Brands' Offline Insights Drive Online Advertising's Future

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Large consumer brands have an incredible amount of real-world data about their customers, including their preferences, how they buy and what they respond to. A company’s CRM and direct marketing departments will put this information to work, but the online advertising team often lags behind employing these critical insights.

The online advertising industry tends to celebrate the new tools and technologies they have created to help them improve media buys, targeting, messaging and measurement. However, brand advertisers are now realizing they must learn from their CRM and direct marketing colleagues.

Online advertising teams can use that wealth of offline customer insights derived from real sales data to better target online audiences and produce more effective cross-platform media campaigns.

Guesswork Isn’t Good Enough

One reason online advertisers are warming up to offline data is the changing nature of both clicks and contextual targeting campaigns. Historically, brand marketers have used these as proxies for measuring results and making media purchase decisions. For example, they paid more attention to clicks than actual purchases.

Behavioral targeting relies on syndicated third-party offline data instead of using actual customer data to find the right customers. And we’ve gotten pretty comfortable with it.  

But the industry is changing. First, it’s clear that click-through rates and site visits can be red herrings for brands because they measure the wrong thing. The industry recognizes that clicks aren’t the right measure, but it’s actually worse than that—clicks can actually destroy value. “Clickers” are often not buyers, and many clicks are outright fraudulent.

Second, contextual and third party targeting don’t maximize the potential of new programmatic buying, audience targeting and real-time optimization tools because they provide little insight into the actual needs and purchase behaviors of targeted users.

Media buyers are accustomed to third-party online audience targeting, choosing “auto intenders” or “home owners” to target campaigns. But for sophisticated brands, these generic, big bucket audience targets are laughably simplistic.

There Is A Better Way

Using insights derived from offline customer data, brand marketers can now maximize the value of the latest online advertising tools to improve measurement, reach receptive prospects, and deliver highly customized messaging to audiences most likely to do business with their brand.

For instance, CRM systems track sales in incredible detail. Smart brand marketers use these systems to measure the performance of online ads against real, offline sales data. They see the value of going beyond click-through rates by assigning a lifetime value to each converted consumer and measuring how many new offline customers their campaigns drive into the CRM system. With the right procedures and safeguards, it can be done in a manner that respects consumer privacy.

As for audience targeting, why settle for generic third-party audiences when the direct marketing and CRM departments already have deep knowledge about the characteristics of their best customers? They have collectively invested decades and billions of dollars to turn customer analysis into a science. It’s now possible to deploy rich insights derived from offline customer data in the online display environment to reach and effectively communicate with the right consumers. I’m talking about data-driven models based on in-house customer knowledge.

Whether through customizable third-party audience data, consumer segmentation models, or direct customer audience targeting, vendors can employ a number of privacy-friendly approaches using customer data to pinpoint specific targets.

It’s Time To Collaborate

Online brand marketers don’t often work closely with their direct marketing and CRM colleagues, leaving them to generate campaign parameters based largely on guesswork about their audiences rather than real data insights. As a result, agencies often translate the marketer’s requirements into generic RFPs, and then ad traffickers translate these RFPs into off-the-shelf campaign parameters. 

While this compartmentalized approach may be easy, leading online brand marketers are learning they can generate exponentially higher ROI and quantifiable bottom-line results if they’re willing to collaborate with their offline marketing counterparts.

With real offline insights, online marketers can push agencies and ad vendors to apply their powerful new ad-tech tools to dramatically improve their online advertising programs’ overall value.

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1 comment on "Brands' Offline Insights Drive Online Advertising's Future".

1. Bill Guild from ChoiceStream
   

   commented on: October 12, 2012 at 11:46 a.m.
   Absolutely correct on two key points. 1) Having built a platform that can consume and analyze very big data from all kinds of sources, and having proven the lift generated by advertiser data, we are constantly surprised by lack of access to this data. Advertisers should be working across silos in their own organizations to realize the incremental revenues hidden in this data. 2) Offline insights can measurably improve online campaigns. The inverse is also true. Insights from online campaigns (if your vendor provides this transparency) will measurably improve offline campaigns.

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