Despite having access to sophisticated analytics tools and reams of consumer data, many marketers are still taking a ‘scattergun’ approach. Dominic Trigg, managing director Europe at Rocket Fuel, discusses why this is an unsustainable approach.

After Royal Mail’s glowing financial results, their chief executive Moya Greene revealed that this was fuelled by an unlikely source. According to Greene, almost half of deliveries now consist of “junk mail”.

An increase in volume is of course great news for Royal Mail, but it also potentially means a growing pile of unwanted marketing materials landing on the nation’s doorstep. It would be nice to assume that this increase in volume is the result of a more targeted approach but a brief analysis of the contents of my own mailbox indicates this isn’t the case.

Other disciplines, such as display advertising, have evolved to target audiences much more effectively in recent years – matching receptive audiences with tailored messages using data. Why then is a scattergun approach still acceptable with print?

There really is no excuse for any marketers to ignore big data and analytics as customers’ tolerance for ‘junk’ continues to wear extremely thin. Targeting has morphed from an art to a science. It’s time to stop finger painting.

Waste not want not

Wastage has always been the elephant in the room when it comes to direct marketing (DM). But, as budgets are squeezed and ROI climbs up the agenda, wastage is becoming a big board issue.

With printed DM, the environmental impact of wasted paper is also a cause or concern as organisations come under closer scrutiny for their sustainability practices.

Even in the paperless arena, where big data creates big opportunities for marketers to carefully identify audiences, badly targeted messages are still prevalent.

How often have you been ‘followed’ around the web with adverts for things you clearly don’t want? Even in the sophisticated world of retargeting, some marketers are still waging a war of attrition with potential buyers under the misguided belief that if you hit them enough times with a message, they’ll eventually give in.

The persistence of this bombardment approach shows there is still room for agencies to build competitive advantage in this space. They should be embracing big data and programmatic trading technologies to help brands get under the bonnet of their advertising campaigns.

I am still seeing ‘Royal Mail’ type scenarios in the digital advertising space and tolerance for this approach is inevitably going to wane. Slowly but surely, “scattergun” approaches to digital marketing must become a thing of the past.

The future is here

The sophistication of digital advertising has risen well beyond anyone’s expectations in the last few years. Ad buyers can now effectively target, bid and buy consumer ‘eyeballs’ in milliseconds, based on live audience information.

But this sophistication has brought massive complexity. Via most advertising exchanges, ad planners have a selection of 12 attributes with a total of 145,710 segments of data available on which they can base their decisions.

If that isn’t a tough enough choice, the number of different possible combinations comes to 504 septillion or 504,216,244,224,000,000,000,000,000. If it took a planner 10 seconds to review each option, it would take 119,764,735,724,180,000,000 lifetimes to make the best decision!

No ad planners in their right mind are attempting this mythological-scale task, by manually reviewing data to make their choices. As with many industries before, we are now witnessing the industrialisation of online advertising, enabled by powerful algorithms and computers that can deliver ROI no human-optimised campaign can match.

It used to be OK to target online audiences based on demographics, when all you had to play with was a basic idea of audience profile and a limited list of content-specific websites where they might be. Generic adverts designed for a large audience of males or FT readers for example was as good as it got.

Now, the availability of behavioural, contextual and other data, and the ability to analyse this mix of intelligence in great detail, means that brand advertisers have a much richer view of who audiences actually are. They can see their browsing history, brand experience, and calculate their potential receptiveness to particular adverts, formats and executions in a matter of milliseconds.

Also, the online customer journey has evolved massively over the last two decades, and the latest IAB figures show that brand advertising is increasingly moving away from traditional formats towards digital. This reflects the shift in how content is being consumed, from offline towards online and, increasingly, via mobile devices.

At the same time, real-time optimisation technology enables brands to gather and critically learn from data as a campaign evolves. This might lead to a proportion of the campaign budget being shifted towards new key audiences that show the greatest lift in engagement, optimising the campaign’s effectiveness over time.

As the online world matures, it becomes increasingly important for brands to be able to reach consumers, whoever and wherever they might be, when they are most engaged and with the right message. In short, the old lens through which brands viewed consumers is broken and needs to be replaced with a more sophisticated approach that sees them as individuals. These are potential customers who know no bounds online, and increasingly share and experience their entire lives on the internet.

The explosion of data and new technologies offers incredible opportunities for brands to be far more sophisticated with how they go about targeting consumers. As such, buying media within a ‘walled garden’ environment, such as an individual ad network, is now too restrictive and can be wasteful.

