In short online behavioral advertising simply means a way of advertising in which you target people on the internet based on their past behavior online. We have all at one time experienced online behavioral advertising. Just think back to the last product search you did on Google, or the advertisement you clicked on social media. All of a sudden you are seeing more and more of the items you searched for on other sites you visit. 

Year after year advertisers are increasingly monitoring people’s online behavior. Advertisers then use the information gathered to more accurately sell services to users based on their own targeted behaviors. The ads can be targeted based on websites visited, articles you read, videos watched and even online purchases made. 

Online advertising revenues are growing rapidly every year as advertisers are creating more relevant and effective ads for their target audience. 

What level of personalization does OBA include?

The data collected for OBAs can vary widely. It can be micro-targeted to show you ads for a specific item you searched for, or can target an item category. For example, if you are searching for a coffee table the micro-targeted ad might show you an exact table that you clicked on,  and the category advertising may show you living room furniture-related advertising.

The level of OBAs has led to discussions and calls for bans due to privacy concerns. It has been shown there is more acceptance of OBAs when a customer is informed of the data collected, its purpose, and its use.  

Are the Click-through rates improved using OBAs? 

Studies have shown that targeting a person’s interest (online searches, online groups, celebrity searches) leads to higher click-through rates than ads that target the background characteristics of a customer (College attended, age, gender). It has also been found that personalized banner ads increased click-through rates compared to less customized ads. 

Is there an effective alternative to using OBAs? 

Yes, Contextual and behavioral targeting are similar. Behavioral advertising tracks surfing behaviors, and contextual advertising is determined by the environment in which the audience is browsing.

The advantage of contextual targeting is its compliance with the GDPR due to its minimal reliance on intimate personal details to serve relevant ads. This makes it safer for advertisers who want to avoid the GDPR, while still benefiting from relevant advertising.