• by Phil Leggiere , March 5, 2008

All leads, as any good marketer knows, are not alike. The challenge of lead generation online is not just leads but quality leads, leads that have a high likelihood of translating not only into single conversions but into regular customers. Targeting for quality leads entails moving beyond generic product category targeting and adapting behavioral methodology to lead generation, Brad Powers, CEO of Active Response, explains below.

Behavioral Insider: I know Active Response has been very active in developing privacy standards for both lead-generation and behavioral advertising more broadly. What are some of the misconceptions you find in how people perceive the issue?

Brad Powers: One of the biggest misconceptions on the part of consumers and maybe somewhat even marketers about behavioral targeting is that online advertisers have an overabundance of personal data. But when you think about it, offline there is actually far more data consumers. A catalog merchant, for instance, Lands' End, say, has extensive amounts of really personalized data from your address, your phone number. Other very personal identifiers. Online, on the other hand, marketers have data strung together at best from anonymous cookies. For that reason, I think you can say there's often more anxiety on the part of consumers who think online advertisers know so much about them. Actually, most marketers online (excluding of course spyware and other kinds of sleazy practices) try very hard not to be intrusive, in my experience.

BI: Lead generation is not usually top of mid in discussions of behavioral targeting. What's different about behavioral as you use it?

Powers: The interesting and unique thing about lead generation ad networks is that targeting is based on opt-in personal information about personal preferences. People decide what sort of information they want to divulge about the product categories they're interested in. So where the behavioral comes in is, once you know that information, you follow how consumers actually respond to the offers they get. This is a step beyond predicting what kinds of products consumers will be interested in. We're using it as a tool for us to target the highest yield offers for particular consumers based on how they respond to and interact with ads. This involves creative presentations and text, as well as the actual incentive.

BI: What are the most important benefits you've found in this context?

Powers: Behavioral targeting has too often been assumed to be intrusive -- but in actuality, as Amazon and Netflix have shown, having marketers use behavioral data can add real value to their experience. If people feel the information they're providing to a marketer is being used responsibly, and actually gives them some tangible benefits, it's perceived as a win-win.

For marketers, a big benefit of behavioral targeting that's also not always recognized is that a good behavioral program tells you what offers and creative content NOT to use. Just because a consumer signed up to receive offers about golf doesn't necessarily mean that you just follow them around serving anything and everything related to golf.

BI: What are the biggest challenges to deploying behavioral data usefully?

Powers: A real limitation of conventional behavioral campaigns, especially retargeting, is that it doesn't improve over time as far as learning more about customers. Using targeted offers, the more we see a user and how others respond to offers the more we learn. Of course, in order to really develop a learning curve there needs to be adequate frequency, which in turn means there needs to be enough reach to make that possible. So intelligent technology without reach is limited -- but so is reach and frequency without a learning curve.

Speed of response in lead generation is even more critical than it is in standard media advertising. The Web is made for on-demand information. So if someone requests information about a product or offer, they expect the information immediately. For that reason a live lead needs to be reported in real time.

BI: What sorts of new areas is Active Response most interested in these days?

Powers: We have been and remain focused on the online space, but clearly what's being done now online will soon have enormous applicability to other media, especially mobile and IPTV. The technology is in place in mobile, for instance, to do some amazing things. You can imagine a consumer standing online at a McDonald's and getting a message on their cell phone saying 'You can have your meal half price if you go across the street to Burger King.' Whether - and, if so, how consumers will want offers of that kind still has to be worked out. Concerns of opt-in and permission will be paramount, precisely the issues we're focused on refining right now.