Targeting real people is the holy grail of retail marketers because individual targeting and attribution methods deliver better value to the end consumer by producing more relevant messaging and
calls to action.
This, in turn, is good for retailers. It’s why so many of them do business with Facebook.
Why is it, when individual targeting is the goal, ad exchanges,
DSPs and other advertising techs all seem to focus on audiences instead of people?
The short answer is that retailers and ad tech providers are misaligned. Ad techs gear their products toward
partners that can spend at scale, because it’s self-serving, not because it’s more efficient and smarter for retailers or consumer other brands.
For their part, retailers often
don’t have the in-house tech solutions or people power to target at an individual level, though they sit on a mountain of data. They also struggle with how to integrate and extract meaning from
omnichannel consumer data and apply that 1-1.
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As a result, retailers end up going with the same old third-party tech providers.
But as retailers become more savvy about the
opportunities of owning and controlling fresh first-person data, some forgo outsourced solutions providers and develop the skills in-house to master individual targeting, with a number of implications
for both retailers and ad techs.
Retailers: Own the data, master the tools
The key to changing the vendor-reliant paradigm for retailers is sorting out a way to target
individuals at scale. Do it by creating products that mirror what publishers with identity data have to offer, then leveraging tools and methods that are repeatable, easy to implement, track and
measure.
Retailers are ideally suited as early adopters.
They just need a path to taking controls in-house, getting their people trained and establishing new criteria for individual
targeting and attribution. Some retailers may go the route of taking control of their entire martech/ad tech stack. (The option is to leave management of the tools to agencies, which are woefully
behind in applying modern ad and marketing tools.)
As retailers evolve to embrace individual targeting strategies, it is the current ad tech community that stands to suffer the most. All the
demand side players (DSP's, exchanges, agencies) will see their already highly commoditized business squeezed and will struggle to stay relevant.
Why? Because their trade and bidding practice
is built on audience. As brands’ perceptions of individual targeting change, and they begin rethinking how to reach consumers, it will be a wake-up call to the current ad ecosystem.
Will any ad tech players listen (and respond to) to retailer’s evolving demands?
Ad techs: Evolve or die
For those on the demand side that want to survive, identifying
the best technologies for retailers to reach their own consumers is a start. But it is also imperative to identify and focus on developing use cases and metrics for retailers that want to validate the
individual targeting approach and show enough wins to justify taking control in-house.
This will require the ability to highlight traditional KPIs around insights, lift, performance and
reporting, for starters. Some of the key to-do’s for ad techs to evolve with individual targeting and deliver solutions of value to retailers include:
- Ensuring clarity - Now that retailers have access to individual targeting tools, what will they do with them? What is the business value?
- Establishing metrics - What insights and reporting can be garnered to validate data and measure performance of individual targeting? Aligning KPIs to what
retailers already understand is valuable.
- Education - Introducing new tech to a market means there will be a learning curve and retailers
will want help to accelerate their knowledge base. Relevance, efficiency and quality must be the pillars of conversations. Summits, thought leadership and case studies will help.
- Leverage partnership networks - the MMA, IAB, Moat, eMarketer and others have an important role to play
Conclusion
A focus on
first-person data and individual targeting will empower retailers to have more control and yield net-new business intelligence, including a treasure trove of metrics around what works.
By
reconstructing how they approach consumers, retailers will reach across the digital divide, connect online and offline data sets and bridge the gap between engagement and activation in both the
digital and experiential realms.
As retailers become more self-sufficient, ad techs and agencies that have long benefited from their lack of control over first-person data will see their
audience-based models abandoned in favor of individual targeting models that give brand retailers more control.