Behavioral Targeting Many e-commerce marketing firms use behavioral targeting techniques to increase the effectiveness of banners, rich media, and video ads. Behavioral targeting refers to tracking the clickstreams (history of clicking behavior) of individuals on thousands of websites to understand their interests and intentions and expose them to advertisements that are uniquely suited to their online behavior. Marketers and most researchers believe this more precise understanding of the customer leads to more efficient marketing (the firm pays for ads only to those shoppers who are most interested in their products) and larger sales and revenues. Unfortunately, behavioral targeting of millions of web users also leads to the invasion of personal privacy without user consent. When consumers lose trust in their web experience, they tend not to purchase anything. Backlash is growing against the aggressive uses of personal information as consumers seek out safer havens for purchasing and messaging. Snapchat offers disappearing messages, and even Facebook has retreated by making its default for new posts for friends only.

Behavioral targeting takes place at two levels: at individual websites or from within apps, and on various advertising networks that track users across thousands of websites. All websites collect data on visitor browser activity and store it in a database. They have tools to record the site that users visited prior to coming to the website, where these users go when they leave that site, the type of operating system they use, browser information, and even some location data. They also record the specific pages visited on the particular site, the time spent on each page of the site, the types of pages visited, and what the visitors purchased (see Figure 10.3). Firms analyze this information about customer interests and behavior to develop precise profiles of existing and potential customers. In addition, most major websites have hundreds of tracking programs on their home pages, which track your clickstream behavior across the web by following you from site to site and retarget ads to you by showing you the same ads on different sites. The leading online advertising network is Googles Marketing Platform.

Discuss the advantages and disadvantages of behavioral targeting to both businesses and consumers. Think about the amount of data that has been collected, 3000 data measures for nearly every consumer in the U.S., about consumers. Do you think this practice is ethical or not? Explain your answers.