The End of Behavioral Targeting and the Rise of Account-Based Marketing

Since the introduction of online banner advertising, a generation of marketers has been trained in the power of behavioral targeting. Those marketers live and breathe intent data while championing the value of prepackaged cookie segments.

But as marketing moves toward personalization—a trend that mobile has not merely made possible, but inevitable—it's becoming clear that behavior isn't the Holy Grail many claimed it was. After all, isn't it much more valuable to know who your customer is, rather than to draw inferences from their most recent behavior?

In parallel, B2B marketers are investing heavily in account-based marketing programs that harness improved CRM matching, account transparency and built-in attribution. For B2B marketers, onboarding the customer, not their behavior, has always been the essential focus. But as B2C marketers shift to a greater emphasis on personalization, and as martech continues to merge with adtech, the efficiency of an account-based approach becomes incredibly important.

In effect, the attributes B2C marketers need most are the full capabilities that have historically been associated with direct marketing. And where is that more apparent than in a mobile world where the cookie has crumbled, and the device ID means marketers no longer have to guess at whom they're talking to?

In the race to provide customers with a transparent, omnichannel experience, some marketers are probably wondering whether it makes sense to combine behavioral targeting with an account-based approach. After all, once you know whom you're reaching, doesn't it make sense to layer on additional data about their behavioral?

At first glance, the combination of direct marketing with behavioral targeting should create a stronger engagement profile. In practice, however, behavioral targeting diminishes the quality of leads, which is why the arrival of account-based marketing means we're in the last days of behavioral targeting.

How Direct Marketing and Behavioral Conflict With Each Other

Imagine that a pharmaceutical marketer wants to reach oncologists. Through standard direct marketing tactics—office and hospital affiliations, medical registry data, and IP addresses—the marketer can often create a deterministic match to physicians and their specialties, and from that match derive an audience.

But when you execute the campaign as a behavioral audience, you go from a deterministic model to one that's entirely probabilistic: The user you're targeting based on their online behavior is possibly an oncologist or possibly associated with medicine. It is all an educated guess, based on location and site visits. Truth is, you might end up connecting with a doctor's office, but it could be a gynecologist, and it is just as likely you'll reach the doctor's spouse, the coffee shop near the doctor's office, or a high school student doing research for a health sciences exam.

In effect, you've taken a qualified list of leads and muddied the waters with behavior-based inferences.

How Do We Reconcile the Conflict?

Right now, the conflict between account-based marketing and online behavioral marketing is playing out at the vendor level. That should give marketers pause, because what that means is that, at best, the CMO office must referee yet another vendor squabble, and, at worst, campaigns are being executed in a suboptimal manner because they are effectively running at cross-purposes.

But regardless of how marketers and their vendors are currently resolving that conflict, the larger strategic question remains: What is the place of behavioral targeting in an account-based marketing world?

The Last Days of Behavioral Targeting

Behavioral targeting may not play well with the ascending account-based marketing model, but practitioners may find use for it on the margins.

Consider a hardware store. About 62% of Americans own homes, according to US Census data. That means two-thirds of all American households have an ongoing, lifetime need for a hardware store. Over time, and with enough CRM data and product-level profiling, from garden tools to washing machines, account-based marketing programs will cover this entire population. But there are still customers out there beyond the friendly confines of a personalized account-based approach.

A renter still needs a toolbox. A college student still needs spackle to cover the holes they made hanging posters in their dorm room. Hardware store brands will situationally want to reach those customers, even though they're only marginally qualified leads. Or, put another way, those brands will want to reach people whose attributes don't necessarily align snugly inside an onboarded audience and an account-based marketing program.

At that stage, there may be some room for behavioral targeting, but only insofar as deterministic data is unavailable and the audience can be better served through a broadcast advertising model. With onboarding and multidimensional audience data, this window is closing. But, for the time being, behavioral targeting, the gold standard for reaching the right audience at the right time, will remain a tactic for making the other random advertising models a little more efficient.

MarketingProfs: http://www.marketingprofs.com/opinions/2016/31234/the-end-of-behavioral-targeting-and-the-rise-of-account-based-marketing