Today’s always-on, multi-device-using consumers have never been more reachable. But while increased connectivity presents a great opportunity for marketers, capitalizing on this unprecedented access has proved to be challenging. Consider that in one week—or even over the span of a few hours—consumers may begin a product search on their desktop, scope reviews on social media using their tablet and compare email offers on their phone. This scenario has become the norm, so it’s key for marketers to connect the dots and respond to consumers in real time throughout the path to purchase.
However, constant movement between devices makes it difficult to gain a holistic view of each individual and targeting users via web cookies creates inaccurate and Incomplete audience coverage. Based on the latest analysis from Adobe Digital Index (ADI) as of March 2016, the average U.S. consumer owns 7.2 internet-connected devices and uses three or more devices daily, yet the average marketer typically only identifies one of them during web visits. Moreover, the majority of marketers say that they don’t have a single view of their customers across channels,
Read MorePeople-based Marketing: An increased focus on profile marketing and the consumer journey is changing the way advertisers approach campaigns.
Today’s always-on, multi-device-using consumers have never been more reachable. But while increased connectivity presents a great opportunity for marketers, capitalizing on this unprecedented access has proved to be challenging. Consider that in one week—or even over the span of a few hours—consumers may begin a product search on their desktop, scope reviews on social media using their tablet and compare email offers on their phone. This scenario has become the norm, so it’s key for marketers to connect the dots and respond to consumers in real time throughout the path to purchase.
However, constant movement between devices makes it difficult to gain a holistic view of each individual and targeting users via web cookies creates inaccurate and Incomplete audience coverage. Based on the latest analysis from Adobe Digital Index (ADI) as of March 2016, the average U.S. consumer owns 7.2 internet-connected devices and uses three or more devices daily, yet the average marketer typically only identifies one of them during web visits. Moreover, the majority of marketers say that they don’t have a single view of their customers across channels, and only 20 percent report using cross-channel data and attribution to evaluate marketing, according to ExchangeWire. This is a problem, since without a complete picture, it’s nearly impossible to employ an effective and crucial cross-device experience. Enter people-based marketing (PBM), a strategic discipline that leverages data to connect brands with actual individuals across all digital devices and channels.
Back up. What’s the problem with cookies?
Once upon a time (or around five years ago), targeting through a cookie-based technology, pixel tracking, was marketers’ best option to reach “people”—a term used lightly as cookies are associated with web browsers, not specific people. Essentially, every time users visit a website, a pixel drops a web cookie into their browser that serves to follow and identify them anonymously. This method enables marketers to target ads to inferred audiences based on various criteria such as age and gender as determined by the user’s browsing activity. When one person equaled one browser and mobile usage wasn’t so prevalent, this targeting method sufficed. But obviously times have changed, and the rise of mobile served as the impetus for finding a more reliable alternative while also exposing cookie’s flaws.
For one, it’s commonly understood that web cookies expire and can be deleted. And when that happens, all targeting information and history of past interaction is lost. But in addition, and perhaps not as widely known, while cookies function well with desktop computers, they are not supported within Apple Safari, wearables and most notably, mobile apps. Given that mobile time spent has surpassed desktop and time spent with mobile devices is dominated by apps—the latest data from Yahoo’s Flurry analytics in June 2015 shows that 90 percent of consumers’ mobile time is spent in apps—this creates gaping holes in understanding any given consumer’s path to purchase. Not to mention, cookies can also be deceiving. ExchangeWire suggests that since mobile apps run independent of one another and independent from web browsers, a single person who utilizes multiple apps plus a web browser could appear as multiple individuals. On the flip side, multiple individuals could appear as a single person when a desktop computer is shared by a family. All of these factors have made it evident that cookies are an unreliable targeting method.
From pixels to (actual) people
The good news is that the industry is no longer reliant on pixel tracking through cookies to target users. Instead, some marketers are using PBM to uncover actionable insights from real people to make business decisions. PBM is not a new concept—the term was coined by Facebook in September 2014 and was quickly adopted into the industry lexicon. But since being introduced, it has taken some time for marketers to test the waters because employing this strategy requires a dynamic structure and ample resources.
In simplest terms, PBM is powered by the wealth of information marketers have on their existing customers to target the right people with the right message. The most sophisticated marketers are able to serve ads at the right time too. Through this valuable first-party data, PBM recognizes actual individuals (not bots, which make up more than half of all site visits) and responds accordingly across all digital devices. Ultimately, this method provides much greater insight on campaign performance and the customer journey; marketers gain visibility on who they are reaching and who is converting, which audiences are driving more revenue and what campaigns are driving conversions.
Marketers are able to serve the right message by uploading their treasure trove of offline data to the online world where it can be merged and matched with publisher’s data. Of course, serving the right message to the right person drastically reduces wasted ad spend. But this is not just a win for marketers; a relevant message is a win for consumers too. A study by Marketo indicated that nearly 80 percent of consumers worldwide say they will only engage with a brand’s offer if it’s based on their previous interactions with the brand. Unlike targeting broad segments with third-party data, PBM enables marketers to give consumers what they want—relevant messaging.
