90% of the world’s data to date has been created in the last two years. As online content expands exponentially, vendors and advertisers are trying to determine what the most effective space is for advertising. Options range from traditional Google-type display ads on targeted, vertical sites to more integrated sponsored ads across social media sites like Facebook and Twitter.
But in my experience working in the advertising world, there are three key factors that make content effective to advertise against:
Consumers—whether they are in the market for low-, medium- or high-priced ticket items—are increasingly turning online to do product and service research, compare options, read reviews and make purchases.
A study by Cone Communications last year found that 89% of U.S. consumers go online to research highly considered items like cars, tech gadgets and home electronics. This space is so lucrative for advertisers because each conversion can be worth thousands. It is important because consumers are only in the market for this type of inventory once in a lifetime or at best, once every few years.
The study also found that about 90% of American consumers were more likely to look to online reviews and recommendations for validation before making high-cost purchases—an increase of about 25% between 2010 and 2011.
Moderate and low-cost purchases, on the other hand, did not experience the same percentage growth.
Even traditional consumers, who prefer purchasing highly considered products and services at brick-and-mortar stores, are increasingly turning online to research products and services and read reviews. New companies are emerging, like Datalogix, that can track the effect of online advertising through to an in-store purchase.
But for advertisers, having access to highly considered purchase data is only one piece of the puzzle. Such data is much more effective if it’s also coupled with purchase-intent data. We realized the importance of purchase-intent data at DoubleClick back in the 1990s.
It was the single type of data we couldn’t get enough of: The consumer was essentially telling us that they were in the market to buy and exactly what they were in the market for.
At various companies, such as FindTheBest—the data-driven comparison engine I founded to help consumers compare options on hundreds of highly considered products and services, we are able to capture this purchase-intent data. Then, retarget relevant ads at a rate of about 50 times a month per consumer across third-party sites.
This type of data is key for advertisers.
Advertisers with access to both highly considered purchase and high-intent to purchase data, have two of the three core pieces of effective advertising inventory. The final piece is knowing at what time during the purchase funnel to advertise.
When you think about the purchase funnel, consumers go through four stages—awareness, opinion, consideration and preference—before making a purchase.
When a consumer is at the awareness or opinion stage, they are still far from making a purchase decision. Ad dollars spent here are spread far and wide to introduce consumers to a product or service, but advertising in that space isn’t likely to generate an immediate conversion.
Conversely, when a consumer is at the purchase level, advertising is no longer as effective, as the consumer has already likely made their decision. It’s at the consideration and preference levels, where consumers are actively researching and comparing options to inform themselves before purchase that is the most effective time for advertisers.
Each of these three pieces—highly considered purchase inventory and purchase-intent data at a time when consumers are comparing options to make a decision—is necessary for effective advertising.