My last article shared insights and best practices for developing an optimal personalization strategy with a focus on planning. But what about the equally important next step, targeting?
Good marketing is getting much harder and more imperative in today’s “noisy” world. According to recent research by Digital Connections, approximately 50 percent of consumers will disregard a brand if it bombards them with ads or if they perceive the ads as irrelevant. Targeting helps by optimizing your media dollars. Here's an example: Take a coffee brand and one of its buyers -- female, 25-35 years old, with a high disposable income, living in an urban area. While a good starting point for basic details on the consumer, using only demographic data for targeting will reach a number of similar households that aren’t actually in any other way like our target consumer, including noncategory purchasers. Right there, you've wasted your ad dollars.
To address gaps in targeting the right consumers, marketers can now access one-to-one granular verified purchase data, which provides a wealth of information such as lifestyle or price sensitivity. This allows marketers to create more specific promotions and messaging that can drive increased purchases and take advantage of increases in consumer spend by more than 14 percent with personalized media.
Verified audiences, or deterministic data (non-modeled data) defining audiences identified based on actual purchase behavior, are the foundation of any effective targeting strategy. Relying on demographic data alone results in shopper segments that are too broad, and other data types, such as survey data, are often inaccurate due to incorrect input from shoppers. Research from surveyed shoppers shows that two-thirds incorrectly reported their buying patterns versus their actual behavior.
Verified audience solutions connect brands and retailers to consumers and shoppers based on verified spending for a particular brand or a lapsed buyer or a decreaser in the category, allowing a direct connection for your highly defined creative execution. Using 100 percent verified purchase-based audiences derived from frequent shopper program (FSP) data uncovers a wealth of insights from hundreds of thousands of households.
Turning back to our aforementioned coffee drinker: Say a well-known coffee brand is launching a new line of Fair Trade coffee drinks. Through household-level purchase data, the brand learns that this shopper cohort prefers organic products, isn't especially price sensitive, often places orders on their mobile devices, drinks coffee throughout the day and likes to entertain. It also sees that the coffee drinker frequently buys K-cups and spiced products as part of her weekly basket. This is now highly specific data for which a marketer can build out a cohort and message appropriate to the target consumer.
Having a 100 percent verified target group at scale additionally allows the brand to more confidently look at predictive models to extend reach, drive awareness and meet the penetration goal. By combining actual household-level purchase data, the brand can use advanced predictive models to find others like our sample coffee drinker, creating a far more accurate scenario.
Multiple audience solutions are necessary, since customers are demanding personalization, and different brands have different needs. Brands with higher penetration might desire a greater audience reach to keep top of mind and maintain equity, while smaller brands are focused on a more specific group of consumers and known buyers.
These data also help the brand collaborate with retailers where the segment is likely to shop to create a co-branded marketing campaign. By running a multi-attribute model that predicts where this segment will shop and what they're likely to spend, both the brand and retailer are able to limit wasted impressions.
Maximizing Return on Ad Spend (ROAS)
To create an effective targeting strategy, incorporate the following:
- Set the Objective: Have a clear, well-defined purpose of exactly what the campaign is trying to accomplish for the brand. This will focus all campaign activities and help the team define what success looks like. Sample objectives can include acquiring new customers, driving trial, growing share, targeting high-propensity buyers, building loyalty and winning back lapsed customers.
- Build Audiences Around the Objectives: Ensure target audiences match the campaign objective. For example, if the objective is to increase brand penetration, target verified heavy category buyers and lapsed brand buyers.
- Develop Creative That Matches the Audience: Consumers who buy the competitor’s brand may look different from those who buy your brand. Experiment with multiple types of creative that reflect the makeup of each target audience.
- Manage Impression Frequency Between Audiences: Some audiences require more reminders to purchase a product than others. For example, lapsed buyers may need to be exposed to more impressions than heavy brand buyers.
- Measure and Optimize the Campaign in Real Time: Once the target audience is created, you'll need to keep a pulse on what's working while the campaign is live. Ask your measurement provider about solutions that can measure and optimize the audience’s performance while the campaign is still in flight.
By gaining a much more personalized profile of your target consumers, and then implementing the best practices outlined above, brands and retailers can achieve higher sales uplift than if they relied on demographic information alone.
Putting It Together
Optimized targeting clearly improves campaign results. But marketers must also continually test and learn through setting up measurement plans to understand all of the target audience variables, including which target audience drives the biggest uplift per each creative. The granular learnings should be combined with market mix modeling to optimize future campaigns.
My coffee-drinker example above is from a real campaign that ran. How did it fare? During the time our consumer was shopping at the store, the manufacturer offered her a promotion on her iPhone for its pumpkin spice Fair Trade coffee available in K-cups. Over the next two months, she increased her coffee purchases from the brand by more than 20 percent. The manufacturer saw a 9 percent lift across its portfolio from these initiatives, versus a similar campaign the previous year that relied on just demographic information. And best of all, the retailer achieved overall category growth.
In today’s retail environment, where many consumers are ready for an increasingly personalized experience, improved targeting has moved from a “nice-to-have” to a “must-have” component. The question is, are you ready to find the right shoppers?