News
Targeted Ads: Is the Hype for Real?
August 11, 2014
We talk a lot about individualization—whether in the context of marketing our own content or paid advertising. It makes a lot of sense, but sometimes it’s hard to know how effective it is. There are so many factors at play and ample metrics available to us these days. But, one thing is for certain: big data and individualization are key factors in a digital-first strategy. Let’s take a moment to at them both through the lens of digital ads—because that is one area that shows us some real numbers.
The IAB Internet Advertising Revenue Report, 2014, showed that 2013 was the first year that marketers spent more on their Internet ad budgets than on broadcast TV, with mobile, social and video claiming the lion’s share of the spending. These numbers are only expected to rise.
Mobile, social and video are significant moving parts in themselves. Put them into an overall ad campaign, and it’s no wonder that it’s challenging to track results. But recent numbers from the Neustar Media Intelligence Report, which looked at quarter one of 2014, gives us a little insight on what does increase ROI. Keep in mind that this report is focused predominantly on BtoC companies, but many of the lessons are easily transferrable to BtoB.
A key metric to consider is that 83% of marketers’ spending in this study went to display ads, which drove 84% of the actions taken by targeted customers. A few relevant insights give us a perspective across channels:
Social seems to show the best cost and reach efficiency. Yet, it seems to shine in driving awareness and influencing sales as opposed to driving actions and conversions.
Display shows a stable action-to-impression ratio, which is helpful for comparisons to other channels.
Video indicated that those who see ads on video networks are more likely to convert.
Mobile showed 1.5x actions were taken per impression.
What can we take from this? Well, for one, it appears that a strong digital ad strategy leverages a suite of approaches with Social, Display, Video and Mobile. But as Rob Gatto, Neustar’s SVP of Advertising and Media points out, it’s also about knowing your audience. He says, “Stop buying advertising based on where you think your audience is,” and urges advertisers to really leverage audience data and CRM data to target ads appropriately.
(The report shows that CRM data performed 32x–107x better than the advertiser average in the Entertainment and Retail verticals).
Again, when it comes to targeting your audience, it’s about:
Who they are.
Where they are.
How they are behaving online.
Where their interests lie.
In fact, the report demonstrates the effectiveness of targeted ads, based on this kind of data, including:
- Demographics
- Location
- Life Events
- Interests
- Financial Attributes
Let’s look at some of the numbers:
Marketers in the Health vertical saw a 500% lift (6x the starting point) when they targeted based on demographics, financial attributes and interests.
In the Telco vertical there was a 900% lift (10x) based on the same three data categories. It only got bigger from there:
Education = 2500% (26x): demographics, life events, interests and financial attributes.
CPG = 2700% (28x): location, interests, and financial attributes.
Entertainment = 2900% (30x): location, demographics, interests, and financial attributes.
Retail = 5500% (56x): location and demographics.
The point?
The numbers are out there to show the effectiveness of targeted advertising. And they’ve been emerging in the last couple of years. LinkedIn shared results from 8 of the most effective client ad campaigns back in 2012, but they send the same message:
Understanding your digital ad channels and knowing your audience make for a sound approach to targeted advertising—and from there, the step to individualization is manageable, especially when you incorporate reader content preferences and leverage a strong taxonomy system. Stay tuned . . .
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