What is Behavioral Advertising?

You’ve likely seen that behavioral targeting related to Facebook and Instagram may get banned in the EU. But, what does that actually mean?

I have not seen a definition of “behavioral advertising” from regulators. I did find one in relation to this case from the AP:

Behavioral advertising, used by Meta’s Facebook and Instagram among many other tech companies, involves observing individual behavior such as browsing habits, mouse clicks and app usage, then using that data to build profiles for targeting ads.

This includes much more than iOS 14 opt-outs, which limited data collected away from Facebook and Instagram. This includes using behavior on and off the apps for targeting.

That said, most advertisers misunderstand why this matters and what is at stake. I’ve heard several now suggest that this is no big deal because targeting will then be focused on AI. Meta, they say, will just prevent advertisers from providing targeting inputs in those countries and utilize broad targeting. I think this is completely wrong.

My interpretation is that the regulatory agencies do not care whether the advertisers provide targeting inputs or not. They only care that users are shown ads because of some action they took on or off of the app. Whether that was determined by an advertiser or AI is irrelevant.

This is why Meta offered the paid, ad-free subscription option in the first place. They didn’t want to do that. But it’s the easiest solution. It gives users an option of allowing Meta to collect their data and use it in personalized ads or pay to prevent Meta from collecting and using that data.

If all Meta had to do to appease the regulators was remove advertising inputs in the EU, they would have done that. We’re on that path anyway.

Understand that the alternative here isn’t losing advertising inputs for the advertisers. The alternative is completely untargeted ads. AI can’t save us here. That AI would still need access to the data to serve relevant ads, and the regulatory agencies are potentially saying that’s not allowed.

This is what is at stake. This is why Meta is offering the ad-free subscription option. They don’t necessarily want anyone to sign up. They just want to be able to continue to serve personalized ads.

I still think it’s going to sort out. But I wanted to create this video to help advertisers better understand what is actually at stake when this is discussed and help explain why this subscription has been offered in the first place.