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Advanced Ad Targeting Is Still for the Marketing Elite

behavioral targetingMatthew Creamer at Ad Age recently wrote about an experiment where he wanted to see just how much online advertisers targeted him. His goal was to determine if the ads “understood” who he was and would provide some amount of relevancy based on who he was.

Unfortunately, his conclusion (two days and 200 impressions later) was that 90% of the ads he was served were what he deemed irrelevant. And even the 10% that might have been relevant, were only mildly so. This left Creamer fairly underwhelmed about the intelligence of display advertising, especially with all the hype around marketers’ ability to follow buyers around.

It’s admirable for him to tackle this. After all, who wants to notice every ad they see? And while his approach was not scientific, it was oddly representative of the state of display marketing today.

I asked our Sr. Director of CRM Analytics Matt Anthony whose passion is around this topic about this particular experiment, and he had this to say:

Right off that bat, that 10% number (Creamer) quotes is in line with expectations given how inventory is being sourced today. Based on our data points, 90% of the current ad inventory is still part of run-of-site deals with blast/static creative, a.k.a. in non-targeted impressions.

So, most impressions are pretty dumb. They don’t care who you are because the advertiser (or their agency) likely bought into the demographic of a site, which is considerably more limited than actual browsing behavior. Or worst yet, they were buying through an exchange that had some low cost inventory. What you have to understand is the advertiser’s intent. Certainly, if the goal was simple branding, a spray-and-pray approach can often meet that requirement. It’s worked for centuries to build recognizable brands.

But isn’t digital display advertising more sophisticated with the ability to track real activities? According to (our) Matt, just because you have data, doesn’t mean you know what you’re going to do with it:

The prevailing belief is that there is so much data out there now that everyone thinks targeting is a foregone conclusion. The problem is that having a lot of data doesn’t equate to or guarantee effective targeting, since targeting is a function of processing and analyzing that data, and the ability to act that data is not easily acquired. It takes a lot of work and knowledge to effectively cull through piles of data to get to the juicy core (which is generally small) where the actionable relationships exist. Moreover, there’s a want for these solutions to always be simple (direct and one-dimensional) but that is rarely the case in reality.

And the reality is that busy marketers with limited staff and budgets rarely go through the trouble to correlate their cross-channel efforts. If they see an overall lift through some campaign, tweaking ads for each site to try and optimize them might not be worth the investment in time and effort. And if you’re not using a digital marketing platform (like our very own MOJO), you are basically relying on someone on your team sift through mounds of data from every channel to come up with some analysis (something in a past company of mine lovingly called “spreadsheet kung fu”). And even in that situation, you’re relying on publisher data and your web analytics, rather than true impression, click, conversion service data.

So what can we learn from this?

  • First is that there is likely a point where the effort to optimize and target is worth it. Maybe it’s in higher value products. Maybe it’s cutting down a long path to conversion. Maybe it’s finding a really qualified audience where their behavior does matter. Or maybe there’s simply a corporate requirement that dictates every marketing dollar should have an attributed impact on the bottom line.
  • Second, if you are going to optimize your return on ad spend (ROAS) to streamline targeting, you need to be able to properly correlate your data. You can’t just take one impression or click out of context and expect to learn much. It takes the effort of all your cross-site campaign activity to come up with some idea of the truth. That means getting the big picture and it means keeping that data on your side, not the publishers, in the form of a data management platform (DMP).
  • Third is that once you know about that person, you still need to provide compelling ads that matter to them. It might be through dynamic messaging or highly proven creative that works for that particular situation. Otherwise, all that great hard work to understand how a buy decision happens doesn’t result in execution.

I’m certain we will talk even more about this over time. That’s because we do see our clients maturing to asking more of their display ads. And when they see better results, they buy more of that kind of ad or target. It’s sort of like the difference between advertising with sign-dancing human directionals or truly measurable campaigns – it really depends on the quality you’re looking for. But once reach it, you want everything to live up to that quality.

One thing is certain: Better targeting leads to a more measurable ROI for your ad spend which makes a real difference on how you scale your business.

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