Is Behavioural Targeting necessary? Here’s why not

Do advertisers really need to know everything about consumers’ lives to sell products and services?

Behavioural targeting has been the bread and butter of many advertisers for years. It’s no doubt that brands became dependent on the data they can harvest from consumers to create their personalised advertisements. But the question remains if behavioural targeting is really necessary. Isn’t it time to make a change and break away from the standard practice, especially that it can be pretty invasive?

According to GroupM’s report about brand trust and data privacy in APAC, 67% of respondents said they were “concerned” about their privacy online. About 56% of respondents claimed that they were restricting the data they share with businesses. Some people say that they install ad blockers and limit sharing phone numbers.

Although digging into online activities might sound natural for advertisers, it can be aggressive and often delves into the area of cyber-stalking. Moreover, when consumers go about their online activities, the last thing they want is for some companies to be dissecting their every move for the sake of advertising.

Let’s look at the stricter consumers’ data privacy regulations and why brands may want to start creating more context-driven ads.

The Highs and Lows of Behavioural Targeting

There are several reasons why some brands prefer behavioural targeting as a marketing strategy. Some companies believe that knowing the most intimate details of their consumers’ lives can help them tailor their ads to their consumers’ needs.

When GE Capital launched its site Art of Money, its goal was to use content consumption and user engagement to select the most appropriate product recommendations. This resulted in approximately 40,000 monthly engagements, of which around 10,000 are repeat engagements. However, this entails convincing consumers to provide companies with in-depth access to their personal-level data, something that most consumers find too aggressive.

Marketing companies also use behavioural targeting to reinforce retargeting. Retargeting is a strategy wherein an advertiser shows an ad several times on different websites based on the web pages and sites that a consumer frequently visits.

Be that as it may, some experts believe that behavioural targeting is not crucial to driving performance and that personal-level data is not vital in crafting effective marketing strategies.

HSBC’s Richa Goswami, global head of customer and international, said that businesses tend to overvalue the customers’ willingness to provide personal information to buy services or products. In their work, she said that sharing knowledge about financial literacy rather than reaping information from customers is more appropriate or contextual.

Meanwhile, Ashutosh Srivastava, CEO of GroupM (APAC), said the consumer experience is usually interrupted by “lots of spams” and “unwanted messages.” He added that the industry requires awareness to create responsible advertisements that are more relevant for consumers.

Behavioural targeting can also feel like a privacy violation for some consumers. Consumers who are aware of their online activities getting monitored may resent and shun products advertised to them. They may also end up shying away from online interactions to protect their privacy. Creepy data collection practices also push consumers to use powerful ad blockers that leave advertisers powerless.

There is also an argument against the effectiveness of behavioural targeting because of time constraints. Since these ads rely on consumer behaviour from several weeks past, there is no guarantee that consumer preference is unchanged, which means that a carefully crafted ad using behavioural targeting may end up being a waste of time and money.

Reclaiming Consumers’ Data Privacy

Amidst increasing concerns about consumers’ data privacy, new regulations are getting enacted that will limit how companies can use consumer data in crafting their marketing plans.

In April of 2016, the European Parliament and Council enacted the General Data Protection Regulation (GDPR), which regulates how companies protect an EU citizen’s data. The said act also addresses concerns regarding the transfer of personal data of an EU citizen outside of the EU and EEA jurisdictions. While this mainly concerns European brands, this regulation also affects Asian companies that want to conduct business or offer services to EU citizens since these companies need to ensure that the way they use personal-level data complies with GDPR standards.

Mobile giant Apple is also enacting a restrictive privacy update that can affect the effectiveness of digital marketing. Its iOS 14.5 provides users with the choice of deliberately opting out of sharing their unique Identifier for Advertisers, which means that the said users can limit the way that they can get tracked and targeted by digital marketers.

Google is also planning to phase out third-party cookies in Chrome by 2022. The company also announced that it wouldn’t use other web tracking tools after the phase-out of third-party cookies.

As the advertising world prepares for a cookie-less future, contextual targeting is one of the more favourable alternatives. Contextual targeting relies on keywords, time of day, location, and environment in shaping advertisements requiring old-fashioned media planning that’s proven effective before the advent of cookies.

Although behavioural targeting can be an effective marketing tool for companies, the advent of personal data regulations and the impending phase-out of third-party cookies will force companies to develop alternatives that will allow them to craft results-driven marketing plans that won’t rely heavily on their personal-level data.

Companies should consider this a golden opportunity to prove to consumers that they can create effective marketing strategies while respecting consumers’ privacy.