emarketer webinar: reaching the right audience—ad targeting trends

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©2011 eMarketer Inc. David Hallerman Principal Analyst O C T O B E R 1 3, 2 0 1 1 Reaching the Right Audience—Ad Targeting Trends Sponsored by:

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Join eMarketer Principal Analyst David Hallerman as he explains how getting through to those interested in a marketer’s pitch demands a blend of the right audience, the right medium and the right message.

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Page 1: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

©2011 eMarketer Inc.

David Hallerman

Principal Analyst

O C T O B E R 1 3, 2 0 1 1

Reaching the Right Audience—Ad Targeting Trends

Sponsored by:

Page 2: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

©2011 eMarketer Inc.

What we’ll look at today…

Primary and secondary goals: today’s display advertising market, and how that affects a marketer’s goals and approach

Targeting’s place in the scheme of things: how it helps greatly and reasons not to rely on it entirely

Choices for targeting tactics: at least 16 ways to target, and how they might fit into your marketing goals

Data types and sources: several pros and cons for getting and using data

Testing and measuring: ways to build targeted display campaigns interactively

Audience attitudes: how they influence data collection and advertising’s relevancy

Twitter – #eMwebinar

Page 3: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Marketing Goals, Targeting’s Purpose

(hint: the goal isn’t targeting)

Page 4: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Display ad spending includes:

• banners

• rich media

• sponsorship

• video

Page 5: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Over one-third of marketers cited improving segmentation and ad targeting among their leading priorities

Page 6: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Relevancy is key when marketers look to influence an engaged, if often diverse, audience

Page 7: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Publishers sell slightly more targeted ads for branding than for direct response

Page 8: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Jacob Shin, director of online marketing, Savings.com

“Our primary goal is, like most companies, twofold. One is create brand awareness and then, secondly, is to drive conversion.”

Twitter – #eMwebinar

Page 9: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Data supports targeting, which supports strategic goals, which supports ROI

DataTargeting

Goals

$$$

Page 10: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

But to get to a company’s real goals means building the pyramid top down

$$$Goals

TargetingData

Page 11: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Let’s look more deeply at the concept of targeting and several of its implications

Page 12: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Shawn Riegsecker, president, Centro

“When it comes to audience targeting, close enough is all

you need.”

Page 13: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

The holes in various targeting concepts are due to technology and its usage

Page 14: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Targeting Types

(and ways to blend them)

Page 15: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Top level: About 30% of advertisers cite content targeting as most important vs. the 70% who favor audience targeting

Page 16: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Shawn Riegsecker, president, Centro

“For brands, content as a proxy for audience and

making sure their brand is shown in the right

environment is critically important. To lower-tier,

direct-response-only types of clients, content is

meaningless.”

Page 17: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Content targeting is a time-honored method that has key benefits

Content targeting elements:Most traditional type: matches the content on the page with the expected audience for such content; think sports content, males 18 to 35 and beer

Often high-end online: the bulk of premium display ad space is bought with content targeting in mind

Appeals to: brand marketers are accustomed to using content as proxy for the audience they’re trying to reach

When it’s effective: supports the brand marketer’s desire to be associated with high-quality websites and trusted content

Caveat: some believe that content as a stand-in for the actual audience is an inexact form of targeting

Twitter – #eMwebinar

Page 18: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Both content and audience are equally important for online brand campaigns

Page 19: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

There are at least 16 different types of ad targeting, often used in tandem

Page 20: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Audience-focused ad targeting depends most highly on these methods

Page 21: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Content-oriented ad targeting depends more so on these methods

Page 22: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Used the most: three basic targeting techniques

Page 23: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Another study: demographic and behavioral targeting most important

Page 24: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Demographic data supports most forms of audience segmentation

Demographic targeting elements:Timeless: slices up the audience by elements such as gender, age, income and education

Flexible: also includes categories such as moms or dads, race and ethnicity

Easily obtained: among the most freely given data types

When it’s effective: enhances nearly all other types of targeting by better identifying the audience

Caveat: still a proxy method, because all the people of any group rarely have similar desires

Also: following demographic cues can cause marketers to miss out on other groups that would be open to their pitch

Twitter – #eMwebinar

Page 25: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

However, US mobile advertising, still emergent, leans toward demographic and geographic targeting, less so behavioral

Page 26: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Targeting by behavior is a wide-ranging way to reach the audience

Behavorial targeting elements:Profiles audience segments: marketers identify the segments of people they’re looking to reach based on what groups of users have done recently

