For the Web-savvy, connected consumer, traditional approaches to personalized marketing and advertising campaigns just aren't cutting it anymore. In the not-so-distant past, getting an email from a retailer that addressed a potential customer by name was a unique occurrence that created the illusion of not only personalization, but also exclusivity. Today's consumers aren't so easily fooled.
A study conducted by The Economist Intelligence Unit and released by digital marketing solutions provider Lyris revealed that traditional personalization is becoming largely ineffective—70 percent of consumers call personalization "superficial," and 63 percent believe that personalization is now so common that they have grown numb to it. As the success rate of traditional personalization dwindles, there is an increased need for real-time marketing to improve customer experience. According to a recent survey conducted by Neolane and the Direct Marketing Association, 77 percent of marketers agree that real-time personalization is the future.
As marketers devote more time and energy to monitoring real-time conversations in social media and using analytics to put together real-time campaigns, a recent eMarketer report suggests that to be truly effective in real-time marketing, brands need to turn their attention to paid advertising with real-time, targeted personalization.
"Paid media plays a critical role in the success or failure of real-time marketing efforts. Just as a brand cannot post a video to YouTube and expect it to 'go viral' without marketing support, real-time marketing is less successful if marketers can't align their rapid-fire content-creation efforts with equally rapid-fire advertising," according to the report.
Bringing Personalization into Real Time
In the realm of digital ad personalization, one of the main emerging trends is real-time bidding (RTB). In the past, online advertisers took an approach similar to that of television advertisers and created a campaign that targeted a broad segment of viewers. "If advertisers wanted to target people in New York City who were fans of Animal Planet, [they] would purchase a banner ad on Animal Planet's Web site and show it only to the people in the New York City region. This is the old method: It has broad strokes and groups users together into very broad segments," Asher Delug, founder and CEO of mobile advertising company AirPush, says.
Real-time bidding, on the other hand, allows advertisers to display certain ads depending on weather, time of day, geographic location, and other factors. Based on the specificity and accuracy of user analytics, advertising companies are willing to pay high premiums to display an ad that can change dynamically based on the conditions during which these bids are happening.
"RTB involves personalizing each and every ad at the user level, rather than by segment of users. So, referring back to the Animal Planet example, those animal lovers might go on stock trading Web sites, or on YouTube much more often, so just targeting them on the Animal Planet Web site is not enough. You have to personalize the advertising approach to what this animal lover is doing online during any given moment, not just when [he or she is] on the Animal Planet Web site," Delug explains.
There are numerous other advantages to RTB as well. To ensure that ad campaigns can be personalized for different users, for instance, advertisers must create dynamic ads that can be easily customized. This, ultimately, is a major time saver for advertisers. "With more dynamic creative, the time that it takes to build the units shrinks. Before, if you wanted a personalized ad, you'd have to build thousands of versions of the creative and then traffic them out. But now, by using a dynamic creative technique, you're able to fill out the ad template once and then fill the content in those units basically in real time. So the production time is decreased pretty drastically," explains Ben Kartzman, CEO of advertising technology company Spongecell.
Real-time bidding is cost effective and beneficial for brands that need to advertise to different types of audiences that wouldn't benefit from a one-size-fits-all message. When Lufthansa, a Spongecell client, needed a dynamic ad solution that integrated into its work flow, the company pursued real-time advertising for its newest campaign. As an airline, Lufthansa needed to advertise accurate pricing, adhere to regulations, maintain a globally defined appearance, and be able to dynamically and flexibly target messaging for various audiences. As such, it needed an interactive advertising solution that was easy to use, easy to customize, and easy to scale.
According to Kartzman, Spongecell created a campaign that used dynamic creative technology to automatically serve consumers fare offers specific to their location. Lufthansa was able to use Spongecell's campaign management interface to control ad content for eight countries in the Americas. Spongecell's platform held the corporate master templates for banners, videos, and offers, but each campaign manager had the capability to update these ads with fares, messages, and offers related to a consumer's unique characteristics. Furthermore, the language of the ad was dynamically matched to the country in which it was being served.
The results, Kartzman says, were impressive. Ticket costs decreased by 17 percent; the click-through rate improved by 5 percent; and the reported engagement rate was a respectable 3.27 percent. "Our research shows that the more personalized the ads, the better the conversions and engagements are," Kartzman says.