Is Believing in Behavioral Targeting Like Believing in Santa?

Coincidentally, or not, this week an investor, an entrepreneur, a vendor, and a writer each enthused about behavioral targeting. They seemed to all believe this was the future of advertising. But while I do believe in the demonstrated benefits of behavioral targeting, I couldn't help but wonder whether believing in it was like believing in Santa -- something you do when you're a kid, but grow out of, hopefully, at some point.

Past Behaviors to Indicate Future Behaviors?

The premise of behavioral targeting is that past behaviors are good indicators of future behaviors. It's something that seems easy to believe. But let's peel back the holly leaves a bit.

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Dramatic Lifts in CTRs Still Yield Tiny Results

So, why are so many people festive about behavioral targeting these days? Perhaps it's those dramatic, multi-hundred percent lifts in click-through rates (CTRs). Right. But don't you wonder why behavioral targeting proponents only cite lifts and never the actual CTRs (define). Instead they hide behind standard "it depends" or "it's confidential" excuses. Well, it's actually because the CTRs are usually a rounding error to zero. Indeed, it is an improvement of 400 percent if the click rates went from 0.001 percent to 0.004 percent. See the growing body of evidence that Facebook's mega-hyped behavioral targeting system -- complete with demographics, behaviors, and even conversations -- is not what it was cracked up to be (see the actual Facebook advertising metrics and benchmarks). The low click rates still yield tiny trickles of traffic. Then only a tiny fraction of those go on to actually complete a purchase, resulting in minuscule impacts on sales.

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