The idea of personalization has been around for a long time, since the introduction of hardware and software allowing individual printing. Before that, personalization looked more like ‘Cheers’ where everyone knows your name. Now, tools exist to bring greater personalization, more like ‘Cheers’ in the form of people-based marketing.
Why use people-based marketing?
Face it. The old model of display advertising in digital space is dead.
D. E. A. D.
Don’t believe me. Here are the cold, hard facts:
- Average CTR (clicks) on display advertising is .06% [Think With Google]
- Roughly 50% of ads are clicked by accident [Gold Spot Media]
- 33% of users find display ads intolerable [Adobe]
- 54% of users don’t click banner ads because they don’t trust them [BannerSnack]
- Ad blocking grew by 41% and will increase with the ad blocking feature on the new iPhone [Hubspot]
The alternative to the traditional digital advertising model is one based on data analysis to generate highly relevant, individual-focused advertising.
Here’s what Signal (in conjunction with eConsultancy) said in the report underpinning the infographic below:
The internet is supposed to be the platform of relevance, based on data about consumers’ interests and behaviors. Display advertising isn’t living up to this promise. The user experience on the ad-supported internet is unpleasant; there are too many ads and they aren’t meaningful. As we’ll see, the opportunity to improve it is there, by moving beyond “spray and pray” and using customer data to deliver ads with genuine benefit to the individual.
What is people-based marketing?
People-based marketing uses data about an individual to make recommendation or choose display advertising that are highly relevant to that individual, not to some group sharing the same demographics. That means, of course, you have to identify a particular individual, then share their personal information with publishers to ensure people are served relevant advertising and products.
Personally, that sounds a little creepy to me.
A good example, however, is Facebook advertising, which is why I recommend it to my clients. Facebook uses deep data about an individual in order to serve up sponsored posts and display advertising on their site. Not only can I use demographic data, but psychographics about the individual user. Done properly, you’re serving up highly relevant ads and getting very high CTR.
Google has this information about users — and more. Google is one of the most information rich companies out there. Yet, they really haven’t used that information to improve outcomes for folks using Google Adwords to buy display advertising outside their customer match algorithm. Instead, much of their advertising model is keyed to the original search query.
Amazon has mixed results with respect to people-based marketing. In an article earlier this week, I showed how their algorithm generates ads to users who already bought a particular product.
Problems with people-based marketing
In addition to the privacy concerns expressed earlier, people-based marketing is hard — requiring a significant investment in time and resources to generate audiences, then track the success of marketing efforts to these audiences.
Despite these problems, advertisers and media buyers identified in this infographic state they’ll increase expenditures in people-based advertising.
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Hausman and Associates, the publisher of MKT Maven, is a full service marketing agency operating at the intersection of marketing and digital media.