the user visits a publisher site where the advertiser has an ad placement a tag (a code snippet designed to either send a signal to the ad server or read or write information to a cookie) reads the information from the user’s cookie, sends the info to the advertisers product database, and – using predefined rules - the most relevant offer is selected and displayed.

Contextual Targeting Ads are specifically targeted by content, such as an ad for sporting goods shown on ESPN. This can be done through specific buys or through semantic targeting where pages and sites are analyzed to determine the content, and then ads are served that match that content. (This is done by humans and, more recently, by machines.)

Audience Targeting This is an overarching approach that matches ads to specific audiences. Various factors are used to track and analyze audiences including demographics, behavior, devices, geography, day, time, etc. In addition to the above criteria, audience targeting also attempts to determine the audience’s attitude towards key topics and intent to perform a desired action (registration, purchase, social sharing, etc.).

Demographic Targeting In this scenario, users are targeted based on gender, age, income range, ethnicity, etc. This type of data is usually only available through registration information or by inferring these criteria based on geography (IP zone), sites visited, content viewed, devices used and purchases made. (The IP Zone initiative is a demographic database that maps online traffic to qualified, target-ready audiences, yet is also committed to protecting user privacy.)

Geographic Targeting Targeting users based on location information including country, city, postal code, and other locale information. This information is often derived from registration information but can also be inferred based on users’ browsing behavior, IP zone, etc.

Keyword Targeting Targeting users based on keywords including search terms, hashtags or keywords used on sites such as Twitter and Facebook. The ads may also appear on sites such as Twitter, e.g. as “Promoted Tweets” or on Amazon as the products shown and recommended.

Time-Based Targeting Essentially ‘day-parting’ online, these ads are targeted based on daytime or weekdays.

Emotional Targeting This fairly invasive methodology targets users based on their emotional states using information from web cams, Microsoft’s Kinect or similar devices. A user’s emotional state can be assessed based on facial expressions, speech patterns and gestures. It can also be done using semantic recognition on users’ communication such as IMs, Texts, Tweets, Facebook posts, etc.

5

Retargeting – a form of BT

Retargeting is the most commonly used form of Behavioral Targeting. Here’s how it works:

User A

User A

1. A cookie is placed in the user’s browser when visiting the advertiser’s website which records the pages (or last page) visited on that website.

2. A record of the cookie data and additional info about the user is stored with the ad and applied to audience segments.

3. When the user visits a publisher website with a placement from the advertiser, the cookie information is read and submitted to the ad server. Based on predefined rules including the audience segments that the user has been assigned to the most relevant message from the advertiser’s offer database is selected, and the ad is served to the user on the publisher site.

4. User clicks the ad and is redirected to the advertiser’s website where they can complete the purchase.

110110110100 110100110011 011011011000

Cookie

$XXXBUY NOW >

NEWS SITE

BRAND WEBSITE

Ad Server/ Offer Database

1 1 2

3

3

2

3

4

4

3

6

BT Beyond Retargeting

Messages can be targeted based on a range of characteristics and information about the user that is either directly recorded (registration), derived by tracking browsing behavior or by tracking specific data points, such as geo-location or devices used.

Marketers often combine all available data points to not only select the most relevant message but also target the user at the right time and on the right device/platform. Currently, BT is mainly used with

display ads (online advertising banners) and email, but marketers will be able to deploy BT programs for TV, Digital Out of Home and other related media channels within the next few years.

The omni channel presence and understanding will be key to getting a full picture of the users. The data points captured and used are essential to continuously improve the ad relevance and timing.

What are the Benefits of BT?

Improved Advertising Efficiency

Improved Business Results

Improved Customer Experience

• Increased Click Through Rate (CTR)

• Increased conversion• Increased Return on

Investment (ROI)• Lower customer

acquisition costs

• Increased relevancy of advertising messages seen by individual users

• Messaging based on user interest and preference

• Decreased waste• Increased customer

engagement

BT provides important and measurable business results while improving the overall consumer experience.

7

Performance Boost Through BT

BT can significantly improve ad performance by eliminating waste, such as money spent on impressions displayed to users who have never shown any interest in the advertiser or their offerings. Generally, the more specific the offer in an ad the less waste there will be. The generated traffic may have a smaller volume than a more generic ad, but the traffic will convert better. Results can vary dramatically based on the level of targeting that was used prior to using BT:

• Advertisers and agencies have reported performance lifts of up to 29 times the conversions compared to untargeted ads.

– Average lifts will be lower but are often well within the 4-12X range.

• By adding targeting ‘layers’ such as cross-plat-form retargeting (e.g. social and non-social), advertisers can achieve additional lift of 2-3X in campaign performance.

