• by Oren Harnevo , December 23, 2013

Data has emerged as the enabler of innovation everywhere. Big Data was arguably the biggest buzzword of 2013. And when it comes to digital advertising, data has historically helped marketers create better customer experiences through enhanced targeting capabilities, typically from either demographic or behavioral information.

Until recently, with digital advertising predominantly consisting of display and search ads, data has helped agencies drive more strategic media-buying decisions. But now, as video moves beyond TV and has become an essential tool in the digital world, brands can connect with their customers and use data to make storytelling more personal and impactful. They can use data to create engaging narrative, dynamic sound and interactive graphics to convey a brand message. This is great progress, but digital video ads have only scratched the surface of their potential. The big opportunity lies in the ability to use data to tell a different and more relevant story for each individual consumer.

The challenge today is that the vast majority of all video ads (close to 95 percent, according to our internal research) result from simply taking a TV ad spot and repurposing it for the online world. The question remains: Why is this the case?

There are several reasons why the industry is not moving faster into this new way of thinking. First, for about a century, marketers have been used to TV ads as a “one to mass audience” messaging approach. This is because TV technology never allowed smarter targeting. In order to shift to a “relevant message for each consumer” mentality, brand managers need to change their state of mind. Changing people's mindset can take years and is harder than it seems. This calls for innovative marketers that like new technologies. Not all CMOs think this way.

Second, the idea of creating numerous versions of a digital ad sounds very complicated to vendors, and the technology required to make data-driven video creative is extremely complex and difficult to understand. Last, the broadcast industry works with the gross rating points (GRP) model when it comes to measurement. And although data-driven creative can return performance metrics that are more effective, it doesn't affect the standard GRP.

How can data-driven ad creative work?

How can creative agencies experiment with using data to create different versions of video ad creative? First, they need to think about the customers of the brand and the messaging that will be communicated in the campaign. Who are the users? What is their typical journey before, during and after the transaction? What is their demographic and location? What data can I use?

A good example would be to look at how an automotive ad might target two different customer personas across the desktop and mobile channels. The first message each receives would be a general brand awareness ad, usually after browsing for cars from their desktop at home. Subsequent ads could be delivered via mobile when the buyer is on the go and traveling in close proximity to the dealership. Based on this data, the ads could deliver customized messaging with discounts or offers on specific car models, along with a local map and a voiceover that conveys distance and direction to the local dealer.

For each customer persona, the creative will change based on their demographics and past browsing behavior. A new mother will get a broadcast-quality ad with video content of the interior of the vehicle showing off safety features, while a male sports car enthusiast will see an ad that highlights the power of the engine, the speed or the sleek exterior of the car.

This data-driven approach can also be easily applied to the retail industry, where brands can tailor video ad creative for product offers based on changing weather patterns or seasonal events like the holiday season, depending on a consumer's location or browsing behavior.

Data can increase performance across the board. Data-driven media buying is already a mainstay, and data-driven creative is just beginning to take shape. While it has already proven to generate more effective brand performance metrics compared to standard video ads (according to internal research), it will take time to gain adoption in the market.

The digital video industry has come a long way. Companies like Adap.tv, BrightRoll, TubeMogul and Videology have paved the way with a foundation of strong digital video infrastructure and recent acquisitions by larger media companies have legitimized the future of the digital video industry.

But if digital video advertising is going to continue to grow and take any serious market share away from the TV ad spend, the use of data will need to evolve from just better targeting to more relevant creative.