Behavior broadly defined: based on some kind of activity, including content viewed, forms filled out and search queries

When it’s effective: turns generic or remnant display inventory into something akin to good contextual placements

Also: many large publishers offer premium inventory on their sites for targeting by audience behaviors

Caveat: a portion of the inventory sold for behavioral targeting is not brand-safe, since the context cannot be fully vetted

Twitter – #eMwebinar

Page 27: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

About one-third of marketers cite data-driven behavioral targeting as a main focus of their entire digital strategy

Page 28: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

While behavioral most cited for video ad targeting, contextual strong too

Page 29: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Targeting by context can help find an engaged audience

Contextual targeting elements:Also called keyword targeting: uses text or other content data, such as page meaning, to automatically place display ads (other types of ads, too)

Cost-effective: a useful way for both brand and direct response marketers to reach an audience that indicates interest in a related topic

When it’s effective: gives marketers some of the benefits of content targeting but with the speed of programmatic buying

Caveat: just as with content targeting, contextual is often considered a proxy for finding specific, interested audiences

Also: the technology sometimes fails in discerning the exact context and gives poor, sometimes embarrassing, placement

Twitter – #eMwebinar

Page 30: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Holly Dunn, vice president of digital, Draftfcb

“We use look-alike modeling. It’s basically

saying that we know that our target responders

happen to look like this and, therefore, we can

target other people who look like that.”

Page 31: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Look-alike targeting creates new segments from new data gathered

Look-alike elements:Interactive: builds new segments that are similar to what marketers have discovered from previous target responders

Data source: generates statistical models based on first-party advertiser data, e.g., website visitors or offline purchasers

Expands: can also segment based on psychographics—groups based on qualities such as personality, locale, values, spending patterns, attitudes, interests and lifestyles

When it’s effective: highly useful for finding audience groups that are liable to find display ads relevant

Caveat: problems with scale can arise, especially for niche offerings where the look-alike pool can be small

Twitter – #eMwebinar

Page 32: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Look-alike targeting seems to promise exact and happy matches

Page 33: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Actual look-alikes are close, same group, but not exact (really another proxy)

Page 34: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Retargeting used more and more to find an engaged audience

Retargeting elements:Intent shown: serves display ads to an audience that has already indicated interest in the marketer’s offerings

Useful for multiple goals: can be highly effective for direct-response goals—and even some brand messaging

Search retargeting: marketers target the audience with display ads, typically banners, using search keyword data

When it’s effective: highly effective at conversions; can also give additional reach for brands using video advertising

Also: search retargeting works best with marketers’ own data

Caveat: can waste spending if the audience would have converted anyway without the display ad

Twitter – #eMwebinar

Page 35: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Most publishers offer marketers some form of retargeting

Page 36: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Accurate retargeting a prime reason for audience response

Page 37: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Genny Drennen, media director, Fraser Communications

“We may do display retargeting off of a

pre-roll video view in order to get additional

frequency.”

Page 38: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Retargeting for video, for branding, a common and growing niche technique

Page 39: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Increasingly, marketers see the most effective ad targeting blends methods

Page 40: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Increasingly, marketers see the most effective ad targeting blends methods

Page 41: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Gathering and Using Data

(gold, silver, bronze)

Page 42: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Data is the gold standard, the new black, etc., for online marketing

Page 43: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Four basic data types

First-party (shared): information that visitors provide directly to the site; often seen as the most valuable form of data

First-party (server): information gathered about visitor activities using cookies and web analytic tools

Second-party: information obtained through partner companies, such as registration data

Third-party: information that vendors develop through each company’s proprietary blend of offline and first-party data

Twitter – #eMwebinar

Page 44: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Most of the types of data used to improve marketing also help perfect targeting

Page 45: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

One way to obtain high-quality first-party data is by asking and giving, making the trade-off clear

Page 46: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Some of the most important data for behavioral targeting also needs to tie into a company’s systems

Page 47: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

65% of marketers say data about visitor behavior is only somewhat effective

Page 48: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Jaffer Ali, chief executive officer, Vidsense

“If you are a marketer, you must understand

the limitations of historical data.”

