Is a dependency on segmented targeting inhibiting your campaigns true potential

The Prevalence of Targeting
All advertising should be considered as being ‘targeted’ to an audience, with a broad distinction being made between ‘Mass Targeting’ and ‘Segmented Targeting’.

Segmented Targeting has been the foundation of direct response campaigns for many decades, mostly as part of a controlled test between different segments and suppliers. Mass Targeting has a broader reach and has been the principal method applied to broadcast mediums, such as TV and Radio.

However, the digital age now offers up Segmented Targeting to broadcast mediums like never before – now accounting for more than 25% of all BVOD Impressions.

Instinctively it makes sense, if I target someone resembling my typical customer then I’ll drive a better result. This intuition has led to thousands of ‘personas’, many more acronyms, and more dollars spent per impression.

But do the results back this up?

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Standing on the Shoulders of Giants

There are 4 key learnings championed by Professor Byron Sharp and Andrew Ehrenberg (supported with research by Les Binet and Peter Field), that Brand’s should pay attention to when considering Targeting techniques:

  1. Customer retention is difficult to control. Therefore, brands should focus their efforts onacquiring new customers.
  2. 82% of growth comes from penetration amongst infrequent buyerswhile only 2% of growth comes from loyalty.
  3. Almost half a company’s sales come from light buyers who continuously change their minds about what they purchase.
  4. A brand’s heaviest buyers in one period are often found to be light buyers in another period, and vice versa. Consequently, advertising should be targeted to reach a broader segmentof buyers.

Segmented Targeting reaches the wrong audience
Adgile analysed their databank of over 100 BVOD campaigns and identified those employing both Mass Targeting and Segment Targeting, classifying data overlays based on the following principle:

When contrasting Brands with Segmented Targeting to those with Mass Targeting, we found that the Segmented Targeting group were 4.5 x more likely to have visited the Advertisers website before the exposure – i.e. they were much more likely to be existing customers.

Further, the Segmented Targeted viewers were much less responsive to advertising. Mass Targeted viewers were 20% more responsive to BVOD advertising than Segmented Targeted viewers.

When considering marketing science, Segmented Targeting appears to reach the wrong audience – either existing customers or heavy buyers loyal to other brands.

Mass Targeting appears to more effectively reach the right audience –lapsed customers and lighter category buyers.

Sophisticated targeting requires sophisticated measurement
Segmented Targeting on BVOD, like all forms of targeting, offers brands huge opportunities to refine and improve their advertising results. However, with greater opportunity comes greater risk. If advertisers reach the wrong audience, then results can go the wrong way.

If using highly targeted segments, it’s imperative that brands exclude existing customers, a feature which most broadcasters and programmatic specialists offer.

But fundamentally if brands are using targeting techniques borrowed from direct response campaigns, they also need to borrow the rigour of test, measure and refine intrinsic to DR.

When approaching your next BVOD campaign question the role of targeting, how you will measure performance, and consider its balance with broader targeting.

 

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