The Tenets of Online Advertising

The Tenets of Online Advertising

Are online's "new" targeting options better than traditional media's?

Digital marketing has some very passionate advocates. For some people this zealotry can approach religious levels. If there are three tenet's of belief for these people about online advertising they seem to be:

  • Digital advertising has better targeting than all other forms of advertising
  • Digital advertising is more measurable than all other forms of advertising
  • Digital advertising is faster to activate than all other forms of advertising

I believe this blog to be a place where different views can be presented and so I'd like to stake a claim as sceptic in relation to these claims. I would suggest that not all of these claims are true and not all of them are actually benefits either. In the interest of word-count it's the first of these I wanted to examine in detail today.

Does digital advertising really have better targeting than all other forms of advertising?

I hear a lot about the targeting that digital advertising options and I wanted to use a few common themes to challenge our industry to deliver the best media targeting to advertisers:

  • Hyper-targeting
  • Behavioural targeting
  • Household make up

Hyper-targeting

Doesn't hyper-targeting sound exciting? The ability to exactly reach a group of people based on their interests, hobbies or desire who wouldn't be interested?

Nielsen's Top Advertisers report shows that the top 10 Australian advertisers all come from the Retail, Automotive, FMCG, Communications and Government categories. Now, none of these advertisers can build a business on a hyper-targeted audience of 1,000 people. They need to influence millions of people's grocery shopping, car-buying and their choice of mobile phone, broadband provider and mobile network.

Hyper-targeting means small and small audiences cannot support our top advertisers.

Behavioural Targeting

Behavioural targeting has always been an interesting area for me. How could targeting advertising based on someone's actual behaviour not be a better option? I'll break this down into three areas:

  • Missing behaviours
  • Valuable behaviours
  • Verified behaviours

The first point is that we are not talking about someone's actual behaviour, we're talking about what they do in a digital environment – the websites they've visited and the keywords they've searched against. The 3 hours Australians spend online each day is a massive amount of time but, if they're lucky enough to get 8 hours sleep, we're missing over 80% of their behaviour in the real world to use to influence our targeting. Is online behavioural targeting for auto-intenders any better targeting than OOH physically positioned along the Parramatta road next to car dealerships?

Not all online behaviours are equally valuable. You can infer a lot from people based on the articles they read online but some signals of intent are much stronger than others. Someone's behaviour on a mainstream news site gives insight into their interests but their activity on an automotive or property classified site is really the key to matching the right ad with the right audience at the right time.

A word on verified behaviours. It can sometimes seem that if you know the right audience for your product or service is people who wear green hats that every supplier out their can help you reach green hat wearers through behavioural targeting. I would encourage anyone making an investment decision based on targeting to ask whether they will be able, through their own tracking or a 3rd party source, to verify that this targeting is justifying the premium you're probably paying through an increased business outcome.

Household make up

For so many advertisers in the categories above there is one condition that really drives spend on their products and services; the presence of children in the household. The packaged goods we buy, the car we drive and the shops we visit are heavily influence by whether our audience have kids.

Television has baked this audience into its targeting for years and has delivered consistent return to advertisers based on this.

What is the best that online can do? Facebook can deliver you an audience of 1.4million people they believe to be mum's but they would also say that this targeting doesn't reach all mums. To be sure of that you have to widen your targeting criteria to women between the age range you deem appropriate. And I'm not sure how we'd look to recreate TV's ability to choose to target households with kids 5-12 or kids 5-17.

None of this has made me question the value of digital advertising as I've spent 14 years working with clients and partners to deliver business outcomes using digital media. But it does encourage me to embrace empirical scepticism and to consistently challenge the assumptions that govern what we do.

As David Hume said "A wise man proportions his belief to the evidence." 

 

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Comments 1

Guest - Ben Barren on Thursday, 08 May 2014 11:05

great post. awesome simple segmentations, explanations and cautionary tales. would love to know how some of the new innovative local au targeting companies fit into this such as digivizer.com. great post!

great post. awesome simple segmentations, explanations and cautionary tales. would love to know how some of the new innovative local au targeting companies fit into this such as digivizer.com. great post!
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