Debate over online privacy and behavioural targeting heats up

This week the debate on online privacy heated up further with the US FTC coming out with a strict online privacy report that put behvaioural targeting networks on red alert. I’d like to use this post to provide a summary of the technology and the issues in the mix.

Behavioral targeting advertisers can target users by interests via their internet ‘behaviour’ i.e. which sites they visit, what type of content they’ve spend time on etc. Advertisers and publishers claim that BT is beneficial to users by showing them only relevant advertising thereby improving their web experience. On the other hand web surfers are generally ad agnostic, finding online banners either irrelevant or creepy. Most of us trawl hundreds of sites in a year, some of which we stop by only briefly or discretely. The thought that big companies are keeping a track every step on this trail and serving ads based on the cumulative data is scary.

The abililty to offer behavioural targeting is a great hook for publishers and ad networks to get large offline advertisers on board online advertisers. Data from Emarketer shows 1 in every 5 US Display dollars by 2014 will be linked to BT and that this tactic is twice as effective as RON ads. These advertisers can now use the large sets of psycographic data they have at their disposal through market research to target users by their lifestyles and behaviours. Knowing where someone likes to vacation, the kinds of cars they are interested in allows powerful interest – based targeting. As users visit different websites within an ad network, a profile is built and the user is bucketed in one of pre-defined segments and served ads when he visits another website that is part of the same network. The technology has been refined over the years and now most major network and publishers including Yahoo, Facebook and Microsoft offer this service, with revenues from this tactic poised for strong yearly growth.

Last week the Federal Trade Commission (FTC) in the US announced support for a measure that requires publishers to offer a “Do Not Track” option so users can “opt out” of data collection. Another suggestion is to have a symbol on every online ad that will give users access to see who sent the ad and what data is being collected about them. Overnight Microsoft announced that its Internet Explorer 9 would have ‘Tracking Protection’ functionality allowing users to manage which organisations have access to their data.

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6 Must-have elements to include in your Digital Analytics Dashboard



The appeal of online marketing is that a site owner can track almost everything related to site and visitor behaviour. This leaves us with a problem of plenty and often data overload, not knowing which are the important areas that can give us information leading to actionable changes. I am reminded of a quote by Einstein “Not everything that can be counted counts, and not everything that counts can be counted.” To put it simply, my recommendation is to build a dashboard covering 6 business critical areas only and share and review these with your leadership team every week. Each department head viz Marketing, IT Head etc can then go away and use deeper analytics reports with their supplier agencies to investigate issues arising out of this dashboard.

1. Sources of Traffic
 
Know where your sites visitors are coming from on a weekly basis. Broad sources are Search Engines (SEO and SEM), Direct/Bookmarked (when a user types your url in the browser or uses a prior bookmark), Other Sites/Campaigns (traffic from sites you have partnered with or have paid to put your ads on).
 
Benefit: Track the changes in trend of each and see the correlation effect of your marketing activities eg Direct traffic going up when you have a TV campaign running.

2. Campaign Performance

Track and compare the CPA and Conversion rate for each paid campaign eg Adwords, Affiliates, Email. Observe the impact one channel has on another.
 
Benefit: Understand which online channel gives you the best ROI. Also note how different channels perform at different times of the month and adjust your schedule accordingly.
 
3. Conversion Funnel

Chart the consumer journey from the time they land on your site and then go through the various steps in your purchase path.  If you are A/B testing two different landing pages, compare conversion funnels for both for greater insights.

Benefits: See where drop-outs occur and apply changes to plug the leakage.

4. Keyword Ranks
 
Identify the top 10 most important keywords for your business category that you should ideally rank high for in the search engines. Record your sites ranking for these keywords in both Paid and Organic Rankings once a week, preferably on the most important business day/time and when your PPC budgets are unlikely to maxed out. You can get an analyst to do this manually or use a paid monitoring tool like AWR to automate the task across multiple search engines.
 
