State of the Industry. How marketers match campaigns with the right audience

Transcription

1 State of the Industry How marketers match campaigns with the right audience

2 Table of Contents 3 Introduction 4 Executive Summary 6 If you build it, will they come? Not so easy 9 The big question: Standard or custom? 15 Don t forget the objective 17 What s in the (black) box?! 19 Conclusion 2 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

3 Introduction Despite the rise in system-gaming dating apps like Tinder, it s common knowledge that the chances of finding your soulmate are astronomically low. Digital marketers might not be looking for a love connection, but they definitely are seeking consumers with whom they can make solid connections. Ideally, a group they can use as a foundation on which to build strong, active audiences that expand their reach. Getting audience building right becomes even more important as more marketers buy their audiences programmatically; 60 percent are doing so already, and emarketer projects that programmatic spending will increase by 39.7 percent this year, reaching $21.55 billion. As marketers scale their efforts to target new prospects, anything that improves efficiency and effectiveness will help to avoid ad waste. Likewise, any leak in resources will grow right along with rising budgets. To get a sense of how marketers from all corners of the industry approach audience building, both in terms of their challenges and their triumphs, we surveyed 183 digital media professionals from brands and agencies. As in most relationship building, the key to growth is a custom, personal approach and a higher degree of trust --- between marketers and their partners. DIGIDAY 3

4 Executive summary How well do you understand how audience data segments are developed and made available by third parties? The rise of programmatic audience buying has created a transparency problem: Over 30 percent report little to no understanding of how standard audience segments are created. The purchasing of standard audience segments creates significant inefficiencies and ad waste, as marketers can t accurately account for the audience they ve purchased. 21.8% Not too well 19.9% Well = 12.2% Not well at all 35.9% Somewhat well 10.3% Very well % Buying standard segments 3.8% Buying custom segments 11.5% Both result in the same amount of waste 46.2% I don t know Which of the following buying tactics leads to more significant levels of ad waste? 4 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

5 % A lot of control 28.0% Some control 61.0% Not enough control 6.1% No control at all Marketers feel alienated from the process of audience modeling; a majority report that they have little or no control over the process. How much control do you feel you have over the audience modeling/scaling process? Custom audience segments, with their more precise parameters, allow marketers to target audiences beyond demographics, making them a more suitable choice for conversion and loyalty campaigns. 29.0% Loyalty 26.0% Consideration = For which of the following marketing objectives do you prefer to use custom audience segments? 37.0% Conversion 8.0% Awareness DIGIDAY 5

6 If you build it, they will come? Not so easy Even the best publishers and platforms have a hard time reeling in the right group of people, and brands and agencies have to scour the web to identify even a small group of customers by which to influence their modeling. Who has it hardest? It s difficult to tell and the data are split 50/50 with brands, agencies and publishers all reporting that it s tougher for them. In particular, 58 percent of marketers on both sides of the buy/ sell divide struggle with being able to stretch individual audience member profiles across channels to maintain persistent identities. This capability is essential to anyone looking to expand to an omnichannel strategy. 36.6% Targeting attributes and keywords that really matter 7.0% Inability to reach individuals due to ad blocking = Which of the following have been the biggest challenges in reaching your audience? Select your top % Finding more individuals that match your target audience 47.3% Identifying the attributes that really matter 58.6% Tracking individuals across channels 6 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

7 Before those profiles can take shape, however, marketers need to identify the attributes by which they build their audiences, and 47 percent say this is one of the most difficult aspects of targeting an audience. Another 50 percent say that finding more people who look like their target audiences is the most challenging. So we ask: Which is harder, building a precise, relevant audience, or scaling that audience while maintaining its integrity? Sixty-four percent agree that the primary challenge in audience targeting is scaling the audience without sacrificing the quality. Building a strong core audience is certainly time consuming and includes a lot of metrics, extending that audience and maintaining addressability seems near impossible. Which of the following is more difficult for you when building an audience? 64.5% Scaling your core audience using lookalike models, scoring, overlaps, or other extension techniques 36+65= 35.5% Building a strong core audience DIGIDAY 7

