Commentary

The New Naughty Or Nice List: How Smarter Ads Shape Intent This Holiday

The Halloween candy is now on clearance and the turkeys are on display. That means one thing: We’re at the cusp of holiday shopping season. As my job is to think about targeting messages to the right audiences at the right time, my sleeves are permanently rolled up during this specific period.

Recently we all learned from the IAB that digital ad revenue is way up over previous years, with a mind-blowing $20.1 billion spent in the first half of 2013 alone. Based on that momentum, retailers will certainly want to make sense of all their marketing options during this period, which, as we know, is so important to revenues and to the economy overall.

What’s New

So let’s review the context in which retailers are working this season and illustrate how they might take advantage of targeted marketing across channels.

Merchants and brands want consumers to visit their sites and complete transactions -- that’s not new. What is new is how brands interact with consumers when they come to their site(s) and how retailers continue to interact with them after they leave. 

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For example, Retail Company X sees that John clicked on and researched a light-weight laptop but didn’t purchase it. After John leaves the site, RCX shows John ads when he is on other sites as means to woo him back to make a purchase. This is called product retargeting and is fairly common place.

Similarly, when John buys the laptop, RCX sends ads promoting additional items (laptop bag, multi-purpose charger, extended warranty) after he leaves the site. This type of behavioral analysis informs a “cognitive re-marketing” strategy. It even works with email marketing.

Back to RCX and John : Let’s say John clicks on a Samsung smartphone in a promotional email but doesn’t buy it. RCX -- you guessed it -- can now send John a variety of smartphone ads wherever he goes on the Internet (using cookie technology to track his whereabouts without identifying John as a person).

Studies have shown that these techniques have a direct impact on revenue as they prequalify interested customers and increase the likelihood they will make transactions. Such practices also help to control advertising costs, maximize return on ad spend and build long-term brand awareness, engagement and dialog. 

The Retailer's Wish List: Sales, Sales, Sales

To make the coveted year-end revenues, what's first on retailers’ to-do lists? Companies like RCX need to invest in user data collection and develop an understanding of behaviors that take place before, while and after costumers are on their site, or as they are reading an email. What brought John, Steve and Stacy to their site in the first place? What kept them from buying the goods? What else did they look at? What device were they on?

At the same time, retailers need to work with a data company that is highly regarded and trustworthy. They need to safeguard consumer privacy for the good of the public and their own reputations. In today’s digital age, ensuring privacy is part of the social contract.

Retailers should also limit the number of ad networks and demand-side platforms (DSPs) they use to buy media and distribute their advertising. If they go with too many intermediaries, they risk barraging and irritating customers and cannibalizing their own advertising. Brand managers must have no more than two buying partners if they want to maintain control of advertising reach and frequency.

During the holiday season, consumers are primed to spend a lot of money online. For retailers, it’s a mad dash to be the chosen merchant. The more targeted and customized the message, the higher one’s chances of winning the consumer's attention. Larger retailers recognize the value of user data segments and targeted messaging, and we’ll see those strategies on display this season. And we’ll hear about the positive sales results, too. Less prepared retailers will miss out.

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