Improving Engagement and Performance in Digital Advertising

Improving Engagement and Performance in Digital Advertising

          
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Improving Engagement and Performance in Digital Advertising

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  • Advanced Techniques Deliver Higher Relevance

    Standard targeting techniques, such as site-based targeting when used on its own, often do not deliver ads with a high level of relevance to consumers. Site-based targeting, in its simplest form, is the kind of digital targeting that serves ads determined by the content of the website that a consumer is visiting at that moment. For example, someone who surfs a sports-themed website may receive ads for a gym membership. However, site-based targeting does not tell the advertiser whether the sports fan is actually in the market for a new gym. Slightly more sophisticated behavioral targeting uses information collected by the advertiser—potentially in combination with third-party data—to reach consumers based on their previous online activity. This kind of targeting can identify groups of consumers who are actively looking for a new gym by, for example, pinpointing those online (or mobile) users who have browsed Web pages about fitness centers or even visited the membership information page of a fitness center’s website.

    The big advantage of behavioral targeting is that it identifies users whose previous online actions more directly indicate that they are likely to be interested in a company’s product or service. It helps uncover what users are considering purchasing. Since behavioral targeting involves deciding whether to buy an impression on a user-by-user basis—in real time—it depends on programmatic buying using real-time bidding. By tracking the consumer’s online actions until time of purchase, it can also ensure that users are not retargeted for what they have already bought or are no longer interested in—an oft-cited shortcoming of digital advertising and an annoyance for consumers.

    Until recently, advertisers faced a trade-off. Site-based targeting provided campaigns with scale but struggled with delivering relevance on a consistent basis. Standard behavioral targeting could deliver relevance but did not always provide adequate scale. Within the last year or so, some advertisers and their agencies have been employing more data-driven advanced behavioral techniques, in combination with existing techniques, to achieve the best of all worlds: to reach a large-scale, engaged audience with the right message in a cost-effective manner. (See Exhibit 1.)

    exhibit

    These data-driven advanced behavioral techniques identify and engage consumers across multiple digital channels. In the case of the fitness center, the advertiser can target users who have viewed the gym’s online videos, clicked on its paid search ads, or engaged with its website in some predefined way. While advanced techniques at first might appear to represent an incremental improvement, our tests found that they actually are a major advance—a step change in capability that has the potential to deliver substantial increases in targeting effectiveness and in user engagement. Even though standard behavioral techniques are often thought to decrease the reach of a campaign, our tests showed that advanced behavioral techniques perform differently. Advertisers can actually maintain reach while increasing performance by identifying new pools of high-value consumers. The increases we experienced were immediate and substantial, and there was also clearly the potential for additional incremental improvement over time.

    Many advertisers think that success in digital advertising is mainly a function of moving more money into online channels. Our tests show that how campaigns are constructed matters just as much as the amount of money spent. Those companies that use more advanced, data-driven capabilities will substantially improve performance and—perhaps even more important—gain information and learning that will give them a big advantage over competitors.