As the world moves inexorably digital, Marketers increasingly want to understand how to improve the effectiveness of their digital ad spending.
Digital Metrics and Ad Effectiveness
In many ways, the digital revolution has been its own worst enemy — at least for brand advertisers. The focus on click-thru rates and other digital specific measures were supposed to be great advances beyond a TV centric ad world but in many cases have actually slowed the move of ad spending to the digital medium.
For example, it’s now been well documented that for CPG brands click thru rates do not correlate with off-line sales. So, why do so many marketers still talk about click-thru?
Digital Advertising Objectives — Building Brands and Increasing Sales
What do brand advertisers want? They want to build their brand and improve their sales and advertising ROI. How do they do this?
One new advance is the use of buyer behavior based targeting. New research shows that CPG advertisers can generate about a +20% improvement in average sales lift when their on-line advertising is delivered to consumers using purchase based information.
Now CPG brand marketers know two things with certainty:
- Brand focused on-line advertising drives off-line sales.
- Sales lifts are even stronger when purchaser based data is used in the media buy.
Purchaser Based Data — What Is It?
So, what is “purchaser based data”? Simply put, it’s using consumers past purchase behavior to identify consumer groups which are most responsive to your ads and then targeting future advertising against these kinds of consumers.
For example, the CMO of Brand X discovered that heavy category users who were light buyers of her brand were much more responsive to Brand X advertising: they accounted for only 20% of the impressions delivered, but 80% of the sales lift due to the advertising. Other buyer groups received 50% of the impressions but accounted for almost no sales lift — e.g., Brand X’s spending on ad impressions against this group was a complete waste.
Going forward, Brand X’s CMO worked with her agency to plan and buy against the heavy category/light brand buyer target — and generated a much higher sales lift by spending against those consumers who are most responsive to the advertising. Buyer behavior based targeting works just like that.
Additional Buyer Behavior Based Targeting Learnings
So, what else have we learned about buyer behavior based targeting in the on-line space?
- Sales lift differs by category – OTC and health and beauty categories are even more responsive to buyer behavior based targeting than other categories.
- New products get an even larger sales lift — new products averaged about +30% sales lift using buyer behavior based targeting vs. about + 20% for existing products.
- Both small and large brands benefit from buyer behavior based targeting — this is especially good news for small brands which often find TV unaffordable.
With $1 of every $10 ad dollars now being spent on-line and expectations of even more in the future, CMO’s can get a lot smarter about how they spend their on-line dollars by using buyer behavior based targeting.
So, if you’re a brand based advertiser, throw out the clicks and bring on the buyer behavior based model. After all, it’s only about 20% better.