Targeted Advertising Makes the Sale

Published by

Hit the Bullseye with this Marketing Tactic

Services like geo-fencing, internet ads, and cost-per-click incorporate targeted advertising to ensure your ad reaches the right people. Targeted advertising focuses on specific traits of the potential customer, such as sex, age, level of education and employment. While these demographics are pretty easy to target based on customer research (most of it done by Google if you’re using AdWords), psychographic targeting can be much more complex since it’s based on the consumer’s values, personality, attitudes, opinions, lifestyles and interests.

If you want to target behavioral variables like browser history and purchase history, you’re more likely to see your ROI increase. You know how Amazon will suggest other items you might be interested in based on your recent purchase history? And how your YouTube account gives you suggestions based on the videos you’ve already watched? This is targeted advertising. Amazon is hoping to get another purchase out of you, and YouTube has more ads they want to make money on! Some advertisers have even tried to be more up-front about their targeted advertising by giving users options. For example, you can click on the ad you would rather see during a Hulu commercial (detergent vs. car commercial) or opt for a one-time, 3-minute commercial over several shorter ads. By giving users a choice, you give them a sense of control that’s uncommon in traditional advertising.

Do Your Homework

Targeted advertising is the most cost efficient form of marketing, because it ensures you’re not wasting resources on a demographic that is very unlikely to buy your product (ie: high heels to men). The most important part of any targeted advertising campaign is RESEARCH. If you’re not researching the demographics of the customers you already have, how do you plan on getting more of them? Research can be done through retargeting tactics (going after the people who you can see have already taken an interest in your product through Google Analytics) or through good old-fashioned surveys. Programs like SurveyMonkey do a great job compiling data in an easily shareable format.  Creating personas can help you target your audience on a much deeper level, allowing you to put a name to the demographics and qualities you’re targeting.  Once you know the type of people you’re trying to reach, you can move on to the next step: ad targeting.

personas

How Does it Work?

Most agencies use second-order proxies to do all the targeting. These proxies track online/mobile web activity, associate historical webpage consumer demographics with new consumer webpage access, and use a search word as the basis for implied interest. This is known as contextual advertising. With this form of advertising, Google AdWords matches ads to relevant sites in the Display Network using your keywords or topics. It’s able to do this by analyzing the content of each webpage to figure out the central theme, then pairing it with the appropriate ad based on the topic selections and keywords selected for the ad. This pairing is also based on language, location targeting, and a visitor’s recent browsing history. Keep in mind that it’s to Google’s advantage to drive traffic to your website—their algorithm will ensure that your ad is seen by the right people.

Affecting Self-Perception

Targeted advertising is a proven method to drive sales. An article by the Harvard Business Review found that undergraduate students were more receptive to targeted ads based on specific websites they had visited during a previous task than ads based on demographics like age and gender (or no targeting at all). Behavioral targeting seemed to have a greater impact than group level attribute targeting. In fact, “participants saw the targeted ad as reflective of their own characteristics”. Not only do targeted ads land the sale, but they may even influence your target’s self-perception. Since this study relied on consumers being aware that the ads were or weren’t based on their past behavior, real-world results may be slightly different. Brands with strong personalities can especially benefit from behavioral targeting, since they can more clearly pinpoint their tribe. It’s important to include the AdChoices icon, so people can tailor the ads they see to products and services they’re actually interested in. When you identify your ad as behaviorally targeted, consumers have greater control over the use of their data. This aids with privacy concerns cited by the FTC about the use of consumer data in delivering online ads.

Demographics

Google AdWords goes into more detail about how demographics can be used in your targeted advertising. You can choose to narrow by age range, gender, parental status, or household income. Since some of the websites on the Display Network opt out of demographic targeting, you may need to leave the ‘unknown’ category selected to ensure you reach a wider audience. The system works by deriving a user’s information when they’re signed into their Google Account. Location signals and demographics taken from their settings are then used to determine which ads get shown to them. A Google user can edit their demographic information in their Ads Settings. Social networking sites can also give information on demographics for your targeted ads. If someone’s not signed into their Google Account, demographics can be inferred from their activity on Google properties or the Display Network. For mobile app demographics, an advertising identifier linked to a mobile device is used to remember which app the person has used. Besides targeting certain groups, you can also exclude demographic categories to make the most of your bids. You can even customize your bids by placing higher or lower bids for certain demographic groups.

Ethical Concerns

There’s been some debate as to whether targeted advertising violates a user’s privacy, and even more complex debate as to whether advertisers should be allowed to target children or those dealing with addictive substances. E-cigarette ads are especially relevant at the moment, since teen use has spiked dramatically in the past year.

According to a CDC report, “E-cigarette ads use many of the same themes — independence, rebellion, and sex — used to sell cigarettes and other conventional tobacco products”. Even though many believe e-cigarettes are less harmful than cigarettes, they deliver nicotine derived from tobacco the same as a cigarette. Nicotine is highly addictive and harms brain development. Much like the cartoon camel ads that many accused of targeting children, these vape ads are targeting the market that they know is growing fast. The question becomes how far companies should go in their targeted advertising. Should a business that sells whiskey target demographics most susceptible to alcoholism? Should a child’s watch history on YouTube be analyzed to produce the most relevant ads for them, adding fuel to the consumerism fire?

targeted advertising joe camel cartoon

In addition to feeding addictions, some argue that targeted advertising is an invasion of one’s privacy. One article suggests that people don’t want to trade privacy for targeted ads. While the surveyed participants were fine with surveillance at the workplace, digitalized health records at a doctor’s office, and loyalty card discounts from a grocery store that tracks your spending habits, a majority also believe that “marketers are misrepresenting a large majority of Americans by claiming that Americans give out information about themselves as a tradeoff for benefits they receive”. Even though marketers use the ‘data for discounts’ deal as justification for targeted ads, not everyone agrees that there should be a trade-off for their internet use.

Social Media Ad Targeting

Targeted ads are used for social media platforms as well. Snapchat filters allow you to target a specific region, and Facebook business lets you target audiences based on core audiences, custom audiences, and lookalike audiences. Tools like Audience Insights allow you to collect data attributes such as interests and behaviors.  You can collect data from people connected to your page, people in your custom audience, and people on Facebook. With the demographics overview, you can see age and gender breakdowns, education levels, job titles, relationship statuses and more. You can find out what people like through audience insights as well, since the system collects third-party information on products people may be interested in purchasing. You can even target your ads based on workplace and job titles. Say you’re trying to market a new app geared toward health care providers—you can target your ad to show on the feeds of people who work at hospitals or pharmacies. Location targeting can also be utilized to create a radius around a store (much like geo fencing). Instagram ads allow targeted advertising through location, demographics, interests, behaviors and custom audiences. Interests are determined through the apps that people use, ads they click on, and the accounts that they follow. Automated targeting works by creating an audience who might be interested in your businesses based on location, demographics and interested.

 

Contact Us

Our goal as a marketing agency is to ensure that your targeting efforts follow a code of ethics that you can stand behind. Since internet users are going to have to deal with ads no matter, you might as well show them stuff that they’re actually interested in. Contact us to get started on your targeted advertising strategy, or check out our targeted advertising page to learn more about our services.

 

Ready to Start Your Project?

info@ontargetinteractive.com816.529.9000
524 Walnut St. Suite 200, Kansas City, MO 64106