8 MORE DATA OPTIONS, BEYOND DEMOGRAPHICS, FOR AUDIENCE BUILDING. Claire Alexander vp, head of marketing at AddThis While some organizations are just starting to get a taste of what s possible with programmatic marketing, others have already set up their own kitchens -- testing, experimenting and learning about what methodologies will work best for them. Programmatic is supposed to deliver more efficiency through faster time-to-market and better access to targetable audiences; the reality is not always so rosy. Just like in cooking, access to the right ingredients makes all the difference: Success in programmatic requires the ability to repeatedly assemble and engage high-quality audiences. Unfortunately, a limited view into the processes of audience creation and modeling inhibits marketers ability to tweak their data and deliver the superior results they crave. This survey validated a lot of what we ve seen in the field and revealed several areas that should have simple solutions. Specifically, we learned that marketers need: Demographic data (age, gender, sex, etc.) is extremely important for identifying where target customers are in their life and what related needs they might have. Behavioral data (lifestyle, hobbies, media behavior, etc.), on the other hand, offers marketers invaluable insight into the actual interests of prospects and customers. And, when it s fresh, online behavioral data can really drive campaign performance. MORE EFFICIENT WAYS TO SCALE CUSTOM AUDIENCES. While standard audiences can power awareness and consideration campaigns, conversion and loyalty campaigns require something more specific. Most marketers choose to build custom audiences, but are challenged to achieve appropriate scale. There is a real need for partners who can help create a high-quality seed audience and then model that audience for precision and reach. MORE TRANSPARENCY AND CONTROL WHEN BUILDING AND SCALING AUDIENCES. For programmatic to grow, marketers need to trust that the audiences they buy are built with quality data and scaled with addressable users, not bots. In this survey, marketers were nearly unanimous in their desire for more transparency and control over audience creation and modeling. To achieve the promise of programmatic marketing, organizations must be attentive to the quality of the data they work with and the audience building methodologies they employ. Further, data partners must be willing to build trust with their partners by providing transparency into their audience composition and scaling techniques. Truly, the promise of programmatic is limited only by our own willingness to collaborate and experiment. 8 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

9 Getting to know you Determining which attributes matter most seems an easier task, and the most sought-after range from the old school (48 percent said age, which is still the key datapoint for discerning where people are in their lives) to the newlyavailable (hobbies and lifestyle were selected by 45 percent, a window into what gets a consumer going). Of course, the highest-rated attribute category, media habits (selected by 50 percent), tells marketers where to reach their targets and how they ll choose to interact. Taken together behavioral and demographic data creates a more accurate and targetable picture because behavior provides the context that demographic data often lacks. Which of the following user attributes are most important when defining your target audience? (Select all that apply.) % Age 33.9% Gender 34.4% Brand preferences 45.2% Hobbies/Lifesyles 50.2% Media habits 42.5% Location 28.5% Occupation 27.4% Salary 13.4% Other DIGIDAY 9

10 The big question: Standard or custom? Programmatic audience buying promises more efficiency and growth by tapping into data marketplaces where digital marketers can shop for standard audiences or push through custom audiences. Standard audiences are off-the-shelf, pre-built segments that are purchased for immediate activation at scale or combined to address multiple goals and used in targeted media buys. Bryan Sherman, VP/Director of Programmatic, Media Tech at DigitasLBi said that these standard segments are a classic black box. Buyers don t know what signals went into building the segments so, Sherman says, the net [effect] of this is that a car intender segment will include both a user who has test driven a car and is now looking to get the best deal in their area as well as a user who searches for brand new Cadillac to figure out the name of The Clash song they heard. Custom audiences, on the other hand, are built by segmenting unique data points from a single source or combining various data sources. These audiences are typically used for more nuanced and focused campaigns or as a high-quality seed for look-alike modeling and extension. In both cases it s the ability to garner insights that matter. Where programmatic audience buying is most effective is when a brand clearly defines this objective and allows their media buying to focus on achieving it. Bryan Sherman says, Without audience buying, you will still have conversions on site and generate revenue, but you will not be able to spend the next dollar based on what you have learned from the last dollar = Which of the following better describes what custom third-party data segments mean to you? 73.8% Generating a unique audience segment from third-party data 26.2% Combining standard/pre-built audience segments 10 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

11 Despite the apparent advantage, the largest group of respondents is buying audiences at a 20/80 split (20 percent custom, 80 percent standard). It may be that standard segments are more widely available, less expensive and/or seemingly easier to work with. Or is it simply a first step into programmatic adoption toward customization, relevance and personalization? The fact that 9 percent of respondents are buying 100 percent custom audience segments, while a small number hints at more complex motivations. What s strange is that marketers disproportionately use standard audiences, but report only mediocre performance. When asked about performance, respondents said that standard segments delivered at or below their expectations. These products aren t tailored, so like an off-the-rack suit, they re not a perfect fit. About what proportion of your audience buys are custom versus standard? % 0% custom, 100% standard 32.7% 20% custom, 80% standard 14.1% 40% custom, 60% standard 17.9% 60% custom, 40% standard 10.9% 80% custom 20% standard 9.0% 100% custom, 0% standard DIGIDAY 11