• Retargeting performs equal to or better than Search.

The performance boost for vehicles other than online display advertising is equally significant:

• Relevant emails drive 18X more revenue than broadcast emails (Jupiter Research).

• Leads that are nurtured with targeted content produce a 20% increase in sales opportunities (Annuitas Group).

Performance lifts of up to

conversion compared to untargeted ads

29xAverage lifts well within

conversion compared to untargeted ads

4-12xTargeted content produces

increase in sales opportunities

20%

8

How Does BT Work?

Today’s digital media landscape can be quite complex. As the graphic below demonstrates, there are hundreds of companies providing services – from Agencies to Data Management Platforms (DMPs) and Data Aggregators.

Most BT media is acquired via programmatic buys using real-time bidding platforms and ‘big data’ (e.g. DMPs). In addition to traditional Publishers,

AdNetworks and ad servers, a number of new, mostly technology-focused services have appeared. The ‘Technology Stack’ is the key to implementing modern buying or targeting tactics. Some of the services include: Ad Exchanges, Demand Site Platforms (DSPs), Dynamic Creative Optimizers (DCOs), Yield Optimizers and DMPs.

The Technology Stack and Partners

© LUMA Partners LLC 2014

Performance

Video / Rich Media

Targeted Networks / AMPs

Horizontal

Vertical / Custom

Mobile

Exchanges DSPs

Publisher Tools

Data Suppliers

Ad Servers

DMPs and Data Aggregators

Measurement and Analytics

Creative Optimization

Agency Trading Desks

Ad Networks

Media Planning and Attribution

Verification / Privacy

Ad Servers

Retargeting

Media Mgmt Systems and Operations

Sharing Data / Social Tools

SSPs

DISPLAY LUMAscape

MARKETER

PUBLISHER

CONSUMER

3"

Tag Mgmt

Agencies

Denotes acquired company Denotes shuttered company

The Digital Media Landscape Today. Source: LUMA Partners, 2014

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Key Players in the Process Flow

There are many levels and combinations of online banner creation and media buying. See examples below:

1. Standard: A+B+C Standard banners are created. Media is bought

on a number of known sites. Banners are uploaded to the ad server. Number of views, clicks and usually conversions are measured.

2. Creative optimization: A+B+D+C Multiple banners are created. Media is bought

on a number of known sites. Banners and placement are optimized but not in real time and only for KPI tracking. Optimization may be done by computer and/or human.

3. Behavioral targeting: A+B+D+C+F Multiple banners are created. Media is bought

on a number of known sites. Cookies in the user’s browser are used to select the most relevant banner for the user. Selection happens real-time following predefined rules.

4. Dynamic ad creation: A+B+D+G+C+F Cookies are used to select the most relevant

offer or message, and the corresponding ban-ners are created dynamically in real-time.

5. Real-Time Bidding: A+B+D+E+C+F Cookies are used to select the most relevant

banners, and the banner served is the one with the best bid on a range of sites. Can also be combined with 3 and 4.

*Ad Server/DCO: DCO (Dynamic Creative Optimization): Requires enhanced abilities to capture and process data and apply rules to optimize creative and ad performance. DCO can also be an ad server or it can work in addition to an ad server. So B is only optional when D is included. **Decoupling of creative and production is not uncommon. For simplicity, here production and creative are referred to as the “creative agency”.

Ad Server*

B

AdServing

DCO*

D

Creative Optimization

Publisher(s)

C

Publishers

DSP Ad Exchange

E

Real Time Bidding

User

F

DynamicCreation/feed

G

Creative Agency**

Media Agency

A

Planning, Creative Assets & Reporting

Marketer

User’s behavioral data is communicated to the DCO, DSP and AdExchange.

Based on the user’s tracking data and the best available bid, an ad is selected and shown to the user on the publisher site.

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Who is Involved in a Typical BT Setup?

Creative and Production AgencyAgencies develop creative strategy and campaigns. Responsible for designing and creating ads as well as content (copy, video, images, etc.). May advise clients and all other ‘players’ on solutions around creative, such as technical possibilities (e.g., rich media including video, messaging options, ad formats for different devices); often brief data feeds for offers or managing offer options (e.g., when pre-built).

Media AgencyThe Media Agency creates the media plan (and may make budget recommendations for media), negotiates KPIs for publish-ers and DSPs. Provides support in determining target audiences, etc. The Media Agency often interfaces with the creative agency to ensure that the purchased placements and the creative are aligned. They also receive the ads once they are completed and traffic the ads in an ad server’s platform to set a campaign live.

