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.
