Online advertising used to be so simple: build a media plan comprised of relevant sites and placements, track results, and optimize campaigns. But targeting changes everything. Instead of planning around just sites and placements, media planners must now digest a daunting menu of other variables: past user behavior, geographic location, connection speed, day of week, time of day, domain name, PRIZM cluster, gender, and scores of other variables.
Overwhelmed by this smorgasbord of targeting options, many online advertisers may simply decide to push back from the table. While variety may indeed be the spice of life - too much spicy food can lead to a bad stomachache.
Simple Recipes Can Be Delicious Instead of fasting, smart online advertisers should first sample simple targeting recipes. Even single variable schemes can generate outstanding results. A recent case study illustrates this point.
A variety of single variable targeting schemes were analyzed for an online specialty retailer. For each targeting methodology, campaign performance (measured by online sales) was indexed against untargeted media across the same sites and placements. In addition, each segment's potential size was measured as a percentage of all available impressions. The exciting results are shown below:
Source: DRIVE Performance Media campaign data, January 2005.
Simple segmentation schemes were able to generate outstanding results relative to untargeted media, whilst still delivering significant volume in many instances. The best of the single variable schemes - a simple cookie-based re-messaging scheme aimed at past site visitors - generated nearly 3,000 percent better performance than untargeted media. While a multi-variable scheme was still able to generate the strongest overall performance, it reached only a fraction of the cookie-based scheme's audience.
The Final Course Is Served The implications for online advertisers hungry to improve their results are clear:
Even simple, single variable targeting schemes can generate transformational performance relative to untargeted media.
Cookie-based action schemes are seemingly more effective than many more generic variables. These targeting schemes are most easily powered by the advertiser data collected by third party ad-serving partners and are not offered by most purported targeting providers.
Multi-variable schemes will inevitably be most effective, but reach is a concern. However, for highly niche products and many B2B advertisers, this may be the only way to advertise online.
The buffet of online targeting options is stuffed with seemingly delectable entrees. But that doesn't mean online advertisers should gorge themselves. Take it easy at the buffet, for in online advertising, a sensible and moderate approach can generate healthy returns.