Ad ServersHosts ad files and serves them to the publisher’s placements. Provides 3rd party tracking, owns the ad serving platform where campaigns are set up and launched. Manages ad tracking and performance across DSPs, Ad Exchanges, DCOs and publishers. May also track other vehicles for the client for a more comprehensive view of marketing performance.

PublishersThe organizations that own and run the websites where the client’s ads appear (e.g. Hearst, MSN, WSJ, etc.). May work directly with the media agency or may work through Ad Exchanges, AdNetworks and DSPs.

Technology StackTechnology services providers that are often selected by the media agency or by an ad serving partner. They provide different services that are needed for Real-Time Bidding and Programmatic Buying which are commonly used for Behavioral Targeting. However, some of these services may be provided by the media agency or the ad serving company, so not all of these vendors are always needed:

– DSP: (Demand-Side-Platform) Media entities/systems that function as middlemen between advertisers and publishers for programmatic media buying. DSPs:• Use ads, audience segmentation information and budget

direction to optimize media buys by selecting publisher placements that match the intended audience segments.

• Optimize buys by eliminating lower performing publishers, placements or ad executions and emphasizing the strongest performing combinations.

• Often work for a number of advertisers. • Work with Ad Exchanges to manage the bidding process.

– Ad Exchange: Similar to a DSP but for publishers. Ad Exchanges receive real-time updates from publishers on available placements; they message these availabilities to the DSPs who pass the info to the ad servers where the most relevant message is selected and submitted to the publisher.

DCO (Dynamic Creative Optimization)Support Behavioral Targeting efforts by providing added tracking and decision-making capabilities as well as the ability to learn from tracked historical data for continuous campaign optimization. They are also known to provide a Real-Time Creative platform (RTC) that marries the science of programmatic media buying, upstream offer data and the art of creative. Other relevant partners:

DMP (Data Management Platform)Enables audience targeting based on a combination of in-depth first-, and third-party audience data; accurately target campaigns to these audiences across third-party ad networks and exchanges; and measure with accuracy which campaigns performed the best across segments and channels to refine media buys and ad creative over time. Allows marketers to improve their targeting based on large scale data from a variety of sources that are provided in actionable audience segments that can be retargeted effectively.

Real Time Bidding (RTB)How banner placements are sold and purchased, especially for programmatic buying; a publisher will inform the Ad Exchange or DSP that a customer matching several relevant segments is on the site, Ad Exchange informs the DSP who selects the relevant ad (based on info provided by the advertisers) and the best bid, then sends ad tags to Ad Exchange who sends it to the publisher’s site.

Programmatic BuyingProgrammatic buying is a new form of media buying where an advertiser works through a DSP and/or Ad Exchange and provides targeting directives (e.g. audience segments) and bid budgets. The Ad Exchange and DSP then run the ad when a matching placement on a publisher’s website becomes available within the budget of the advertiser (highest bid wins, similar to SEM).

It has been estimated that in 2014 programmatic buying increased by 52% to approx. $21B worldwide and $10B in 2014 to $20B in 2016 in the US alone.

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Creative Relevance

The opportunities for targeted and more relevant communication have increased dramatically due to the rise of real-time bidding, social media and continuously evolving tracking and data management capabilities. Simultaneously, it’s increasingly harder for advertisers to be heard through the clutter as there are more ads than ever, and many companies now use targeting techniques.

As a result, relevance is key to grasping the audience’s attention and triggering desired actions such as clicks, purchases, registrations, etc. Through tracking and data-driven marketing tactics it is now easier to target the most suitable audiences (based on interest, probability to perform a desired action, cost of reaching that audience, etc.) and to gather information about them, their location,

interests, purchase behavior and purchase intent for certain offers, and often even their progress in the purchase funnel.

While an attractive ad is important, having an offer message that is relevant is even more important. For each advertiser, the question becomes how many different messages are necessary to provide relevant messaging for the largest possible audience? In order to increase conversions, especially for purchases or actions that require more consideration from the user it is recommended to consider sequential messag-ing. For this approach one would create messaging sequences for users to guide them through the steps by providing messages that build on each other and often also provide alternative messages in case someone has seen an ad and not responded.

Dynamic Creative Development

Producing a large number of ads with specific offers, especially offers that change frequently, can be time consuming and costly. In fact, it can reduce or eliminate BT performance benefits.

The solution is Dynamic Creative Units, which are built as empty shells or templates specially designed to accept external content (e.g. from a data feed).

Today, dynamic creative is increasingly used for banners, websites and emails for efficient and timely updates. For example, live data, such as price or specific offers, can be updated without any change to the creative files. Creative is updated through the feed.

