Why Personalized Digital Advertising is the Future
By: Diaz Nesamoney, CEO, Jivox
Remember the movie Minority Report? Tom Cruise walks into a mall and is greeted by “live” billboards that address him by name and show him outfits he might find appealing. While technology isn’t quite there yet, we’ve entered an age in which consumers won’t engage with digital advertising unless it’s customized to match their tastes — and brands that understand this will thrive.
Digital media presents new possibilities to tailor advertising directly to consumer needs. Right now, this is a largely untapped opportunity for marketers, but a big wave of personalization, driven by the vast amounts of new data, is about to sweep through all of marketing.
The Evolution of Consumer Data
The first driving factor behind personalized advertising is the change in consumer behavior: the willingness to share personal information. Social media has accelerated this trend, and people now share everything online, including their likes and dislikes, where they live, where they’ve visited, what they’ve said, and what they’ve watched. This is a cultural, and perhaps generational, shift to sharing personal information in return for a more personalized experience.
It‘s also easier than ever to collect and analyze consumer data. Computing power and bandwidth have increased to a point where tasks that used to take hours can now be done in milliseconds, and cloud computing capabilities have significantly reduced the costs of storing, retrieving, and processing massive amounts of data.
Data has always been viewed as an afterthought in marketing. Marketers were used to doing post-analysis of campaign results, research, and sales data to try to understand how to market to their prospects and customers. But big changes are happening as we speak — marketers now view data as a strategic asset.
Reach versus Relevance
Secondly, successful digital marketing relies increasingly on relevance, not reach. There was a reason the term “mass media” was frequently used to the describe TV and print advertising—and even posters and billboards. They were all media designed for mass communication of the same, one-size-fits-all message. But without customized media, of course, there was no customized audience and, therefore, no advertising that could be customized to even a small audience—let alone to an individual. Creating audience engagement in the days before precise targeting and messaging was largely done by creative means.
When digital advertising began, creativity continued to play the role it has had in traditional media. Unlike with traditional media (especially TV), though, digital ads were often placed on the “rails” of a page, in standard-sized boxes (the so-called IAB standard ad formats), and this often caused users to simply ignore the ads. Many publishers also offered up “custom ad formats,” which included formats like page skins and intrusive “interstitials” that blocked users from the content they were about to read or watch.
So the battle to create engagement from users clearly cannot be fought with creativity alone. The other way to create engagement is, of course, by making sure an ad is relevant to the user and that it markets to the user in a very personalized way. Targeted media buys get us part way there, but personalization at scale is what brings brands closer to one-on-one relationship with users.
Brands that take the time and effort to create relevance using personalization and relevant content will win out by creating both media efficiency (i.e. the right message to the right person at the right time) and also engagement, as users see ads as being informative and giving them something of value. There is a shift occurring from viewing advertising in a “broadcast” mindset to a new “publishing” mindset, where the onus is on the brand to keep the audience engaged with useful content.
The Decline of Mass Media
Lastly, mass media is giving way to highly personalized media experiences. Prior to the Internet, media consumption while people were at work was minimal. But today, you don’t have to be sitting in front of your TV at home or your desk at work; your media travels everywhere with you on your laptop, tablet or smartphone.
But for marketers, the biggest problem with media delivered via the Internet is the significant fragmentation of audiences across websites. Social media simply added to this fragmentation. It also brought about a dramatic change in consumer behavior in that it unlocked an innate desire in people to want to share things. Mobile devices fueled this fire by making it easy to take pictures, check in, update statuses, post, tweet, pin, etc.
Relevance became a challenge in this fragmented media world. To address this issue, aggregators started organizing websites into “audience segments,” which made it easier for brands to buy, a group like “auto enthusiasts.” This was the first time marketers were able to see how technology, combined with digital media, could give them a great way to achieve both reach and relevance goals in a world of fragmented media.
Luckily, consumers are telling marketers what they want every single day. With the recent craze over smart devices, wearable technology, and the Internet of things, consumers are creating more and more data that tells the world what they do every day, how much they slept, what they like to eat, where they like to eat it, what they buy, etc. What consumers expect in return is smart, personalized experiences, whether it be in media, applications, or advertisements.
And with Big Data, that’s exactly what we can give them.