iMedia Connection
Advertising.com's Jeremy Helfand looks at the nuances of targeting across ad networks and boosting the return on your marketing spend.
By now we all agree one of the great benefits of online marketing is the ability to track and measure. With that comes a greater ability to target campaigns. While targeting can provide tremendous impact and efficiency for an online campaign, it can also cause havoc if not used properly.
Make no mistake, targeting works. And targetability is one of the most powerful benefits of online advertising -- especially when it exploits the scope and diversity of large advertising networks. There are many ways to target when marketing across an online network. For instance, you can target specific audience segments by standard demographic parameters such as age, gender or income, or by specific behaviors such as consumers who travel frequently or read ESPN The Magazine. But both research and advertiser experience clearly indicate how critical it is to know your market and choose the right network before you invest in a targeted campaign. Taking a critical look at how and how much you target can make a big difference in your campaign’s ROI.
All targeting is not equal
What kind of targeting works best? Is some targeting always better than none? Will sophisticated behavioral targeting always yield better results than simple demographics? The answer is: it depends.
Even though behavioral targeting performs better in general than using no targeting strategy or targeting by demographics alone, the degree of improvement it delivers will vary significantly by market. Behavioral targeting is typically of most value for advertisers in niche product categories or with strong purchase consideration where there are definite links to traceable behaviors. For example, if you’re selling cars, targeting your campaign to consumers who searched Kelley Blue Book is a virtual no-brainer.
But demographic targeting also has its place. It tends to work best for advertisers in broader product categories where links to specific behaviors are less clear. For broad-interest advertisers, such as those selling travel services or consumer electronics, demographic targeting will perform nearly as well as behavioral -- and cost less. Demographic targeting is also more effective when substantial target market research has been done, although you may also find that the target demographic is different online.
The bottom line? Advertisers should be careful not to overpay for targeting. Research and understand your market thoroughly, then choose a targeting technique that will provide the greatest value for the yield given the product or service that is being marketed.
A mix can be the fix
One surprising characteristic of targeting is how little overlap there often is between an advertiser’s demographic and behavioral targets. One might expect campaigns directed at both targets to reach essentially the same universe of consumers. But in many cases, there is very little redundancy. Rather than duplicating efforts, a campaign that combines two targeting approaches may be a way to reach an ideal middle ground in terms of cost and performance.
Missed opportunities are expensive
How sure are you of your target market? Unless your research is perfect or your market crisply defined, focusing too heavily on a narrowly defined “ideal customer” can be costly. And once again, the degree of risk depends on what industry you’re in.
For advertisers with highly specific, easily identified in-market consumers, the risks of missing opportunities by overtargeting are small. Parents of children 0-3 are likely to purchase infant diapers, and few others are. So if you have that segment covered, you’re probably doing okay.
But for broad-based products or services, focusing exclusively on a perceived target market can exclude a significant percentage of your in-market audience. Focusing too narrowly on an ideal consumer target audience can leave large numbers of in-market sales on the table. Let’s use digital cameras as an example. Advertising that focuses solely on a behavioral target (say, people who report as being photographic hobbyists) or a demographic target (men 30-40), will exclude all the first-time grandparents, vacationing moms, and generous girlfriends who are in-market for new cameras. And those numbers can add up. In a harder-to-define market, a run-of-network campaign can actually help advertisers reach more in-market consumers than a targeted campaign--at a more cost effective CPM.
Especially for products that appeal to the masses, advertisers must carefully evaluate the volume of consumers inside and outside the target window in order to avoid costly missed opportunities.
The importance of reach
A fundamental and critical ingredient for successful targeting is reach. If your universe of potential impressions isn’t very large to begin with, paring it down further via targeting can be counterproductive.
Successful targeting requires reaching your desired audience on a sufficient scale, and in many cases, can only be achieved through a network advertising model. When targeting is employed within a large advertising network and across a wide array of online publishers, even targeted ads can reach a sizeable consumer segment. Specificity without sacrificing reach is a unique advantage of network-driven targeting. The number and diversity of publishers within a network is critical to ensuring that the audience segments you aim for are both precisely defined and statistically significant.
Target, yes. But do it right.
Clearly, advertisers should continue using online media to target specific demographic and behavioral audience segments. The key is to ensure you choose a provider with the reach to make it worthwhile and to avoid overpaying or overtargeting -- either of which can diminish the ROI of your campaign.
To benefit from the targetability of online advertising, advertisers must thoroughly understand their markets, know how much to pay for targeted campaigns, and assess which targeting approach best suits their products. Broader product categories often do best with demographic targeting, while a behavioral approach may work better for niche advertisers and considered purchases. And for some advertisers, using the two approaches together may provide the best net results.
Finally, don’t underestimate the size and value of your out-of-target but in-market audience. For broader product categories, a run-of-network campaign may be the best way to cover all your bases.
Jeremy Helfand leads Advertising.com's U.S. sales efforts as senior vice president of advertiser sales. Helfand works with clients and agencies on performance-based marketing programs that deliver superior return on investment. Advertising.com conducts strategic direct-response and brand marketing campaigns that guarantee bottom-line results for its clients. From web ads to search listings, Advertising.com offers diverse tactical tools, innovative thinking and the most expansive reach in the industry.
In 2004, under Helfand's leadership, Advertising.com's sales organization was awarded the iMedia ASPY award for Best Advertiser Customer Service. Advertising.com's sales organization has also been recognized over the past three years as one of the industry's best.
As an advocate for the development of interactive advertising, Helfand has participated in, hosted and moderated several key internet advertising industry events for the DMA, eMarketer, iMedia, OMMA and more.
Prior to joining Advertising.com in 1999, Helfand worked for Arthur Andersen where his responsibilities included managing consultative services for technology companies. Helfand received his B.B.A., Summa Cum Laude from Loyola College in 1993, and is a candidate for an M.B.A. at Johns Hopkins University.