It can also be used for personalization. For example, on websites such as Amazon, landing pages and promotional spaces throughout the site are populated with offers that are relevant to the visitor (based on tracking data in the user’s browser or their Amazon account information, assuming the user is signed in).

Different content and offer options are stored in a database or data feed, and the creative is ‘assembled’ using the appropriate content and template when the ad is displayed to the user. The user can’t tell that the ad was only just assembled. If done right, it will look exactly like a pre-produced banner ad.

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Example of Dynamic Creative Process for Banner Ads

Copy

Tracked Info (Cookie)

Product information

Product specs

Other information

Price

Banner with specific Offer 1

Banner with specific Offer 2

Banner with specific Offer 3

Banner with specific Offer 4

Hosting

Data FeedOffer 1Offer 2Offer 3Offer 4

Ad Server

EmptyAd Unit

Hosting location or CMS for all assetsBuilt to accept dynamic content and hold content options with the correct formattingImpactful copy highlighting the offer/product/seller benefits plus assets (product images, logos, other graphics)Contains the copy and URLs of all assets that are loaded into the creativeThe ad server stores ad files, sends ad tags to publishers or ad exchanges It assembles creative from the template (shell) and adds the content (data feed)The Decision Engine uses script-based logic to select the most relevant offer or content based on predefined rulesTracks a user’s actions and behavior on the website

Hosting: Ad Unit:

Banner Content: Data Feed: Ad Server:

Decision Engine:

Tracking Solution(s):

1 Headline 2 Brand Logo 3 Product Image 4 Partner Funding 5 Model / Pricing 6 Call to Action 7 Background Color

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Example of dynamic fields in banner ad:

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Dynamic Content Types and Examples

Dynamic content can be categorized by how frequently or when it is updated (refreshed). For example, people differentiate between content that is refreshed periodically (e.g. daily, weekly, hourly) and so-called ‘live’ or ‘real-time’ content. There are other content elements that may not be updated at all during a campaign. Any campaign or website or other dynamic system encompasses more than one type of content. For example, a banner shows a brand logo that is fixed in the ad and is not dynamically loaded while a price in a bid tool is ‘live data’ as it is loaded at the time of visit and sometimes even during the visit. (e.g, the bid counter on ebay that shows the latest bid amount).

Example of Dell add periodcally updated

Fictitious example of airline ad with live content

Periodically updated contentIn this case the database (or feed) is updated periodically or when the source content is refreshed so that the latest offers and messages are available. The ad units can be pre-produced using dynamic systems in order to keep ad load times to a minimum. This is most commonly used for most types of merchandise.

‘Live’ content:For example, pricing for airline banners where users can enter dates and/or destinations to get the latest pricing. As flight prices change constantly based on a number of factors, only a system that updates the price or offers in ‘real-time’, at the time the ad is loaded can be used to ensure the current pricing is shown at all times. This methodology is technically more complex and mostly used for offers that change constantly (e.g., flight prices or stock prices).

Enjoy a Maui dream vacation.Airfare, hotel and rental car packages starting at:

Per person,Limited time offer.

$895

National Airlines

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Dynamic Content Types and Examples

RetargetingUse dynamic content to show users the most relevant offer based on items they have viewed on your website. It can also include additional offers that are deemed good matches or alternatives to the viewed items.

Through the dynamic nature of the ad, users will see the exact offer and (additional/alternative offers) that are relevant for them. It would be impossible to pre-produce all the possible combinations, especially if the product selection is large.

Example of Alienware retargeting ad

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Dynamic Content Types and Examples

Sequential Messaging / Flow MessagingThese are two very recent types of behavioral targeting. The principle is that a user’s interaction with the ad unit is tracked and messages that build on each other are shown with every new ad exposure. The message shown for each subsequent ad will be based on:– Did they interact and convert?– Did they interact but not convert? – Did they not interact?

This type of messaging and dynamic ad are often used for users who have placed items in their online shopping cart but don’t finalize the purchase. In order to incentivize the user, the ad unit can offer a discount or otherwise specialized offer if the user completes the purchase right away.

It is also used right after a purchase to encourage the user to purchase related items (e.g., the user bought a digital camera; the advertiser can offer a matching camera bag or memory cards).

Geographical Targeting / SegmentationFor offers where products and prices can vary by location, the user’s geo-location is used to determine where they are, then the correct offer is displayed. This is usually done using a mix of pre-produced (dynamic) content and live data.

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Stage 1 (User has not seen this ad before.)

Fictitious banners from retailer that need to differentiate product based on geography.

