Why does advertising still treat people like strangers?

If you’ve ever had the pleasure of listening to a stranger at a party talk incessantly about his recent surgery, his divorce, or his collection of porcelain kittens, then you know it’s not an experience you’re anxious to repeat. That kind of behavior — droning on about topics that aren’t relevant to those you’re speaking with — isn’t just impolite and annoying. It defies the norms of how people interact.

A lot of advertising is just like that stranger at the party. It approaches the wrong people at the wrong time and with the wrong message. Despite the oceans of data that companies have about customers, and the technology available to tailor messaging, a significant share of advertising still happens via the old “spray and pray” method. That’s why people with no kids see ads for diapers and baby food, and why grandparents see ads for party cruises.

Why targeting works

Targeted ads present a significant opportunity to reach customers more effectively. While this isn’t a new concept, it also isn’t being used to its full potential. The good news is that most media agencies have already become quite skilled at this, deftly sifting through data to build a highly detailed plan.

The next step, which is much less utilized, is for companies to tailor their creative to narrower audience segments. Right now, a company may present a spot with three slightly different executions for different demographics, but the fundamentals of the ad typically remain the same. That’s understandable since creative costs money. But, based on what I’ve seen in the market, the payoff associated with deeper targeting justifies the investment.

Consumers who see an ad with products and services that are relevant to them, packaged with creative that resonates with them (and even models who look like them) are far more likely to buy.

The evidence

• 78% of respondents to the Curalate Consumer Survey say they’ve discovered products on Facebook. That discovery isn’t serendipitous, though it may seem that way. Social media platforms allow companies to target customers far more accurately than mass media thanks to the ability to base ads on detailed user profiles.

• Virgin Trains recently used TV advertising service Sky AdSmart to target specific metro areas where audience members were far more likely to travel by train. The result? The audience seeing Virgin Trains spots was 50% more likely than a test group to be interested in the creative, and six times more likely to book tickets.

• Even small brands can benefit. When UK bike manufacturer Ribble Cycles wanted to target consumers using video ads, it created audience profiles based on gender, interest in cycling, and location. It then used artificial intelligence to dynamically update videos according to customer profiles on Facebook. The number of people watching the entire video increased by 837%, and the cost per result decreased by 42%.

You have mountains of data. Use it.

Agencies have volumes of data available to them through syndicated research firms that track customer behaviors such as previous purchases and browsing histories. But it’s worthless until you start sifting through it and separating signal from noise. Once you have a signal that seems promising, you can call in creative and start working with them to tailor spots accordingly. Be systematic about measuring the effectiveness of various spots so you build a convincing business case for continuing that process in the future. Clients are far more willing to spend on tailored creative if they see that it delivers a clear ROI, so you need to show them hard numbers.

At the same time, being over-zealous with targeting can raise privacy concerns. It’s easy to imagine applications that spook people. (For example, a firm used mobile phone data to target people in emergency rooms and sent them ads for personal injury lawyers.)

Sometimes finding that line comes down to common sense. Think about a store salesman a century ago. He would remember your name, the names and rough ages of your family members, and which sports teams you root for. He would greet you each time you came in and weave your information into his sales pitch. If he overplayed his hand by, let’s say, asking about your last doctor’s visit, you would have left and not returned. Digitally targeted advertising, essentially a form of communication, should apply those same principles.

In that way, it can’t just be handed off to an algorithm. AI systems are extremely powerful, but they can’t be trusted to make these kinds of judgment calls. The right approach to targeted advertising requires human oversight, and it likely always will.

Understand the relationship and the context, and tailor your message accordingly. And don’t bring up the porcelain kittens.

Simon Andrews is managing director of The Media Kitchen

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