One In Ten Hit Rate Makes Wasting Just Half A Budget Enviable

Digital was always supposed to be highly targeted. People would leave a cookie trail, they'd be signed in to Google or Facebook -- possibly both -- making them visible to advertisers who want to reach people just like them. It might be middle-aged golfers, fitness-mad millennials or mums with newborns. It doesn't matter -- the data should lead the ad dollar to its intended target.

Only it doesn't quite work out like that, according to the latest figures from Nielsen. To start with, you'd imagine that just splitting the population in two and saying you'd like to reach women wouldn't be too hard, wouldn't you? Turns out, averaged out across all industries, advertisers only successfully reach women 50% of the time. Men fare a little bit better with a hit rate of 62%. Let's just recap, women are reached 50% of the time. That's no better than just a pure random shot in the dark, is it?

Throw in another filter, such as 18- to-34-year-old women and the success rate goes down to a mere 22%. Again, it's a little higher for men at 33%. Strangely, for 25- to-44-year-olds, the situation reverses and women are more accurately targeted than men, 37% versus 22%.

Interestingly, Nielsen breaks down how accurate each industry's targeting is over desktop and mobile with the latter, as you'd imagine for a personal device, usually faring better. Travel is out on top, with just over two in three of its desktop and just over three in four of its mobile ads reaching their intended target. Surprisingly, retail is the worst performer with just 42% of its desktop and 40% of mobile ads reaching their target. The FMCG sector barely did any better. 

Averaged out across all industries, the success rate of hitting the intended audience is only 54%. So we really do have a near 50:50 chance of an advertiser getting a message in front of an intended audience. Time to roll out the old axiom that the problem with advertising is to waste half your money -- the real problem is, you don't know which half?

Well -- actually, it's worse than that isn't it. Let's factor in viewability here. It recently made the headlines for just about tipping over 50%, but let's, for simplicity's sake, assume a viewability rate of 50%. That means we're talking about just one in four ads being viewable to the desired audience, on average.

It gets even worse if you filter down an audience. Take men just approaching middle age, factor in viewability, and you're only likely to reach your audience and be seen a little over once in every ten attempts. The same goes for millennial women.

Taking viewability out of the equation, there are surely several reasons behind poor targeting. The most obvious is computer sharing and can be proven by mobile targeting being better than desktop for all except two of the industries surveyed (entertainment and retail). But that only has to be half the story, doesn't it? If it were the sole reason, targeting rates would leap to near 100% on mobile, but they don't get above two in three or three in four.

Nielsen's researchers lay a lot of the blame for a near 50:50 performance on brands and their agencies not always using the latest tools to ensure they are reaching their desired audience. The analysts also mention that too many brands are relying on third-party data -- ie, a network -- rather than first-party data supplied the site publisher. 

Even so, the best performance they quote is travel hitting three in four of its desired audience on mobile. Again, throw in viewability and you're still barely scraping over reaching the people you want to be seen by a third of the time. It's not impressive stuff, is it?

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