Commentary

Exact Audience Targeting And Validation Are Keys To Digital Brand Advertising

According to a global Forbes Insights survey of executives world-wide, the technologies that enable brands to target exact audiences with the right messaging and to validate reach and effectiveness are relatively new. Brand marketers are seeing the value in audience targeting for their campaigns and recognizing the importance of reaching the right audience to add relevancy and truly make a difference. The study finds that these tools have clearly addressed a market demand and are providing marketing and advertising executives with much-needed insight.

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Key Findings Summary

Almost all companies surveyed consider display and digital video a key component of their marketing message or branding.

  • Companies value, and expect to increase investment in audience targeting. Currently, 90% of companies spend at least 25% of their digital advertising budgets on specific targets, and 43% of companies spend more than half of their budgets reaching specific targets. 84% of companies expect that investment to increase.   
  • The primary challenge for audience targeting is identifying the proper personas. 54% of North American companies and 76% of EMEA companies cite this as the biggest challenge.
  • Audience guarantees, inherited from television buying practices, do not yet have a strong hold. 53% of all companies report that 25% to 49% of their demographic targeted video spend includes an audience guarantee, and only 9% report that more than 75% of their targeted video spend includes audience guarantees.
  • The importance of validation is growing. Half the companies surveyed always validate that their display and digital video campaigns reach the right audience; 51% for display ad campaigns and 46% for digital video ad campaigns. 85% of all the companies surveyed expect the frequency with which they validate these campaigns to increase in the next three years.

In today’s increasingly online-focused world, says the report, brands value digital advertising and understand its importance. This survey of marketing and advertising executives confirms that this form of advertising has the expected strong hold on businesses of all sizes, in all regions. 85% of the executives surveyed consider digital display and digital video advertising a key component of their marketing message or branding.

Rex Conklin, co-chair of the Association of National Advertisers Media Leadership, says  “Smart marketers today understand that the world has changed in terms of media consumption…  (and) need… a strong digital presence… opportunities today are superior to most forms of traditional media in terms of targeting and measurability…”

The organizational structure of many companies reflects this focus on digital: half of the executives work in either digital or online advertising or marketing departments. 97% of all the companies surveyed report using digital advertising formats. The biggest brands (those with revenue greater than $10 billion) are budgeting and spending more in the digital space and using more of all types of advertising, including television, digital media overall and digital video specifically.

Digital video is the most popular digital advertising format with the executives surveyed by Forbes Insights, with 91% of all companies citing its use. 

Digital Advertising Formats By Company Revenue

Formats

All

$500M–$999 M

$1 B–$4.9B

Digital Video

91%

97%

92%

Banner ads

79%

85%

68%

Rich media (includes in-banner video )

76%

83%

74%

Mobile in-app ads

70%

79%

60%

Source: Forbes Insights, May 2015

94% of companies surveyed use display advertising to precisely direct brand messaging to reach one or more specific audience targets. Marketers and advertisers understand that the value of effective targeting lies in the ability to create more effective advertising campaigns.

66% of all companies, and 71% of companies with revenues greater than $10 billion, report the ability to more effectively reach the right audiences as the primary value of digital advertising campaigns. The remaining companies cite the ability to create more cost-effective campaigns as the primary value.

To reach the right audiences, companies are working closely with their publishers and ad networks to target relevant content and specific audience segments. Working with publishers is slightly more popular than working with ad networks, says the report. Companies work most frequently with their publishers to target relevant content (79%) and specific audience segments (73%). The numbers are a little lower for ad networks, at 68% for targeting relevant content and 64% for reaching specific audience segments.

Approximately half of the companies in the survey use programmatic to target specific audiences on ad exchanges, highlighting the growing acceptance of, and investment in, this leading edge technology. In the past couple of years programmatic has greatly improved viewability measurements and traffic quality scoring and is increasingly drawing in brand dollars. 54% of survey participants target content through ad exchanges and 45% target specific audience segments that way.

The targeting landscape for achieving both brand objectives and overall performance objectives is in a state of continuous transformation and expansion. According to eMarketer, says the report,overall programmatic ad spending is expected to skyrocket in 2015 and 2016. Forrester also expects an increase in exchange-based programmatic spending; by 2019, it predicts that nearly 40% of total ad spending on desktop display will go through exchanges, up from just 27% in 2014. These statistics suggest that audience targeting through programmatic ad exchanges will likely skyrocket as well, suggests the report.

Only one in 10 companies surveyed spends less than one-quarter of its budget on specific audience targets, indicating that executives realize the value in this practice. This valuation is borne out by the fact that companies anticipate increasing their budget for audience targeting in the next three years.

How Companies Reach Relevant Audiences For Digital Advertising

Methods To Reach

All

$500 M-$999 M

$1 B-$4.9 B

Work with publishers to target relevant content

79%

79%

71%

Work with publishers to target specific audience segments

73%

75%

73%

Work with ad networks to target relevant content

68%

78%

55%

Work with ad networks to target specific audience segments

64%

73%

56%

Target relevant content available via ad exchanges (programmatic)

54%

63%

47%

Target specific audience segments on ad exchanges (programmatic)

45%

51%

39%

Source: Forbes Insights, May 2015

The most important type of audience targeting for branding campaigns is psychographics, followed closely by demographics and purchase data. There are some notable regional differences in this area as well. Companies in the Asia

Pacific region identify a markedly higher reliance on psychographic (86%) and purchasing data (84%) for targeting than do companies in any other region. That region also reports the highest use of search and social data, although they are the two least important targeting methods in all regions, notes the report.

Types Of Audience Targeting Most Important To Branding Campaigns

Type Of Targeting

All

$500 M–$999 M

$1 B–$4.9B

Interests and lifestyle (psychographics)

75%

78%

77%

Demographics

71%

72%

63%

Purchase data

66%

75%

56%

Social data

55%

59%

46%

Search data

47%

55%

42%

Source: Forbes Insights, May 2015

82% of the companies surveyed validate their campaigns in some way more than half the time. The most popular measurement tools were customer surveys (73% digital display, 68% digital video) and sales (75% display, 73% video). Rounding out the top three was use of third-party validation services such as comScore or Nielsen Digital Ad Ratings. This fairly new technology had an impressively high rate of adoption (63% display, 61% digital video) among survey respondents.

Concluding, the report sums up findings in this fashion:

  • SAP’s Anderson says “Digital enables marketers to be very precise, to target effectively and to follow up effectively …  It’s about multiple touches along the customer journey… has to be consistent… from awareness… until the customer decision… ”
  • The marketers and advertisers who participated in this research make it clear that digital advertising and digital video focused on brand campaigns provide a relevant and measurable return on investment. The power of the medium comes from the ability to precisely target campaigns, and to create a useful return on investment for the brands.
  • Marketers see the value in technology that enables brands to validate that their campaigns are reaching the right audience even if they are not necessarily ready or able to embrace it.

 

To view the complete study in PDF format please access Forbes through this included form.

 

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