No One Wants to be Irrelevant

Today’s programmatic-buying algorithms require you to increase your relevancy by targeting fewer individuals but connecting with more of them.

For marketers wanting to connect with consumers in advertising’s not-so-distant past, the best approach was the shotgun approach. Say a bank wanted to sell its mortgage services. They’d load both barrels with a generic banner ad and blast it across the Web, letting the buckshot fall where it may. The approach was all about impressions; the thinking being that a large enough selection of real mortgage-hunters would stumble across the ad and make the click. All the uninterested-in-a-mortgage folks—the vast majority, to be sure—would simply keep on surfing. It was, in effect, the digital equivalent of mass-market TV advertising. Brands either didn’t have the mechanisms or the desire in place to target their messages with greater accuracy.

Enter the Algorithm

Of course, like most things digital, we’ve come a long way in a short time. Now we can target and sub-target our marketing messages and even change creative in real time to reach the audiences most likely to click an ad or otherwise engage with messaging. Technology and sophisticated algorithms have rendered the shotgun approach and irrelevancy obsolete—for a price. It’s been a price, however, that many marketers haven’t wanted to bear, as it was difficult to prove that precise targeting was truly that much more effective than the shotgun approach. For many, in other words, irrelevancy was still more effective than relevancy. That’s all changing: The cost of irrelevancy is going up.

Here’s why: Facebook (Instagram, etc.) and Google (YouTube, etc.) properties, and coming soon to environments like digital TV, are flipping the script and increasingly leveraging algorithmic-controlled delivery across the digital ecosystem. What this ultimately means is that people who have never indicated an interest in learning about mortgages will never see that mortgage ad. On top of that, the price model is flipping, too. Those marketers who want to employ the shotgun approach (and, yes, they’re still out there) will pay more for the privilege of overcoming the algorithm.

Digital Advertising’s Less Is More Approach

If a marketer’s primary responsibility is to connect with customers, targeting via these algorithms is good news. For those who think mass marketing remains the only way to reach conversion goals, the numbers tell a compelling story.

In the graph below, general targeting (the shotgun) nets 30 conversions per 1,000 impressions. The example data tells us, however, that there are smaller higher-converting sub-targets inside that larger group—and if marketers are able to deliver to them a targeted and relevant message, they’d convert at a higher rate. In the example, relevant messaging obtains 10 conversions out of 200. By identifying five sub-groups and serving each a relevant message gets marketers the same reach as general targeting, with 50 versus 100 conversions.


The Box, and What’s In It

This heightened level of targeting does place additional demands on marketers and their agencies. Marketers must understand their audiences and sub audiences in greater, more intimate, detail. Agencies must work harder to divide the placements—the box, if you will—where these sub audiences not only gather, but will be most receptive to a particular message.

Then there’s the issue of what goes in the box. Targeting is both a creative opportunity and a mandate. It is not enough to view these new targets merely as opportunities to serve the same message. Without paired situation specific creative and message the impact will be greatly reduced. But before this seems prohibitive, consider Adaptive Creative as a cost effective means of delivery. Measurement can reveal what messages are or are not resonating with audience segments and slices, giving agencies opportunities to adapt creative so it works more effectively. This, and placement optimization, help ensure that brands and messages remain as relevant as possible. So while all parties need to remain more diligent and pay attention to the data and act accordingly, it’s ultimately well worth the efforts. Because, after all, no one wants to be irrelevant.

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Nathan Zwilling
Nathan Zwilling

Nathan is not afraid to ask the hard questions. As Group Director of Digital Strategy, he focuses on holistic marketing efficacy across all marketing vehicles. With a special love for the variability and targetability of digital, Nathan has dedicated his career to creating real-world results by understanding what in marketing does and does not work, and uses these learnings to drive success. His team strategizes down to the last detail for our clients.