Addressable Display Advertising: The next revolution in multi-channel marketing?
Paul Kennedy, Head of Consulting, Callcredit Marketing Solutions
The range of media by which consumers can be addressed directly has gradually evolved over recent years. The latest arrival - addressable display advertising - is possibly the most revolutionary of all.
Traditionally, display advertising could only be targeted using high level consumer segments. Whilst context and behavioural targeting techniques have a role to play (e.g. for retargeting unconverted site visitors), the emergence of real time bidding (RTB) and data management platforms (DMP) now offer marketers a chance to implement audience-based marketing programs i.e. to whom. Opaque and sluggish ad networks are being replaced with programmatic enabled media buying that includes transparent, real-time biddable media and precision audience targeting.
Most companies are attempting an integrated approach to marketing across owned websites, email, paid advertising, SEO and social, with email and web being the easiest and therefore most commonly integrated channels. The recent arrival of audience targeting technologies such as real time bidding platforms means that significant new opportunities are available for marketers to boost the performance of existing marketing campaigns by adding a new direct channel - display advertising.
These techniques are really catching on; according to Forrester, impressions, will shift toward programmatic exchange based trading at a rate of 43% annually between 2012 and 2017, comprising
30% of total display spending by 2017. Many attribute this to high conversation rates, competitive pricing and ease of incorporation into multi-channel campaigns. We're already seeing some surprising trends. Just look at what happened on the last Black Friday in the USA - spend on 'Real Time Bidding' advertising (ads bought and served on the fly) was driven not by online retailers but rather by brands looking to drive bricks and mortar awareness. Impressions were commanding four bids per ad compared to a comparable average of about half that.
Everyone wanted the right audience at that exact time to maximise the number transacting on the target day.
Whilst the opportunity to use data to drive better multi-channel marketing is clearly there, Callcredit's research has shown that only a minority of respondents describe their marketing as integrated across channels. Equally, Econsultancy research found that over two thirds of clients have only an 'okay' or 'poor' understanding about the potential of digital channels (email, search, social media, etc.) to help grow their business. To make matters worse, channel budgets are often held as separate entities, e.g. one person owning the display budget and another email.
Using targeting data in online marketing is nothing short of a game changer. The benefits of segmentation are well understood in the offline world but till now have not really touched digital advertising. The very rapid growth of real time bidding now offers interactive marketers a chance to implement audience based marketing: they can identify the audience they are about to serve an ad to before it is bought. Callcredit has recognised this and created a new service to deliver this for clients.
Addressable marketing identifies individuals and delivers messages to them based on their individual characteristics. For example, it would be inappropriate to display adverts for a credit based product to someone who is unlikely to be accepted for the product by the lender - our new generation of display advertising can address such issues. A contact strategy can be created to orchestrate customer engagements to enable brand experiences that are consistent yet customisable across channels.
So what can be done targeting wise? Well pretty much most things you would expect offline - and a bit more. Online data is only part of the jigsaw - the variables traditionally available to target display advertising are limited to context, some online behaviours or very limited attributes. What really makes data driven marketing interesting is the ability to combine offline data with other characteristics gathered online then generate the advertising with other direct marketing channels such as email, mobile or social. So now you can buy audiences wherever they pop up on the internet rather than buying particular 'slots' and hope the right people turn up. The use of third party data within this process allows brands to better reach target audiences who may be in play for particular products or services.
Whilst display advertising has relatively low click through rates, it allows us to quickly reach large audiences. Email and SMS has the advantage of higher open and click through rates (One source quotes SMS open rates as being more than 99%). Callcredit has access to over 24m marketable email addresses and 15m mobile numbers which can be used as part of an addressable display campaign. Even though the unit costs for email and display are low, they are not always the most effective choice in isolation.
Traditional channels such as mail and phone show the highest response rates, yet online channels attract a greater percentage of marketing pounds because they generate a far better return on investment. The answer to this lies in finding the right combination of techniques for each offering, customer type and brand and whether we're talking about acquisition or retention. This new multi-channel advertising ecosystem allows a sophisticated mix of cost effective messaging across digital channels designed to maximise conversions.
With so many direct channels now available and the process for creating a multi-channel campaign including addressable media not that dramatically different to that which might be used for digital or traditional campaigns in isolation, it is a no brainer for marketers to jump on the next revolution in multi-channel marketing.