Everyone thinks everyone else is doing it, so everyone claims they are doing it.
It can be hard – really hard – to separate fact from hype when it comes to one-to-one creative targeting, the Holy Grail. The simple fact is this: your high school friends weren’t having sex either, and now that you’ve grown up, your colleagues at other brands and agencies aren’t doing one-to-one creative targeting. Not by a long shot. But that’s not because it’s not possible.
So, what is happening out there that is passing for mass creative targeting? Let’s pull back the curtain created by innumerable overhyped case studies.
Limitations of Personalization through Media Targeting
Targeting advertising to audiences has been around since the days of Sterling Cooper, way before digital advertising. Regardless of the form of advertising, the common modus operandi has been that ads are targeted through media buys. When an agency or brand suggests a particular persona for a campaign, someone has to buy that persona by finding the media they consume.
Creative targeting by buying audiences through media buys continued into the days of digital advertising, and is the heart of the reason why creative personalization at scale has yet to become a reality.
Publisher IS NOT A Proxy for Audience
Throughout the history of digital advertising, agencies have treated publishers as proxies for audience. Agency media planners would get visitor profiles from publisher ad salespersons or purchase ComScore panel-based visitor profiles by publisher and add publishers to the media plan based on the audiences targeted by a brand.
The obvious issue with treating publisher as a proxy for audience is that it is an imprecise, coarse-grained creative target. Is this really the fulfillment of the promise of one-to-one personalize digital advertising?
3rd Party Cookie POOLS are incentivized to be Diluted
With the rise of RTB, agencies were able to supposedly get even more precise, by purchasing third party cookie pools from DMPs or DSPs as creative targets. However, these targets proved to be little better than treating publisher as a proxy for audience, as each cookie pool is based on a broad set of actions taken on the sites of a small handful of publishers. And many question the incentives this gives to DMPs and DSPs to expand the definition of each audience in order to extend the reach of each cookie pool and, by extension, their arbitrage opportunity.
The problem with both of these media buy approaches to creative targeting is that media targets are coarse-grained, imprecise audiences, which reduces their value. In addition, you have to pay a premium for these media targets, increasing their cost. In the case of third party cookies, you pay a premium to the DMP/DSP as well as a premium in the underlying CPM which is always higher on cookie-rich devices. Media buying is ultimately driven by cost and value (CPA) so creative targeting via media targets that increases cost and has questionable value has not been the success that it’s advocates claimed it would be.
DCO Perpetuates CREATIVE TARGETING THROUGH MEDiA
The response to the failure of coarse-grained media buy targets as creative targets has been to go the other extreme, dynamic creative templates that vary by fine-grained data feed - generally product, location or weather. While the creative variety can be impressive (“8000 combinations!”) the lift is limited to contextualizing a single message, which is why DCO is usually limited to a single campaign on a single line item.
The result is a dichotomy between approaches to creative personalization – either media buy-based targets that are too coarse-grained or data feeds to the ad server that are so fine-grained that they simply contextualize a single creative message.
So, no, your peers at other agencies and advertisers haven’t figured out how to do one-to-one digital creative personalization. But they could and so can you. It requires one thing: decoupling creative targets from media targets.
Creative Personalization Must Be Decoupled from Media
Buying media and decisioning creative are separate activities, each with their own criteria that, until now, have largely been collapsed at the expense of good creative decisioning. In reality, good media targets and good creative targets are orthogonal to each other, or should be.
Targets that are valuable for media buying are those with a favorable CPA, which means those with a low cost and/or high value (measured via their conversion or click rates). This is highly dynamic, as valuable inventory comes and goes with user browsing patterns and publishers shifting inventory to different exchanges and partners.
Targets that are valuable for creative decisioning, on the other hand, reflect audiences that respond to tailored messaging, and are more stable over time. So, good media and good creative targets are orthogonal to each other, one identified through media buys, the other through creative decision trees on the ad server.
Two of the largest ad servers on the market are provided by media companies, which may help explain why the ad server market has been commodified into little more than file servers.
Targeting creatives by trafficking them to targeted media buys has the additional downside of missing individuals in the targeted audience who hit your ad server from other media partners and line items.
It’s important for agencies and brands to be savvy about the incentives that drive the set of adtech options presented to them by the industry. Media targets drive revenue for intermediaries in a way that creative targets identified on the ad server do not. Furthermore, two of the largest ad servers on the market are provided by media companies, which may help explain why the ad server market has been commodified into little more than file servers.
ASK MORE FROM YOUR AD SERVER
As digital media has become addressable, there’s no reason that ad servers cannot decision creative off of thousands of segments – demographic, interest-based, daypart-based, location, industry-based, first-party data-based, and so on.
Furthermore, the rise of ad blocking makes it inevitable that media targets based on user tracking will become a thing of the past, and that users will ultimately take control of their personal information – personal data which is far more valuable than aggregate browsing patterns. Brands that are executing creative decision trees on their ad servers will be positioned to leverage the extremely valuable user data coming in the future ME2B adtech ecosystem in a way that others will not.
So, what does it look like when brands decouple their media and creative targets? It’s a 3-step process:
(1) Identify audience segments to target with tailored creative on the ad server.
Where do these segments come from? Most brand marketers have educated hypotheses about segments that would likely respond to tailored creative. For ideas, they can consult their company’s database marketers, a largely untapped resource by most digital advertisers. Once these segments are selected on the ad server, you have the beginning of a decision tree, and can generate a single ad tag for that tree to all media partners.
(2) Dynamically serve tailored creative variations to each segment with a decision tree.
To validate whether a tailored message generates higher response from its intended target, split test it against a non-tailored message and other possible tailored messages. If a tailored message drives a statistically significant lift, then you have identified a valuable market segment for your brand. If not, come up with another possible segment that may respond to tailored creative.
(3) Optimize for each segment through A/B testing and performance reporting by sub-audiences.
Once a high level message has been found to connect with a particular audience, follow up with A/B tests to discover taglines, images, animation and styling that drive lift by communicating that message. Look at performance by audiences within the target audience to refine your definition of the target audience.
This iterative process based on performance feedback is really the application of proven database marketing processes to digital advertising. This has only become a possibility now that digital media is as addressable as are the targets of traditional direct marketing like direct mail, call center and email.
Are you ready to break away from the pack and execute creative decision trees that fulfill the promise of one-to-one digital personalization?
Adacus is the only platform that makes executing an audience-optimized creative strategy simple and affordable, with free creative targets.