With an advanced structure in place, marketers can also control when ads are served. According to Signal, a leader in PBM, advertisers who are set up to leverage their data in real time can act on live intent signals, meaning they can serve ads at the right time (i.e., when consumers are in the market for the promoted product or service). Given the right person, right message AND right time, it should come as no surprise that in addition to reducing wasted ad spend, PBM also has a proven impact on campaign performance. A recent Signal study on PBM indicates that 60 percent of advertisers report higher conversion rates, while 63 percent say that they’ve improved click-through rates.
In the same Signal study, more than two-thirds of marketers said that first-party data provided the most powerful campaign lift and the highest increase in customer lifetime value. So, with more access to first-party and second-party data than ever, marketers are salivating at the opportunity to start (and continue) employing PBM. But as this can be a significant undertaking, it’s important to approach the process strategically.
Keys to success
With so much data at marketer’s fingertips, it’s especially important to be strategic with which data is used, when and how. Fundamental to effective PBM is leveraging both deterministic and probabilistic targeting. Deterministic targeting relies on definitive proof of a person’s identity which can be revealed upon login to sites like Facebook. This method is more accurate but has limited reach. On the other hand, probabilistic targeting uses other non-proprietary attributes, such as an IP address or geo-location, which deliver greater scale but with less accuracy. The two methods are strongest when combined and essential to painting a full picture of any individual.
Of course, a well-oiled machine is needed to manage the various streams of information that feed in continuously to create such complete profiles. Considering the multiple touch points a consumer may have with a brand both online and offline, it’s imperative to connect the dots behind the scenes in order to leverage the data effectively. Many marketers are utilizing a data management platform (DMP) to ensure a holistic and real-time view of their data. DMPs aggregate and synthesize all of a marketer’s people-based data—behaviors, actions, characteristics, first-, second- and third-party—alongside campaign data, across all digital touch points. The platform then provides actionable insights that lead to a seamless and targeted user experience.
Along these lines, it’s also important to synchronize media plans and buys across all platforms. The person being targeted should be the thread that ties all screens together. Otherwise, budgets, strategies and campaigns that are siloed by media or device will fuel the fragmentation fire, and in turn, diminish campaign effectiveness through inconsistent messaging and oversaturation.
People-based marketing can translate to offline media too
PBM is a strategic framework that can translate into other addressable media that exist offline. Although PBM is conceptually similar to “addressable media,” and the two terms are often used interchangeably, it’s important to note that they are not the same. While PBM can already be applied to certain offline media that have addressable functionality, such as direct mail, other offline media like TV, are not yet enabled for a true PBM play.
First, it’s important to understand that set-top boxes (STB) connect to a physical address and household (just like the Nielsen ratings panel) and these devices aren’t dormant; they are able to ingest any data type and target viewers accordingly. To employ addressable TV, an advertiser’s customer data, along with subscriber data (supplied by the TV provider) is sent to a third-party, such as Acxiom or Experian. The files are matched, stripped of personally identifiable information and then returned to the TV company. Currently, Cablevision, Comcast, DirectTV, Dish Network and Verizon Fios all boast STBs that can accommodate addressable TV. And according to Michael Kubin, EVP of media at Invidi, one of the chief technology platforms powering addressable TV, the outermost universe of households reachable by addressable TV ads is now 68 million.
In a recent interview with DMN Kubin adds, “We can identify anything you want. We can identify a left-handed juggling clown.” But, pulled out of context, this calls for some clarification. However impressive it is that Invidi can identify and target ads to that level, no company can ensure that the left-handed juggling clown is the one in the household who is watching. What if the right-handed clown is tuned in? This example illustrates why addressable TV is not setup for a true PBM play; it allows marketers to reach the specific households they want, but not specific people.
Perhaps in the future, all viewers will be required to identify themselves when they turn on the TV, similar to how Nielsen Local People Meter households operate. A system such as this would be integral to employing PBM on TV. Yet, even then there would be inaccuracies in the data, and therefore, in the targeting, so it remains to be seen if and how PBM will translate to TV. In the meantime, digital media offers the most comprehensive opportunity to employ PBM, and more and more marketers continue to adopt this strategy.
The forecast
A new report by Signal and Econsultancy from May 2016 indicates that PBM is the marketing strategy of the future. It goes on to claim that it’s being more widely adopted than ever, according to the 358 brand marketers and agency media buyers who were surveyed in the U.S.
One in four media buyers indicated that people-based advertising comprised more than half of their digital spend, and around 92 percent said that they would be rapidly accelerating their people-based media buys. The survey suggests that the growth of people-based, alongside addressable media can be attributed to how well this strategy performed compared to traditional display advertising. Case in point, 83 percent of media buyers said that this media performed better for their clients than traditional display ads, with 70 percent describing results as good or excellent.
“While Facebook Custom Audiences has whetted the industry’s appetite for addressable media, brands and agencies now want to extend this successful approach across the internet on the many other news and information sites where their customers go,” a spokesperson from Signal recently shared with Marketing Tech News. “People-based or addressable media is the marketing strategy of the future and one that will help advertisers spark meaningful interactions and one-to-one engagement with customers who are in the mindset to make a purchase.” In other words, the groundwork is clearly set for the success of these more advanced targeting techniques, and any brand not already looking into PBM should certainly make it their top priority to do so.