12 A targeted fit is key for marketers who, according to Bryan Sherman, need to trust in the quality of their data above all, else Quality of and trust in the data is what matters whether you are talking about demographic, behavioral or any other targeting mechanism. As data becomes a currency, quality data become the gold standard. When designing an audience, it is more important to believe in the quality of fewer data inputs then the potential value of many. Marketers that build custom audiences are much more pleased with the their campaigns performance. Among those surveyed, 34 percent of respondents say they re satisfied or very satisfied. Since custom audiences are built with more specific criteria, marketers are better able to home in on their target audience and reduce waste (and budgets). How satisfied are you with the performance of custom data segments? % Very satisfied 28.7% Satisfied 54.5% Somewhat satisfied 7.9% Not too satisfied 2.0% Not at all satisfied 12 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

13 Don t forget the objective If respondents are more satisfied with custom audiences, why are they buying more standard segments? Seventy-two percent admit that buying standard segments leads to significantly more ad waste than their custom alternatives. In the end, it might come down to tactics. Standard segments are most often used for awareness campaigns which aim to cast a wide net with high-level messaging, feeding the funnel. Often, the performance of these campaigns is what influences segmentation and custom audience building. Less knowledge about their ideal profile leads to less potential for accuracy, resulting in a spray and pray mentality. 13% Loyalty 29% Consideration For which of the following marketing objectives do you prefer to use standard audience segments and for which do you prefer to use custom audience segments (keeping in mind ROI)? Select one segment type for each objective = 11% Conversion 47% Awareness Standard DIGIDAY 13

14 While the level of specific targeting might be less than satisfying, it might not matter at such a high level. For which of the following marketing objectives do you prefer to use standard audience segments and for which do you prefer to use custom audience segments (keeping in mind ROI)? Select one segment type for each objective. 29% Loyalty 26% Consideration = 37% Conversion 8% Awareness Custom segments are more widely used for conversion (69 percent) and loyalty (56 percent) campaigns that come further down the funnel. These campaigns need to be more specific targeting; there is less room for error. The more you know about your customers and how they behave, the better custom audiences will perform and convert new customers that look like your current customers. This added layer of information gives marketers the confidence to build smaller, more precise audiences. Jon Reily, vp of multi-channel commerce strategy at RazorFish, sees value in standard segments, but also anticipates that the use of custom will rise. We re looking at a time where every effort needs to be more personalized. We can t just go out there with a wide message, even one that s targeted by some broad definitions, and hope for the best. Bottom line: When it comes time to make a sale, precision matters, and respondents overwhelmingly go custom to avoid the ad waste that comes with a broad approach. Custom 14 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

15 What s in the (black) box?! A lack of understanding around how audiences are built could be what drives marketers to standard offerings. In fact, 34 percent said that they understand these processes either not too well or not at all. That kind of confusion is a likely roadblock for anyone hoping to get more experimental with their buying. How would you rate the transparency around audience modeling and scaling techniques? Very transparent % 4.5% Transparent 28.8% Somewhat transparent 41.0% Not too transparent 12.8% Not at all transparent 12.2% I m not familiar enough with these techniques to say DIGIDAY 15

16 When it comes to audience modeling and scaling, things get even muddier. A majority, (see graph), said that the process was not very transparent or not transparent at all. Lack of transparency makes it tough to set useful parameters or know how prospects are qualified for audiences. The end result, according to 53 percent of respondents, is a campaign that identifies unqualified prospects. This sort of inefficiency, for a process that is supposed to make things more efficient, is driving significant ad waste. 32 percent reported campaigns that failed to meet specific goals as a direct result. The message just isn t reaching the right people. The consequences of such an opaque process go well beyond individual campaign results. The problem breeds a lack of confidence among marketers: 67 percent said that they feel like they had not enough control or even no control at all over the process of developing or scaling their audiences. What is the main consequence of this lack of transparency around audience modeling and scaling techniques? 0.0% Longer approval processes to launch campaigns 53.7% Unqualified prospects resulting from the campaign = 2.4% Other 30.5% Failure to meet specific campaign goals 13.4% Lack of scale in campaigns 16 STATE OF THE INDUSTRY FINDING THE AUDIENCE OF YOUR DREAMS

17 Conclusion It s clear that marketers are dissatisfied with the status quo of audience buying in programmatic. An overwhelming majority, 96 percent, agreed that the process surrounding audience building, and modeling could be improved with greater transparency. Even more, 97 percent, felt that transparency should be coupled with greater control for marketers, particularly over the modeling and scaling process. This might sound like bad news, but the growing signs of dissatisfaction also point the way toward the future. Marketers are ready to embrace the complexity of more nuanced audience buying techniques, and they want a seat at the table when it comes to seeing the solutions applied. If data partners want marketers to take their platforms for a road test, they ll first need to let them take a look under the hood. Only then will more brands, agencies and publishers have the confidence to go all-in on custom approaches that pull in tailored results. DIGIDAY 17