The relationship between advertisers and customers is changing, Forrester calls this new era the “Age of the Customer”, in which consumers are in control of their interactions with businesses and, to be effective, online advertising has to be targeted and contextually relevant.
The way consumers research, purchase and interact with brands online is changing — last year there were more searches on mobile than desktop. Forrester recently said that 2016 will be defined by empowered customers who expect to get anything they want immediately, in context on their mobile devices and estimated that people pick up their mobile devices 150 to 200 times a day. These mobile moments are the next battleground to win and retain customers.
Our Digital Connections research supports this prediction, over half of connected consumers (55%) say their mobile is valuable for researching purchases and 48% regularly use their mobile to research products while out shopping in physical stores. Technology is changing consumer behaviour and brands need to adapt their online marketing activities to suit their customers’ shopping preferences.
3 tips to optimise online advertising
- Use the right metrics
Online advertisers have been using the CPM metric (cost per thousand impressions) to buy advertising – a blanket approach – for years. In this time online advertising has evolved and while CPM drives traffic, due to its ability to reach large audiences cost effectively, it doesn’t necessarily drive sales. With marketers increasingly under pressure to demonstrate ROI, CPM can lack accountability as a measurement, because it doesn’t lend itself to evaluating the effectiveness of an acquisition campaign.
Performance metrics, such as cost per acquisition (CPA) where a fee is only paid when a new customer is acquired, are more effective measures and encourage a more targeted approach. It is still appropriate in some cases to buy inventory on a CPM basis, if you require a large reach for example, but tracking conversions can provide a CPA metric and enhance the measurability of a campaign.
- Understand your existing customers
Brands collect data from visitors to their websites every day but few analyse this data effectively to gain insights to drive their online advertising strategies. By listening to website traffic using artificial intelligence it is possible to identify patterns in the data collected that a human brain can’t recognise, such as the typical online purchase journeys of customers that convert quickly with a high average order value.
Understanding customers’ online behaviour allows marketers to adjust their websites to optimise user experience and improve conversion rates of their existing customers, but these insights can also be used to identify new customers. This is far more effective than using sociodemographic information and brands, including Netflix, are using this type of behavioural data to identify and prospect new customers.
- Focus on conversions not traffic
Acquiring new customers is notoriously expensive and this is mainly a result of untargeted campaigns that have low conversion rates. Brands need to be more focused with their online advertising, this was proven by our recent study that found 49% of consumer will reject a brand that sends too many or irrelevant ads. Consumers want to find new brands, but marketers that serve the wrong ads are damaging their relationships with prospective customers. A more focused approach is required.
Insights about existing customers can be plugged into a DMP (data management platform), which observes millions of online customers’ online purchase journeys. By combining these data sources, the DMP technology can identify similar online users that are likely to convert when shown an ad for a relevant product or service. Programmatic media buying technology then serves the ads and determines what device the ad is served on. As a result, less users are targeted but conversion rates increase, resulting in higher ROI.
Our programmatic solution, TD ENGAGE, can cost effectively identify, target and convert new customers who you haven’t engaged with previously. Leading brands are using this solution and are seeing impressive results.
Get in touch if you’d like to find out more about how this solution could compliment your acquisition strategy – you’ll only pay for results, not impressions.