• by David Honig , March 13, 2007

As is the case with any sudden industry darling, behavioral targeting (BT) has been greeted with both great expectation and abject skepticism.

Proponents say BT is the next wave in super-targeted advertising. Detractors point out that BT only targets to the pool of surfers about whom the BT networks have data. That limited pool, the detractors argue, places limits on BT's ability to scale, and those limits don't exist in other marketing channels.

We think that both sides of the argument are misguided, because they both view BT as a next-generation marketing tool. We think it might be more useful to view BT not as a marketing tool, but as something more akin to CRM. And as with all CRM, discussions around scale aren't quite relevant.

By way of analogy, we'll demonstrate what we mean by way of search marketing.

As shoppers who self-identify as top prospects, searchers show up high on your pipeline from the start. You still need to hunt them down on the right keywords, and you still need to convince them to engage more deeply with your business -- which they'll do by clicking on your ad and arriving to your landing page.

But searchers take action to identify themselves as top prospects, in the same way as any prospect action brings that prospect within a CRM system. And so it's reasonable to say that CRM and search have a lot in common.

There's another similarity between CRM and search. Both deal with a limited pool, because both deal only with top prospects -- and only with the top prospects who've given some indication of their value. And since the pool of customers is finite in each, there are limits to how much you can scale within each channel. In CRM, scale is just an irrelevant term; in search, scale faces enormous hurdles beyond a certain point (more on that later).

Everything we've said about CRM and search applies equally to BT. BT targets only the top prospects, based on indications they've given through their behavior. And, for the same reasons, BT faces problems of scale in the same way search and CRM do.

But it isn't necessarily a problem that BT -- and search, for that matter -- face hurdles in scale, just as it isn't a problem that you won't achieve scale within CRM.

Your goal in CRM isn't to grow your CRM campaign larger; it's to reach out to the people you've already identified as current customers and very likely prospects.

Your other goal in CRM is to understand those prospects and customers in order to better target new customers going forward, and to know how to get the right message in front of new prospects, in the right places.

In other words, the goal of CRM is to make sure your past and future marketing dollars are working efficiently. Long-term, that affiance also gives your marketing team the dollars it needs to scale elsewhere.

And the same is true with BT and search. In both arenas, there's often too strong a focus on scaling the campaign, and not enough of a focus on their real gift to marketing: helping you get the most out of your current and future marketing budget.

Of course, there's a big difference between problems with scaling in CRM, and problems with scaling in search. Since CRM campaigns set out to reach a limited group of customers, scale is never a goal within your CRM campaign. Search campaigns set out to reach as many people as possible. It just so happens that this pool inevitably runs out after a certain point.

In practice, this means that search marketers inevitably try to grow their campaigns as much as possible -- they just inevitably hit hurdles as they try to scale beyond a certain point.

But the difference between the good search marketers and great ones is the ability to overcome those hurdles, and to continue scaling while maintaining efficiency. We'd argue that the same is true of scaling within BT.

David Honig, Vice President of Media Services at Did-it.com, wrote this piece with Kevin Lee, Did-it.com's Executive Chairman and Co-Founder. They can be reached at Kevin@did-it.com and dhonig@did-it.com, respectively.