Hyper-relevant ads and marketing messages have become common in digital media, but research suggests the strategy may backfire for many brands.
By tailoring advertisements that serve up on Microsoft Bing or Google only to specific consumer needs, brands are making ads less useful and missing out on sales, according to research from Intent Labs.
The study — Overlooked Opportunity of Goal-Driven Consumers, published by Intent Labs, a research collaboration between Performics and Northwestern University Medill School of Journalism, Media, Integrated Marketing Communications, in partnership with Microsoft Advertising — analyzed responses from 2,391 U.S. consumers to examine whether relevance to specific consumer needs is too limiting.
Marketers strive for relevance, but the study looks at whether exact messaging is key or if marketers should provide context based on predictive needs.
The research examined the likelihood that consumers would select a search ad result based on their mindset -- goal-driven or item-driven -- and the type of ad experience, either limited or expanded.
The study found that in some categories, more than half of consumers are in a goal-driven mindset. The data showed that makeup-related goal-driven searches comprised 56%, versus item-driven searches at 44%. Fitness goal-driven searches came in at 63% versus item-driven searches at 37%.
For example, searches could be around an item such as protein powder, versus goal-driven -- for example, around building muscles. For those who are searching with the goal of building muscles, fitness classes, dumbbells, and fitness shakes may come to mind.
While repeat purchasers search with an item in mind -- for example, buying the same protein powder every month -- new consumers to a category or brand are more likely to be in a goal-driven mindset.
Brands have a 26.7% higher chance of finding a new customer when targeting the goal mindset versus targeting the item-driven mindset.
Among the three categories, travel was the only one in which searches were more item-driven, at 57% versus goal-driven at 43%.
Despite the mindset of the consumer, most brands serve up limited messaging that is too focused in ads and marketing material. Brands target the message to specific queries, so consumers continue to search because they don’t find what they need.
Consumers who are new to the category are particularly unsatisfied with the digital ads they see -- with 35% satisfaction for new customers versus 43% satisfaction for consumers with average familiarity and 53% for experts, the study found.
When presented with an expanded set of ad results that include products related to their goal in the ad mix, consumer perception of the usefulness of the ads rose by 10%.
New consumers are 1.9 times more likely to click on an ad for an associated product or service versus consumers who have an average familiarity with the category, and 3.8 times more likely to click than experts in the category.