Commentary

Have Advertisers Outsmarted Themselves?

One of the greatest gifts the Web has bestowed on content owners and the advertisers that support them is the mountain of data that is available at every turn. But this is also turning into a problem for advertisers and publishers alike. Are brands taking behavioral targeting too far?

It won't come as any surprise that the Web has transformed advertising, maybe more than any business in the world. Google, the poster child of the Web's dominance, has built an empire around an advertising model that not only didn't exist 15 years ago, but really wasn't even possible. Dynamically matching advertising to content, although now seemingly commonplace, is revolutionary in every sense of the word.

The first decade of this century has seen the rise of data-driven marketing. ROI is king, everything is measured, and that means everything is targeted. The age of "18-35 year old males" being a sufficiently specific demographic was dead before the ship even sank. Now, thanks to Facebook, Gmail, Del.ici.ous and a bevy of other social services, we have access to enough data to learn significantly more about people without any personal interaction. Furthermore, we can track those people across multiple properties and indefinitely improve our accuracy in targeting them with relevant, desirable content and advertisements.

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For advertisers, this mountain of data means they can refine their targeting orders of magnitude more than ever before. We've come a long way from the entire world being broken up into a dozen or so buckets. Entire marketing campaigns are being built around demographics so specific, you may have to test the limits of the six degrees of separation theory before finding a hit. It might take you years to find someone to fit the bill of "Asian females from the Southwestern United States age 22-27 who like skateboarding and have been to at least 2 professional sports games in the last year," but that might be a slam-dunk market for a major brand advertiser. This is, without doubt, the greatest gift to advertisers of the last half century.

Getting back to our original question though, have advertisers grown a little too smart for themselves? These micro-targeted groups benefit from brand advertising, but it's nigh on impossible to find enough people fitting the demographic to justify large scale brand recognition ad buys that programmers and publishers need in order to afford to make this type of hyper-targeting possible in the first place. On the mobile side, this audience just got the kick in the pants from the iPhone it needed to convert consumers to video on the phone -- Nielsen just announced that viewership is up 50% over last year -- but this audience is still in the early days and trying to impose these highly targeted, yet micro ad buys on what is essentially an early adopter audience isn't moving our industry in the right direction. One could argue that such micro-targeting could in fact become the mad-cow disease of our industry, killing off many viable businesses in the name of raising the engagement needle a few points.

Occam's Razor theory states that the simplest explanation is often the correct one. Perhaps in our quest for more detailed metrics in the hunt for greater ROI, we've actually moved further away from what we were originally seeking. I would suggest we stop holding online and mobile video advertising to a different standard or litmus test of value. These platforms (desktop & mobile), by their nature already offer tremendous insight into our respective user/viewer bases and if managed and mined correctly, give us sufficient data to derive a much more quantifiable ROI than television, in its one-size-fits-all, bulk format, could ever hope to offer.

So perhaps what we truly need is less focus on advanced mathematics and a more concrete focus on the basics of user engagement, personalization and seamless mobility of the user experience.

7 comments about "Have Advertisers Outsmarted Themselves?".
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  1. Alex Czajkowski from eGaming 2.0 Ltd, May 26, 2009 at 3:38 p.m.

    I THINK we're on the same side here. I distinctly recall the founder of Media 21 in the UK saying "how great would it be to find the banner that converts best and optimise on that.. the 'holy grail' of online advertising.." That whole "holy grail" thing is huge in the UK. And wrong.

    Segments have creative that appeal to them; there's no one banner that's going to smoke for your audience, unless your audience is as narrow as say the BNP. While smart brands operate 1:1 with customers, marketing is still a 1:? equation with prospects, giving you reach into new markets.

    So yeah we agree. For once, Your last sentence says it all. to hell with the math--let's make it interesting.

  2. The digital Hobo from TheDigitalHobo.com, May 26, 2009 at 5:04 p.m.

    I believe its safe to say that advertisers have not outsmarted themselves. In fact, I'd say they've gotten dumber, drowning in a sea of unactionable data.

    What does this have to do with video anyway? Might have been more relevant for Behavioral Insider.

  3. Jason Krebs from Tenor/Google, May 26, 2009 at 5:31 p.m.

    The most important point here is that quality, professional media that is creative and engaging will be unable to survive in this hyper-targeted world.

    Companies that spend 20x their marketing budget on R&D annually to develop new products, suddenly want 100% perfection with their advertising. It's a fantasy.

  4. Jaffer Ali from PulseTV, May 27, 2009 at 7:04 a.m.

    Anthony:

    Welcome to the growing critique of algorithmic reduction. The same pointy-headed folks who screwed up display advertising our desperately trying to screw up video as well.

    Jaffer Ali, CEO
    www.Vidsense.com

  5. Martin Russ from Freelance Technical Author, May 27, 2009 at 9:02 a.m.

    Applying Occam's Razor to the title of this article, the simplest solution then is to go back to basics. Consider what a salesperson does when they meet a potential customer - they assess them, engage them in an interactive conversation, listen to the responses (verbal, body language, blinks, facial expression, etc.), analyse what they now know about them, and then make a pitch based on all of this information. Engagement, personal and seamless: it is a tried and tested technique that works.

    Moving this to today's advertising world, the same techniques can now be applied to online video ads to make them personalized: assess the viewer's profile, engage them in an interactive conversation, note their responses, analyse what you now know about them, and then put together an engaging, seamless, personalized video based on all of this information. Our experience is that this approach works. We would say that “doing what people do naturally” is a smart idea - and some very smart companies who we've worked with would agree.

    http://blog.realtimecontent.com

  6. Peter Contardo from Endavo Media, May 27, 2009 at 5:53 p.m.

    Anthony, I agree. Sophisticated metrics can't hide poorly planned and executed advertising campaigns. Going after a focused target audience in the first place is a major step toward significantly increasing ad effectiveness. To find that audience, advertisers need to align with publishers who are building passionate audiences around quality content.

    http://endavomediablog.typepad.com

  7. Kevin Lenard from Business Development Specialist, May 28, 2009 at 11:04 a.m.

    There's something the bulk of the marketing industry is totally missing -- strangely including the author here (strangely because his firm epitomizes the change, yet he's speaking in the language and business model of the dinosaurs).

    The fundamentals of advertising totally changed the day the internet gave voice/power to the masses. The vast majority of the media planning/buying business has yet to wrap their heads around this. 1Cast DOES get it. Look at their content: totally fresh, up to the second, never repeating the same thing to each of their individual viewers.

    NEVER REPEATING any given news article... A reach of millions, a frequency of one. No more repetition. THAT's at the core of the new metrics: identifying what ads each narrow target has seen and ensuring they're seeing a consistent brand message, but that each new impression is a different version of the ads.

    That's the Occam's Razor theory point here -- the simplest answer is that no one ever wanted to see your clever ad more than once (OK, MAYBE twice...), as much as they might love your brand, so we need ever more sophisticated metrics to improve our ability to enable us to serve up unique ad versions MUCH less frequently than we used to. This simple point is a game-changer. Only Apple (actually Lee Clow) is really getting it at the moment.

    http://advertisingbusinessmodelredefined.blogspot.com
    http://twitter.com/kevinlenard

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