by guest blogger Mike Crosson, vice president of Sales, SocialTwist

Behavioral targeting is all the rage these days, and for good reason in general. The caveat is just that, however: in general. When it works, it works great, creating greater recall, brand lift and ROI. However, when it doesn’t work, it really doesn’t work, and can lead to serious concerns over privacy issues. It often backfires by correlating consumer behavioral data and making assumptions about that person that aren’t true.  

For example, I recently did some research on some baby products for my daughter, who has a one-year-old boy. I also went to a few of my favorite car sites and cruised some collectible auctions. The next thing you know, I’m targeted with ads for minivans. I’m a single guy. The last car on the earth you’d catch me driving is a minivan. But based on my behavioral data, I looked like the ideal demo target. Wrong, really wrong. Or how about the ads I got targeted with after I reviewed some low-sugar recipes on a major food network? Diet ads. That just irritated me because I am not overweight. I am diabetic. That’s different.

Though algorithms can track contextual relevance from keywords and apply overlays for demographics, geolocation, even psychographics, algorithms can’t make the synaptic living connections that the human brain does automatically. Put simply, there is no algorithm smarter than the human brain.

Worse than being unreliable, behavioral targeting carries unsettling concerns over privacy, both for the consumer and for the advertiser. When services and networks use cookies to collect consumer behavioral data, and then use that data for targeting, the companies are actually selling the intellectual capital of the advertiser’s audience to someone else. They are also often selling personally identifiable information. For example, if someone visits a credit card site that services challenged consumers, that person is highly likely to be targeted with ads for high-risk mortgage refinancing, payday loans and all kinds of shady offers.  Is that a service or disservice to the consumer?

There are alternatives.

When consumers are given the choice to provide specific data and opt in to engage in a specific transaction, then the advertiser can begin a relationship with that consumer. In social media, establishing trust and communication is essential to building a relationship. That gives the consumer confidence in the advertiser and can turn them into brand ambassadors.  In social media marketing, for example, some companies provide sharing tools that let consumers relay an advertiser’s message by email, blogs, instant messaging and social communities, such as Facebook, Twitter, Digg, Delicious, etc. Most providers use cookies.

I would argue there’s another, more targeted and effective way: the Human Filter Factor. People instinctively know how to respond to specific offers and will filter how they pass these on. They won’t pass on a local grocery store coupon to their family three thousand miles away. They won’t pass on a Depends offer to their recent college graduate, and they certainly won’t send a Hooters two-for-one Saturday night special to their minister.  But they will send out that two-for-one Jamba Juice coupon to everyone they know because who doesn’t like Jamba Juice? A recent Jamba Juice social media marketing campaign achieved a 126% click-through rate with just such an offer. A large food and beverage company expected to have 5,000 coupons redeemed in a 30-day period. Jamba Juice reached those numbers in just two days. Not every campaign will have those kind of blow-away numbers, of course. But many do. And almost all campaigns that use referral marketing in social media deliver much higher efficiencies than standard digital advertising campaigns. After all, it’s only natural. People like to share. And when they have a trusted relationship with an advertiser, they want to share that offer or news or special promotion. It’s a part of our nature.

Behavioral targeting and privacy are all over the federal government’s radar for good reason. But with judicious use of services that protect consumer information and privacy, advertisers can build their brands with increased consumer loyalty.