Benefits: Benchmark your search ranking against competitors and also monitor changes in PPC rank strategy by others.
 
5. Website Usage

Top line numbers on how visitors are interacting with your website. Trends in metrics such as ‘time spent’ and ‘bounce rate’ can indicate the engagement levels and navigational ease of your site. If your ‘bounce rate’ increases consistently, you probably have a page or site section that users frequently exit from. This may be because they are confused or haven’t found what they were looking for.
 
Benefits: Understand how visitors use your site and identify problem areas around content and landing pages.

6. Webmaster Stats

Measure back end stats such as site average page load times and server down times as these can severely impact metrics like bounce rates, time spent and conversion rates.

Benefits: Understand how your infrastructure and hardware capabilities impact the users experience. Keep Marketing and Analytics team informed when a server side issue occurs so this reasoning can be used to explain fluctuations in other metrics.

One area I have omitted here is Competitor Tracking which is important as no online business operates in a vacuum and one should never be blindsided by a key competitor. However this kind of tracking is usually through 3rd party suppliers and comes at a premium and as such can be deferred until a business can get numbers 1-6 right first. I will cover this area in detail in a future post.

Digital needs to grow up

In my last post, I discussed in length the 5 major challenges Digital Agencies face today as they try to grow their individual shares of the growing digital ad spend pie. Today I’ll offer a few suggestions towards this goal.

To use a sports metaphor, Online needs to stop projecting itself as the new kid on the playground, with the shinier bat and pads. Fancy flash dashboards and a dazzling array of metrics will get you only so far with astute marketing heads. If you want to score then build partnerships, and you may get to bat up the order someday. The traditional guys own the relationships. If we keep telling them online is going to gobble up offline, they’ll only get more protective of their turf.

Online shops must start by understanding what it is that has made traditional media agencies so indispensable to clients. Firstly, Offline delivers tangible campaigns that touches all our major senses – hearing, seeing, smelling, tasting, touching, the last 3 through sampling and retail experiences. A billboard on a busy intersection, a full-page ad on the back of MX, a kiosk in the centre of a high footfall suburban mall are all examples we associate with advertising from our growing up experiences. To those of us who have made advertising and marketing our careers, these are the first channels we instinctively turn to for a brand activity. Online ads cannot deliver the same lasting impact or memorability as TV, as proved by a recent UK study.

Display agencies combat this by promising to deliver ‘bonus’ impressions and clicks to their clients. This is done in conjunction with publishers who provide cheap RON impressions across their vast network of sites. These are then presented within a ‘campaign over delivery’ section in the post analysis report. PPC agencies do not go down this route as Search is a ‘client pays only for clicks’ model. This leaves Search agencies at a disadvantage compared to their Display counterparts as their only USP is the promise of quality leads through direct response. But here’s the risk. Since Search agencies concentrate so much on search metrics not on marketing outcomes, clients see search as a commodity service. This lowers the barriers to exit and could lead to them either changing agencies or going in-house to save on substantial management fees. So Digital Agencies need to think of enhanced value and establish a clear differentiator.

There are 2 kinds of clients out there and we need to have separate approaches for these:
1. Those who don’t get online and let their traditional agency lead
2. Those who get online, but have all the online agencies knocking on their door or realize if they are spending all that money they may as well take it in-house

There are 5 things agencies need to do to make themselves resilient:
1. Start creating experiments to show finite effect of Search/Display on offline events. Eg Coupons available only on a search landing page
2. Build attribution models for clients to prove offline-online effect. They won’t do it so we have to.
3. Engage traditional agency heads and clients directly. Don’t leave the PR to your Search Engine rep. 
4. Cut the search/online jargon. It took years for people to understand GRPs and TARPs, don’t make them swallow CPCs, Quality Score and Rank now.
5. Think like marketers not search geeks. It’s all about market share. Hire a few MBA’s if you have to.