Stage 2 (User has seen and interacted with the Stage 1 banner. Next time they see our ad they will get this ad.)

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The Challenge

AdPeople was tasked with devising a solution that could be rolled out across the globe. Additionally, the agency had to develop creative that met Dell’s brand standards while remaining very flexible

and adaptable. Furthermore, complicated co-brand-ing requirements and translations across platforms and technology stacks contributed to the overall complexity.

Dell Case Study

Dell chose AdPeople to initiate a process for developing and establishing a BT program for any region and in any language. The goal was to streamline the program so that it could be rolled out quickly.

Worldwide launch of Behavioral Targeting and Retargeting Program

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AdPeople Solution

Our team addressed this challenge with the right tools, people and processes. We started by developing creative templates that were easy to refresh via the feed (colors, creative elements, backgrounds). We then established complex feed and template rules along with solutions to accommodate co-branding requirements. Additionally, we developed and adapted the creative assets and messaging to work with the BT program, ensuring it existed in various formats (Flash, static images, HTML5) for different ad-serving solutions.

A key part of our process was setting up unique asset management systems for product images, downloadable assets for users, video, etc. We also created an automated image conversion tool to generate hundreds of image sizes and formats with one click and smart testing structures to guide new creative designs and features

Creative

Example of one of the many banners used in the Dell BT program

Results

By establishing a strong global, cross-agency team and technology providers, we were able to guide new markets and roll out the process quickly and efficiently.

The results were dramatic. BT outperformed non-retargeted ads across all target audiences and regions, delivering 10X revenue with just 25% of the impressions. Dell enjoyed up to 27X conversion rate and 7X return on ad spend.

In addition, the results found that BT with dynamic/personalized messages performed high-er than non-personalized messages, delivering 5X return on ad spend and 8X conversion rate.

Delivered

with 25% of the impressions

10xDelivered

conversion rate

27xDelivered

return on ad spend

5xDelivered

return on ad spend

7xDelivered

conversion rate

8x

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Our team is here to help you choose the right partners for media buying and the technology stack. We have extensive experience with dozens of vendors and knowledge of many more. Because we are vendor agnostic, we can help you find the right vendor by conducting in-depth assessments and evaluations to provide neutral recommendations or work with your chosen partner; we also support the campaign roll out and provide ongoing governance.

Consulting and Support

AdPeople has worked with dozens of vendors globally and has established processes and best practices governing how we work with them — and how they work with each other. We create and implement rules so that our clients get the most from their agency setup. We also ensure your media agency, technology stack and other partners work together as a team with clear roles and responsibilities to eliminate redundancies.

Agency and Partner Management

AdPeople has a state-of-the-art asset management platform plus several workflow tools, so that we can find the right one for you. Our custom solutions, such as font extraction tools, enhance the process for our clients. Additionally, we offer custom image conversion and refinement tools.

Tools and Technology

Execution and Production

The execution and production of the various elements is key to a successful BT campaign and we excel at managing the entire workflow. We offer a single point of contact and manage partners, such as DCOs, to ensure the creative idea is executed perfectly to maximize results.

Working with AdPeople

Introduction

At AdPeople, we believe that good creative can complement BT performance. In fact, well-developed creative can outperform the generic, perfunctory retargeting banners. And we have both the expertise and experience necessary to integrate the big idea with the level of detail needed for each frame in the BT campaign.

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• Provide strategy and creative

Content Creation

Creative and Brand Strategy

Creative Development

Creative and Brand Strategy and execution

• Provide / manage tools, content and data

Hosting/ CMS

Content Curation

Data feed design/development

Tools and Technology

• Creative Strategy• Media Strategy• Support analytics implementation• Provide and create contents• Guidance for optimization

Marketing

Sales

Web / IT Team

Client

DMP / 3rd party audience data

Ad Exchange

DSP

Ad Server

Technology Stack

Publisher

Ad Network

Media

• Manage• Select• Monitor

Media AgencyAdPeople Worldwide

AdPeople Agency and Partner Management

We are adept at working with a number of partners and the client’s team to lead, oversee and coordinate BT programs and projects.

BRAND WEBSITE

• Collaborate closely• Develop Strategy• Select partners• Monitor Campaign Performance

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Want To Know More?

AdPeople has a proven track record helping global brands initiate and maintain Behavioral Targeting strategies. Established relationships with all of the entities involved in the BT and dynamic content creation process enables us to develop efficient programs that deliver dramatic results to our clients.

To learn more about our Behavioral Targeting capabilities, please contact Simon Hjorth

AdPeople WorldwideAustin, TX

[email protected]. 512-691-0400