Opinion

What ad tech can learn from email marketing

Ad tech is more complex than ever, but despite the endless reams of consumer data available to brands, a blanket one-size-fits-all approach to creative is almost always the end result. Yahoo7's Ben Green explains how taking some cues from email marketing might be the way forward.

If you’re a media planner or media seller, you’ve probably written or received many a media brief with a well-researched target audience section, using panel data or segmentation providers like Nielsen, Experien or Roy Morgan.

Green: “In 2017, any campaign that fails to embrace the old-school direct marketing principles is money down the drain”

You’ve created a robust list of insight and data-driven primary and secondary audiences, only to receive a single set of banner ads a week out from the campaign that will be delivered to them all. I pose the question: What’s the bloody point?

Fourteen years ago I started a career in direct marketing, working with marketers on email database segmentation and personalised one-to-one email communications.

Display advertising was pretty nascent – behavioural target and programmatic non-existent. Email marketing was where it was at in terms of hot news in data and marketing technology.

I had the privilege of working with FMCG and entertainment brands who held some of the biggest consumer email databases in Australia. This is where I learned many of the basic principles of direct marketing, particularly principles around A/B testing, personalisation and optimisation.

No direct customer communications would be delivered without a rigorous process of audience segmentation and definitions, testing (then testing again, and again), executing personalised messaging; measure, optimise, repeat.

In my experience as an email marketing producer back in 2003, no two consumers would receive the same email marketing content. It might have only been small areas that were personalised – lifestyle images or hero product reflective of their demographic profile, their nearest retail location or even just their first name.

Fast forward 14  years to 2017, now working in the ad tech and performance media space, we took a look at the level of personalisation on a sample of 200 recent client campaigns we’ve run:

  • The average number of display ad variations provided per campaign was 1.1
  • The average number of video ad variations provided per campaign was 1.4

With the emergence of a plethora of ad technology, from demand-side platforms (DSPs), rich media and dynamic creative optimisation (DCO) providers and other three letter acronyms (TLAs) we must ask ourselves: Why are those basic direct marketing principles around testing, segmentation, personalisation and optimisation so rarely adopted?

The answer, in my opinion, is not apathy, nor necessarily the void between the creative people producing the ads and ad tech specialists implementing the campaigns (although, this probably has some impact). It’s the high cost and labour intensity of producing multiple variations of display and video advertising creative.

My pals in the creative agency space tell me a single variation of a core display concept can cost an incremental $3,000 and take an extra week to get produce, traffic and get live. That’s on top of the initial cost of creative concept to design to production.

Now imagine, for instance, you have four key audience segments you want to reach and within each, you want to personalise lifestyle images, hero products, offers, call to actions and location references.

Suddenly, as a marketer, you’re looking to foot the bill for 20+ different creative versions. Can you afford for creative budgets to eat that much out of the media budget and limit your campaign reach? Will the incremental uplift in response rates be greater than the incremental cost of production? How long will this delay the campaign? How will you feel about your production investment if 80% of the creative variations don’t work after some initial A/B testing?

From my perspective, the answer to this problem is native ad formats – in particular, native in-feed formats. These are native ad formats that take on the “form or look” and “function” of the non-sponsored content around them.

Why is this the solution we’ve been looking for? Well, in-feed ads share several key properties with good old-fashioned email marketing.

Creative

The composition of an in-feed ad is a headline (like a subject line), ad copy (like body copy), static images and a call-to-action.

First-party data

Many native ad platforms allow marketers to onboard their first party data; from website visitors, to app downloaders and even email lists.

Personalisation

Simplicity of creative assets (ad copy and static images) makes providing personalised messages for each audience segment and sub-segment quick and cost efficient. Native platforms powered by dependable audience data allow advertisers to align custom creative with custom audience segments.

Optimisation

Native platforms with performance-led ad technology allow campaigns to optimise towards audience, time, day, placement, behaviours, interests and actions like purchases, visits or enquiries.

In 2017, any campaign that fails to embrace the old-school direct marketing principles like A/B testing, creative personalisation and optimisation that today’s ad tech is built on is, quite frankly, money down the drain.

Embrace and take advantage of the emerging native ad formats and the simplicity of their personalisation to tailor the right message, to the right person (at the right time).

So marketers and agencies, the next time the great work you’ve done on audience segmentation, targeting plans and data management is met with blanket catch all creative, I urge you to ask them: “What’s the bloody point?”

Ben Green is director of data, platforms and exchanges at Yahoo7

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