What is Behavioural Analytics?
Behavioural analytics is a subset of data analytics focused on gaining insights into people’s actions, particularly in online purchasing. This analytical approach finds application in various domains such as e-commerce, gaming, social media, and other sectors, aiming to determine opportunities for optimisation and achieve specific business objectives.
Behavioural analytics includes not only demographic and geographic data but delves deeper by creating a comprehensive profile of a user’s past activities, integrating any additional available data.
How Behavioural Analytics Works
Behavioural analytics relies on data, using vast amounts of raw data generated by people across different platforms such as social media, gaming applications, marketing channels, retail sites, and other applications. The collected data undergoes thorough analysis, serving as a basis for decision-making processes, including predicting future trends and guiding business activities, such as optimising ad placements.
Despite its reliance on data, there exists considerable ambiguity surrounding the nature of insights produced by behavioural analytics. For instance, online advertisers use this approach to customise offers based on users’ demographic data, past search or social information, and local market trends, placing users into larger groups known as cohorts or demographics. Users are presented with ads or offers tailored to align with the most successful strategies within their respective groups.
Behavioural analytics supports many hypotheses, with the process of elimination relying on experimentation and evaluation. Usually aimed at boosting conversions, businesses discard hypotheses that prove detrimental to their goals, opting for alternatives or maintaining the status quo.
The application of behavioural analytics is frequently observed in A/B testing, where one variable is modified at a time. As behavioural analytics continue to advance and technologies for real-time testing of multiple changes evolve, companies become increasingly proficient in precisely targeting customers and refining their strategies.
Types of Behavioural Analytics
As anticipated, behavioural analytics is commonly applied to drive sales, primarily through ad placement or suggested products.
In the realm of e-commerce and retail, this methodology facilitates the generation of product recommendations and predictions for future sales trends, leveraging insights into consumers’ current preferences.
Within the domain of online gaming, behavioural analytics aids in forecasting trends in usage and preferences, especially valuable as gaming companies transition away from packaged products. This approach allows them to strategically target gamers with specific in-game upsells based on behavioural patterns.
In the context of application development, businesses use behavioural analytics to understand how users interact with an app, enabling them to forecast future trends. Similar to online gaming analytics, companies can then introduce app upgrades aligned with observed behavioural patterns.
In the field of security, behavioural analytics plays a crucial role in detecting compromised information by identifying unusual activities. This method is widely adopted by both government agencies and private companies globally.
Criticism of Behavioural Analytics
Amazon provides a personalised homepage tailored to users’ demographics, past purchases, search queries, and viewed products through behavioural analytics. Also, each product page showcases the actions of users with similar preferences. This data constitutes the true power of Amazon.
Since 2015, Amazon, alongside tech giants like Google, has introduced in-home voice products that serve as a rich source of behavioural analytics concerning users’ offline activities. Just as online actions contribute to a wealth of data, users implicitly agree to these terms when making a purchase, even though some individuals perceive this as intrusive and excessively revealing to both data companies and government entities.
Summary
Behavioural analytics is employed to monitor user preferences and tailor content recommendations accordingly. Primarily, it is used to guide potential customers towards specific products or advertisements. However, concerns have been raised about the potential harm and intrusiveness of the data collection systems, with some individuals expressing worry that their every action is being tracked and monitored.
DISCLAIMER: This article is for informational purposes only and is not meant as official business advice. AVANTE PARTNERS has no working relationships with any company mentioned or research company using behavioural analytics practices.