Commentary

Targeting Is Not A KPI

Within the digital media ecosystem we’re hearing more and more about two things -- data and social. In a world of both, the key idea is targeting. We now have the ability to find very narrow sub-segments of the population for our ads. For example, we can target 20-year-old males who watch "Breaking Bad" and also love to order Domino’s Pizza with ads on Facebook. We can also use data to find consumers who appear to be actively shopping for a muscle car or a loan. For traditional marketers, this sounds like heaven.

Since I began working in media more than 20 years ago, we’ve been talking about audience composition, MRI indices, demographic breakdowns and targeted ratings points -- all in an effort to help us find the right audience as efficiently as we can with our ads.

In our brave new digital world, we have all but eliminated the problem of waste, and it’s the buzz of the industry. We no longer have to worry about which half of our media dollars are wasted because none of them are when you properly utilize data to profile and find your ideal customers.

Or do we?

Something that seems to get lost amid all of this incredible technology is the fact that targeting is not a business goal. In fact, it isn’t even a marketing goal. Being as targeted as possible is important, but only if it serves a higher, measurable objective. Too often, we are measuring our campaigns against variables that may or may not correlate to the success of our business. Put simply, I would rather have wasted half of my media if I knew my ads had an impact than have a campaign with zero waste that no one notices.

I hope at this point we can all agree that banner ads are low impact at best. They are small; they are generally silent and usually live in extremely easy-to-ignore places on the pages our customers are reading. In short, they don’t do much. And there aren’t a lot of researchers out there who will tell you otherwise. (Trust me, I’ve asked.) The cold reality is that there is no amount of targeting that can make up for the fact that most consumers are blind to most of the ads they see online.

The goal of your media investment is always to deliver something for your brand or business. If the goal is traffic to your Web site, then click volume and cost-per- click are good metrics for you. But if your goal is to increase the number of customers who buy your products on your Web site, optimizing your campaign to deliver a low CPC or a high volume of clicks might actually hurt your campaign instead of helping it. 

Consider this: many consumers -- including some who are your most valuable customers -- may never click an ad for the rest of their lives. Does it really make sense to optimize your media campaign in order to stop reaching this audience? By optimizing on clicks you might actually stop reaching your most important customers. Yes -- we can measure post-impression actions (consumers who see an ad, then come to your site and make a purchase), but is that the metric we should be optimizing against? If targeting works, it might actually make more sense to make post-impression action rate your primary metric. But that is assuming that banners have an impact on the consumers who see them -- an assumption that we know simply isn’t true.

Which brings us back to the targeting discussion. If banner impressions don’t have a big impact on the non-clickers, and most consumers never click the banners they see, how can being targeted with our banner campaigns really deliver better results? And how do we effectively measure what we’re doing in digital if we’re not basing results on response rates?

The answer is surprisingly simple; Impact. The digital media industry needs to take advantage of the tools that are available in order to do a much better job of measuring the impact of our ads on the consumers who see them. When we do that, we will begin spending a lot more of our dollars on digital video and a lot less on targeted banners and social ads. Video ads, for all who see them, have an impact that is greater than any banner ever could have; and certainly more than a thumbnail image and some text. If you don’t have the means in place to measure the impact of an impression on your business goals, then how can you possibly justify buying any media on a cost-per-impression basis?

In the early ‘90s, banners and clicks were an interim solution for measuring a new media type that did not have the capability of soliciting an emotional response from a consumer when it was created (no video). We’re way past that now. The ability for digital to deliver so much more than a direct response is finally mature, and the smartest marketers are jumping in, knowing full well they aren’t as targeted as they could be with banners or social ads. But the choice to have some amount of waste in order to ensure your ads are noticed is an easy one to make. What will you choose?

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1 comment about "Targeting Is Not A KPI".
  1. Ari Rosenberg from Performance Pricing, LLC , January 30, 2012 at 9:50 a.m.
    Dave, well said -- and with such clarity! Thanks for sharing such great insight. Ari