Page 49: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Three streams, mainly from FB and Twitter, flow into the social data pool

The social graph: shows who is connected with whom and their various activities; can be especially useful for behavioral-type audience targeting

Brand followers: similar to registration data on media, brand or retail websites, in that it’s detailed information voluntarily given

Real-time data: gives marketers insight into trends and attitudes about products, places and people; more helpful for creating content and contextual ad targeting models than directly for audience targeting

Twitter – #eMwebinar

Page 50: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Emily Iverson, director of display, Booyah Online Advertising

“We look at a user’s social circle…to find

their friends and family and people who look like them out in the

social world and then go ahead and target

them.”

Page 51: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Giving value to audience for their data is highlighted in the social space

Page 52: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

At its most effective, social data lets marketers connect the dots in their target audience

Page 53: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Social-site data marketers get from fans may not always work well for targeting

Page 54: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

As marketers gather data, they can use it in two main ways

Traditional approach: use based on how marketers categorize their target audience prior to running the ad campaign

Interactive approach: use based on an ongoing analysis of who responds in some way after the ads have run

Twitter – #eMwebinar

Page 55: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Carl Fremont, global media director, Digitas

“Most audience modeling is done up front, and then you’re

just refining it with further insight.”

Page 56: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

John Shea, vice president of strategy, Rimm-Kaufman Group

“Overall we do an array of targeting and just let the data guide

us to what works best.”

Page 57: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

57% of advertisers and 53% of agencies said 2 or 3 targeting segments are optimal

Page 58: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Testing and Measuring

(creating better results)

Page 59: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Nearly every detail involved in display advertising is ripe for testing

what segments to target

what targeting techniques to use

where and how to obtain data

what types of data work best

which display ad format(s) to use, and where

through what channel to buy ad inventory

what elements to put into the ad creative

what call to action is most effective

Twitter – #eMwebinar

Page 60: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Holly Dunn, vice president of digital, Draftfcb

“We test a lot when we begin all of our campaigns. So we have a two- to three-week

test-and-learn period where we validate our target, the

message, and the environment that we’re

running in.”

Page 61: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Only a minority of companies say that testing tactics are very effective

Page 62: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Measuring a tested campaign makes the next round of advertising more effective

Page 63: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Measured results from prior campaigns are a top source for improved targeting

Page 64: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

What Gets the Audience’s Attention

(and what loses it)

Page 65: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

More targeting has produced more relevancy, but still more is needed

Page 66: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

The audience tends to drop out or tune out if ads aren’t relevant

Page 67: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Internet users regularly contradict themselves about their desire for advertising relevance

Page 68: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

User attitudes about tracking create significant limits for targeting

Page 69: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Most people simply do not want to be tracked, to have their data collected, or to be targeted (perhaps it’s the language)

Page 70: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Giving users opt-out control is not unlike value exchange for prime data

Page 71: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Conclusions

Page 72: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

©2011 eMarketer Inc.

Starting with secondary goals can lead to targeting choices.

Consider the importance of reach vs. deeper engagement.

Where do you want to be in the marketing funnel?

A blend of targeting techniques creates more accurate segments.

Targeting gives marketers only so much audience information.

Better, more accurate data tends to cost more (caveat emptor).

Data from social sites offers useful segments, but might be overrated.

Testing gives marketers a broader array of measurable results.

Relevancy is the audience bottom line.

But audience resistance to being tracked or having their data collected can reduce targeting’s effectiveness.

Conclusions:Targeting helps reach the right audience

Page 73: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Online Data Targeting

Page 74: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Optimizing Media Drives Higher CTR

Media Optimization

Percentage of Campaigns that Performed Above Baseline

34%

80%

Audience Optimization

Page 75: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Content is (Still) KingImproving CPA with Media Optimization

Cost-Per-Action

Page 76: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Applying Targeting & OptimizationGoals

Establish and Communicate

Campaign Goals

Leverage Historical Performance & Targeting Data

Deliver Campaign and Generate

Reporting

Monitor Performance &

Adjust Targeting Techniques

Page 77: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

Thank YouJared M. SkolnickVP, Product [email protected]

Page 78: eMarketer Webinar: Reaching the Right Audience—Ad Targeting Trends

©2011 eMarketer Inc.

Reaching the Right Audience—Ad Targeting Trends

Questions & AnswersRegistrants will receive an email tomorrow that includes a link to view the deck and webinar recording.

For more discussion, please join us after the webinar on LinkedIn. Search for the eMarketer Group and click on Discussions.

To learn about eMarketer Total Access please visit www.emarketer.com/productsor contact us: (800) 405-0844 or [email protected]

Twitter Hashtag: #eMwebinar

Sponsored by:Presented by:David HallermanPrincipal Analyst, eMarketer, Inc.