Ad exchanges on the other hand allow brands to track people throughout the whole of their online journey, and make sure that the right people are targeted with the right message at the right time, at every stage of the purchasing cycle and on every channel – from logging onto Facebook and updating a social media profile to checking the weather to researching a philosophy project online.

In conclusion, simply using demographic and website data to target group audiences is looking increasingly blunt, and is inherently wasteful. Likewise, not being able to reach customers, or losing them half way down the purchasing funnel, is no longer an option. Advertisers need to become channel and network agnostic to reach their key target audiences and effectively influence consumers online.

Dominic Trigg is Managing Director Europe at Rocket Fuel
@dominictrigg

http://rocketfuel.com/

Real-time bidding (RTB) has taken the digital advertising world by storm, delivering unbelievable results in direct response campaigns within just a couple of years of inception. But advertisers are quickly realising that RTB’s potential reaches far beyond just driving instant clicks.

The ability to target audience segments by the millisecond, based on numerous demographic and behavioural indicators, holds many possibilities. Throw in fast-developing technologies such as dynamic creative and in-banner surveys, and the potential for RTB to influence all stages of the buying process, not just the final hurdle, becomes clear.

One of the biggest opportunities for RTB is in brand building. Building a brand is an art, requiring multiple consumer touch points over what can be a significant period of time.

The deep audience understanding, relevance and timing of advertising needed to build a brand are found at the heart of RTB. This is why the next big online advertising battleground will focus on a new kind of RTB: Real Time Branding.

However, recent research by eMarketer shows that just six per cent of agencies are able to recognise their customers’ interest in real-time, while the average age of in-market media is three to six months. It is unthinkable that this can continue much longer in these days of the immediate-fix, where Twitter and Facebook spoil us with up-to-the-second updates about our friends and the rest of the world.

Agencies are starting to realise that they need to be faster at turning big data into relevant ads, but there is clearly a long journey ahead for most.

Getting ahead

Brand marketers often rely on click-through rates to measure the impact of their campaign on their audiences, but this measure does not always relate to the actual campaign. Clearly, if a brand is trying to raise awareness but an ad does not explicitly call for action, it is unlikely to result in a click even if the message has been seen and absorbed. Rather than rely on this one measure, technology now enables in-depth feedback from consumers to be used to optimise campaigns in real time and to directly target brand metrics using brand campaigns.

As an example, during a recent campaign we ran for Epson, unbranded, in-banner surveys were used to measure consideration for their printers amongst both test (i.e. exposed to the adverts) and control groups. The results found an almost inverse correlation between the audience segments that showed strong CTR and audience segments that experienced a lift in consideration for the brand. Advertisers can today gain a more accurate insight into what works and improve the ROI on their digital advertising campaigns, while agencies using this technology can gain competitive advantage and grow their business.

The future

Increasingly, I am seeing brands giving audiences more opportunities to provide feedback in real time. As digital technology improves apace and our digital presence become central to our everyday lives, the only way to keep up is to have an ongoing dialogue questioning people in real-time and adapting campaign messages and targeting automatically. Carrying out two surveys a year just won’t cut it anymore.

Direct response campaigns have seen huge percentage point increases in conversion rates using RTB, creating vastly more impact for their advertising pound. As the industry now trades on sophisticated exchanges to create the most targeted and measurable advertising an industry has ever seen, it is inevitable that budget holders will appreciate that real-time technology is as critical to successful online brand building as it is to direct response campaigns.

Dominic Trigg is Managing Director Europe at Rocket Fuel
@dominictrigg

http://rocketfuel.com/

Since the dawn of advertising, marketers have been developing complex econometric models to prove the worth of their ad work. The click-through seemed like the answer everyone had been waiting for; it gave a clear, comparable measure that an advert had been seen and acted upon.

Fast forward twenty years and the way we use the internet has changed dramatically. As a result, those chasing click-throughs as the objective of all campaigns have been disappointed by low conversion rates and a diminishing ROI. Yet, marketers still cling to click-through rates (CTR) to demonstrate success because it offers rapid measurement and instant results.

In reality, consumers are not all sat at the bottom of a magic purchasing funnel waiting to be tipped into a sale. As the customer journey changes, so too must brand advertisers’ approach to engaging with them online.

Beyond CTR

While CTR can be a useful indicator of success in some cases, it can only ever effectively measure an advert that calls for an instant direct response – alongside a relevant piece of editorial, for example.

As digital media has evolved, people have spent an increasing portion of their work and social lives online. Now, it is fair to say that the majority of customer touch points will occur in this environment. This creates innumerable opportunities to engage with the most appropriate audiences at every stage of the purchasing process, from awareness, brand building and familiarity through to creating buzz, recommendations and sales.

