Last year will certainly go down in history as the Year of the Ad Network. Industry giants such as Google, Yahoo, Microsoft, AOL, and WPP doled out over $12 billion to snatch up players such as DoubleClick, aQuantive, Blue Lithium, 24/7, Right Media and Tacoda.
What was the buzz that drove this flurry of activity? The promise of market efficiencies through exchanges and greater performance through targeting.
Better targeting undoubtedly improves performance, whether executed by traditional means such as geographic or site targeting, or through more advanced techniques such as contextual or behavioral targeting. But before we all chug the Kool-Aid, there are two critical factors needed to bring advanced targeting into the mainstream.
First, you must find your target audiences in a timely manner and in large enough numbers to matter. Then — and even more importantly — you need an efficient and cost effective mechanism to actually change your marketing message to be relevant to the audiences you’ve identified.
Quickly adjusting your marketing message for specific audiences is no small feat, especially with display advertising. An ad campaign for a national car manufacturer can illustrate the challenges of creating relevant messaging based upon targeting parameters. It may want to use celebrity spokesperson Tony Romo in Dallas, but Tom Brady in Boston. It may feature trucks and sports cars to appeal to males, while featuring family models or fuel efficient “green” cars for women. In September it may have special “Back-to-School” pricing and messaging, whereas in October it will switch to “Get Ready for Winter” promotions.
Now imagine if an advertiser develops 20 different audience segments across 10 geographical regions with four unique marketing messages and five product offerings with three timely promotions. Multiply that by 16 standard IAB display ad sizes, that’s 192,000 executions. Even at modest rates, this is quite an investment in terms of both cost and time.
Many startups are emerging with the promise of enhanced targeting, but few are marrying targeting with dynamic ad creation capabilities. In order to fulfill the tremendous promise of advanced targeting techniques, marketers will need a platform that combines targeting with mechanisms to deliver the right message to the right customer at the right time.
