Just because you can hypertarget doesn’t mean you should

But perhaps marketers are going about it the wrong way? For example: only about three percent of American households are in the market for a car at any given time, so automotive advertisers appear to be wasting a lot of media dollars on consumers who aren’t going to buy one in the next few months. That’s why so many automotive advertisers target only auto intenders. But aren’t they missing the bigger picture?

The newest technology means addressable television and digital advertising now share data-based capabilities: data for targeting, data related to viewership, and data about consumer action. The proliferation of viewership across media types and delivery systems is daunting but advertisers can reach their audience wherever and however they are watching video, measuring results and improving effectiveness. Even though Google’s recent announcement deprecating the use of cookies presents a new challenge for ad targeting, it’s really more of a speed bump than a major hurdle.

We know the powerful combination of technology and data is able to put the right message in front of the right consumer. But it can also isolate product users into separate non-communicating groups. Referring to political advertising, Senator Mitch McConnell said, “We are drifting apart into two separate tribes with a separate set of facts and separate realities.”

But marketing politics and cars or toothpaste isn’t all that different. From the consumer’s point of view, most of the ads they see will reinforce already familiar buying patterns for goods and services. Consumers will increasingly be part of the Tribe of Toyota or the Tribe of Colgate.

Eliminating wasted reach cuts two ways

From the marketer’s point of view, it seems to be a dream come true: hypertargeting eliminates a tremendous amount of wasted media reach. Never again will marketers be haunted by John Wanamaker’s observation that only half of their advertising works. We’re actually at the point where it will all work, and demonstrably so.

This is good news, right? Well kind of, but not entirely.

Targeting only people who are in-market is a missed opportunity. It’s hard to fit brand-building into a hyper-targeted, hyper-measured short-term driven world. Put differently, marketers are measured and rewarded by the return on advertising investment of individual campaigns, by the sales generated directly by their ad dollars – the very bottom of the funnel. This ties into America’s addiction to quarterly financial results, which puts disproportionate pressure on sales today instead of brand-building for tomorrow.

The focus on short-termism damages more frequently purchased brands as well. If an advertiser only targets people interested in their product, at some point the prospect pool will run dry. Byron Sharp, author of How Brands Grow, believes the same hyper-targeting that creates “tribes” can lead to an over-focus on heavy users, whereas share growth comes from attracting new and low-frequency users.

Remember the acronym AIDA? It stands for awareness to interest to desire to action. With all the data and delivery technologies available today, marketers can target consumers at every stage of that journey with different media tactics as well as distinct messaging. The icing on the cake is that results can be gathered accurately and optimized at each stage and for each iteration of the campaign. That is where the bigger success lives versus just targeting smaller groups.

Taking the entire consumer journey into account

The consumer journey is a very useful road map for marketers, informing both media strategy as well as creative content. This is what a media/creative strategy might look like for a product in the consumer-packaged goods category:

To generate broad awareness, use national broadcast and cable to cast a wide net across age/gender/geography. Creative content highlights the product’s main selling points and includes a response mechanism such as a website or a phone number, offering a coupon, or additional information, or a dealer locator. Responses are collected and analyzed to define the most responsive target group and create look-alikes, which then populate the next stage.

Targeting interested consumers still uses a wide net, though considerably narrower than the top of the funnel. Reach look-alikes through both national and local addressable television as well as online video, which offers similar targetability. Databases of consumers likely interested in this category add to those already targeted. Commercial creative content should highlight a longer list of product benefits. Continue using response mechanisms, which further refine the target audience into those who are at the point of making a purchase decision.

The funnel narrows considerably at the decision point, so commercial content should include the product’s benefits versus competitors’. Since at this point the target audience is very well defined, media selection is predominantly local addressable television plus online video and display advertising.

Finally, we’re at the action point, the bottom of the funnel and the place where the consumer should be ready to pull the trigger. The target audience is derived as a result of optimizing on the characteristics of the “decision” group, above. The creative focuses on immediacy: Reasons to buy now may include a price incentive or other motivators to make the purchase. Media selection is very tight: any medium that can ingest and deliver consumer-specific data. Results are gathered and analyzed to define this group of product purchasers; look-alikes are added to the top of the funnel for the next iteration.

All told, addressability in all its forms is the newest and most powerful weapon in the marketer’s arsenal. But like any weapon it can either be used to great effect, or its potential can be misused and diluted. Knowledge and training in its use is essential to unlocking its potential.

By Michael Kubin, executive vice president of media, Invidi Technologies