To chase clicks at all costs is to ignore a significant and valuable proportion of the digital population; the people that aren’t buying your product or service now, but may do tomorrow, next week or at any time in the near future.

comScore research suggests that 63% of clicks come from just 3% of the online population. This goes some way to demonstrating the vast opportunity that awaits marketers beyond the traditional methods of advertising, and where first-movers are seeking their advantage.

Brand building blocks

CTR then should only ever be seen as one of a number of building blocks of campaign planning and evaluation – especially for those looking to have a long-term effect on sales and customer loyalty by building their brand. Otherwise, you will be in a far weaker position than those that have invested in brand advertising when you come to the party.

Studies have shown that people expect brands to approach them online – as long as it is with relevant content. And, although it demands a sophisticated understanding of behaviour to engage effectively, it is not as difficult to foster these relationships as some people think.

Continual advances in technology make it possible to identify audiences based on behavioural, contextual and other data, to help brands create more effective campaigns. These campaigns take into account everything from previous purchasing habits to the time of day and even the weather.

The results of online brand advertising campaigns have been phenomenal. Just because an ad hasn’t been clicked on doesn’t mean it hasn’t been seen. Tools such as in-banner surveys can be used to prove that brand-focused messages have been seen and understood; for example, that an FMCG brand is healthier, or that a new car model is more energy efficient, than its competitors.

The virtual battlefield

Real-time optimisation technology can be used to ensure these messages are finding the most receptive audiences, thus propelling the brand message further and casting a wider net of engaged consumers online. Campaigns can now ‘learn’ what is working and adapt accordingly, to improve targeting and effectiveness.

Technology can also be used to ensure that this audience is targeted in the right way, for example frequency capping systems ensure that potential customers are not over-exposed to the same advert, avoiding fatigue.

Those that are embracing new media opportunities and leveraging powerful campaign and measurement technology are engaging with a wider and more targeted audience online, and are seeing incredible results. In the current economic environment, this is vital: to both achieve and demonstrate strong results that can be used to shape future campaigns.

Recent IAB research shows that online is the most cost effective way to increase brand awareness or change perceptions. It is hardly surprising that global adspend studies constantly report an uptick in digital. This trend will undoubtedly continue as new media formats and internet connections evolve.

Dominic Trigg is managing director Europe at Rocket Fuel.

Trying to sell pizzas? Your target market should be young men who like watching football on TV, right? And if your product is a bread roll, your customer is likely to be a mum who makes packed lunches for her children.

Think again.

It’s time to move beyond reinforcing traditional stereotypes. High volume online advertising gives marketers an opportunity they’ve never really had before – to rapidly identify new target audiences with a strong likelihood for purchasing their products. And the results are often surprising.

Rocket Fuel has run a number of campaigns that produce counterintuitive data. For a quick-service restaurant pizza brand, some of the strong drivers of conversion activity were predictable such as coupons and discount offers. But the highest lift in conversions came from people browsing for engineering and technology content. The bigger the text in this word cloud, the stronger the conversion signal for sites relating to that category.

Rocket Fuel’s campaign for a high-performance running shoe brand showed that, unsurprisingly, among the strong drivers of conversion were health, sports and outdoors. But the campaign also discovered that serious runners make the most of their downtime by consuming lots of celebrity gossip, world and business news, as well as TV and video.

And how about the assumption that mums buy bread rolls? A campaign for a major FMCG company for ready-to-bake rolls showed that good drivers for conversions included sites about shopping, pet food and theme parks. But philosophy related sites came out as the top driver of conversion.

With any new campaign then, it is worthwhile diverting a small proportion of the budget into audience experimentation – looking at the types of people you should be targeting and taking into consideration factors such as the time of day, weather, content and context.

With the increase in the availability of behavioural, contextual and other data, brands can get a much richer view of consumers. If philosophy searches are popular with your target audience, real-time technology enables brands to gather that information and learn from it. It can then make sure that as the campaign evolves, it optimises its effectiveness and targets those who are most likely to buy at exactly the right moment.

The evolution of how we use the internet, and advances in technology are forcing brands to think about consumers as individuals, rather than part of a wider audience. This means that demographic tools and descriptions are looking increasingly blunt. Likewise, thinking of groups based on channels is wasteful and outdated.

Now is the time for marketers to think even more smartly and make sure that budgets are spent as effectively as possible. If marketers continue in the same way as they have always done, without ongoing testing, a significant proportion of the budget is likely to be spent not just on preaching to the converted, but also to the disillusioned and irrelevant.