Targeted advertising is a type of advertising whereby advertisements are placed so as to reach consumers based on various traits such as demographics, psychographics, behavioral variables (such as
product purchase history), and firmographic
variables ... or other
second-order activities which serve as a proxy for these traits.
Most
targeted new media advertising
currently uses second-order proxies for targeting, such as tracking online or
mobile web activities of consumers, associating historical webpage consumer
demographics with new consumer web page access, using a search word as the
basis for implied interest, or contextual
advertising.
Addressable
advertising systems serve ads directly based on demographic, psychographic, or
behavioral attributes associated with the consumer(s) exposed to the ad. These
systems are always digital and must be addressable in
that the end point which serves the ad (set-top box, website, or digital sign)
must be capable of rendering an ad independently of any other end points based
on consumer attributes specific to that end point at the time the ad is served.
Addressable advertising systems therefore must use consumer traits associated
with the end points as the basis for selecting and serving ads.
Advertisers want to reach as many consumers as
efficiently as possible. This requires an understanding of how customers' minds
work.
Behavioral targeting is the most common targeting method
used online. Behavioral targeting works by anonymously monitoring and tracking
the content read and sites visited by a user or IP when that user surfs on the Internet. This is done by
serving tracking codes. Sites visited, content viewed, and length of visit are
databased to predict an online behavioral pattern.A further refinement to
behavioral targeting is Predictive Behavioral Targeting, where
machine learning algorithms overlay behavioral patterns with sampled data, to
create data-rich predicted profiles for every user.
Alternatives
to behavioral advertising include audience targeting, contextual targeting, and psychographic targeting.