Commentary

Is 1-To-1 Marketing Worth The Investment? (Hint: Trick Question)

by Cory Treffiletti , Featured Contributor, September 21, 2016

Audience targeting and data-driven marketing have been taking some hits in the editorial columns the last few weeks. This is primarily due to some talking heads wanting to provide the media with “controversial” statements and get their names in lights. The fact is, targeting works extremely well — but I think people need to align their thinking when it comes to the entire category.

For many years the industry has talked about one-to-one marketing. I’ve said for year’s that’s an unrealistic expectation. To target on a one-to-one basis requires customized messaging based on a multitude of inputs that are changing rapidly. The development of a true one-to-one effort would require a massive investment in technology and an unwavering trust in that technology. While I do trust the technology and while I do think an investment is warranted, I would argue that investment should be made against “group-based” segment targeting rather than one-to-one, with a mind toward the maximum ROI for that investment.

There are significant commonalities to be made between groups of people, and those commonalities are able to provide you with the required insight necessary to personalize messages and see an appreciable ROI. Segment targeting rather than one-to-one is entirely achievable and scalable — and it works.

The problem is, some marketers profess to want to go too far and get too segmented, inevitably aiming for an audience that is too granular and requires too much investment to achieve results. There is a point of diminishing returns at which the investment is no longer warranted and the expectations are simply too high.

On the flip side, not shooting for some level of targeting is marketing malfeasance.
With the sheer volume of media barraging consumers on a daily basis, to opt out of targeting in some way is like throwing your cash into a burning fire. Clutter has desensitized the audience and general, untargeted, impersonal messaging gets lost. No amount of reach and frequency can work in the sea of messaging we currently operate within.

Your individual strategy requires you to determine the economic investment you should be making. The best criteria to use would be the size of the audience universe you’re speaking to, in combination with the budget you have to work with, crossed by the type of media you’re looking to use, and the competitive clutter in that media format.

For example, you might have to make a larger investment in a mobile effort than for a desktop or a TV campaign, because the mobile environment might be rather cluttered and the format is smaller, with more difficulty in garnering the attention of the audience. The investment might require more if you’re doing a short burst vs. a slow-burn, long-term campaign where frequency against a targeted audience might be very effective.

Targeting may be a buzzword, but strategy is the driver of whether the buzz is warranted. Take the time to determine the investment you require to be successful. Don’t just read an article and let someone else be your judge of strategy — even if that person is me.

ad targeting, audience targeting

2 comments about "Is 1-To-1 Marketing Worth The Investment? (Hint: Trick Question)".

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Kresten Bergsøe from Talefod, September 22, 2016 at 8:48 a.m.
Hi Cory,
Hard to argue against putting strategy in the driverseat when allocating investment in marketing. However concluding that one-to-one is not realistic is simply not my experience working with this stuff for almost two decades. On the contrary, segmentation is simply not sustainable you have to work with lower double digit number of segments.
One-to-one marketing is not a distant abstraction - it's about personalization and personalization is a simple creative technique. Real personalized content is build from the ground up around what subjects do you want to convey and what profile information is available about the reader.
You structure your content in a number of building blocks that each focus on one or more of the subjects you want to address. For each subject you create variations of the message that match a piece of profile information you have about the reader. Example:
5 profile fields = 1.280 variations
You may angle the subject depending on gender (sex, 2), if it is the first time the reader visit your site (new/previous, 2), if the visitor has purchased before in your webshop (yes/no, 2), what kind of product category the visitor site behavior demonstrate most interest in (category, 10). You may even have different call to action (CTA, 4) based on what seems to be the visitors readiness to convert (Readiness, 4).
In this simple example you have written 2+2+2+10+4+4 = 24 blocks of content. But when those pieces are combined with visitor profiles it becomes 2*2*2*10*4*4 = 1.280 potential variations of a single piece of content!
The point is that you only used the following 5 information about your reader:
Gender
First time visitor
Prior purchase
Most interesting product category
Readiness to convert
When variations runs into the thousands, tens of thousands or millions - people trained in segmentation gets nervous and tends to back peddle to more manageable numbers of variations. This is of course always done at the expense of the customer experience - content simply lose the most important characteristic of all: relevance. The more your content reflect known properties of the reader - the more likely it is the reader will find your message relevant.
Not rocket science, right?
Most fail when aspiring for one-to-one, they start out by segmenting in the hope that they can continually refine their segmentation to get close to one-to-one. They never succeed.
If you start out identifying the parameters where it make sense to treat different customers differently - I have learned, that you are on a productive path.
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James Smith from J. R. Smith Group, September 22, 2016 at 12:08 p.m.

Both Cory and Kresten make excellent points. There's a tipping point in carving your targets or segments too thin. Think back to statistics class and regression...most of the discriminating power is packed into just a few of the 30 variables you tested. If you added all the touchpoints to a targeting scheme, your mountain of options (not all good or effective) would grow exponentially. More (targets/segments) isn't always better. Far better to find the "right" variables. Admittedly, it makes sense for your CRM, CMP, and the like to serve the creative showing a pet, to pet owners...but carving it by breed? Oops, left out those owning reptiles.