Mixed Blessings of Digital Targeting

Understanding “Why” Can Increase Your Digital Marketing Effectiveness

By Jesse Epstein and Rob Duboff

Have you ever opened Facebook and seen an ad for a product you were just discussing?
Clicked on CNN.com and seen those jeans you were browsing at Banana Republic last night?
Seen tweets talking about how great that hotel is you were checking out for your next trip?

Pictured: a digital screen with a pixelated bull's eye target and arrow. The image symbolizes the trade-offs of digital marketing, which allows for greater targeting and personalization at the expense of seeming too much like Big Brother and having ads appear where brands don't intend them to be.

It seems like the brands we love know exactly what we’re doing… largely because they do. But, is that actually helping marketers?

In 2016, digital advertising spend surpassed TV for the first time. But in 2017, are we starting to see “the bloom come off the rose” for digital targeting? It seems simple for marketers to let the algorithms and auctions find the right people at the least cost, but it’s far from a perfect science.

Digital marketing has very tangible benefits – with many brand leaders investing 30-50% of their marketing budgets on this channel alone. Yet, if you pull back the onion a layer or two, it’s not without its challenges:

1. Marketers are finding their messages in places that don’t fit their brand

This year, we saw 2,600 companies, including Kellogg’s, Allstate and Warby Parker, pull ads after receiving customer complaints about the mismatch of values and content.

2. We’re not learning as much as we had hoped about what’s working

Proprietary algorithms and auction complexities often leave marketers in the dark. Data on clicks and sales is nice, but it doesn’t provide enough context to understand where new leads originate and why they ultimately show interest or buy.

3. Personalized marketing has to walk a fine line

It’s a balancing act to help consumers learn more about products they’re interested in while at the same time avoiding privacy intrusions or ill-timed touches. Any doubts? Just ask Alexa what she’s up to.

4. We wonder what the regulatory environment will be for social media and digital ads

Once transparency increases for digital targeting, consumers may be less comfortable with the convenience of targeted ads for items they’re interested in – potentially causing marketers to hit pause.

Nearly half of online ads don’t reach the intended audience according to Nielsen (reminiscent of Wanamaker’s famous quote). It raises the question is digital targeting merely a number game. While digital ads promise more impressions per dollar than traditional media, like TV, are marketers evaluating if it’s actually reaching the intended audiences?

Digital measurement emerged on the scene as an affordable way to match online behavior with digital ads that convert to sales, but as the top of the funnel is jammed with more impressions, we’re hearing clients ask why customers do what they do to understand conversion across the sales cycle and the impact on their brands.