Better advertising targeting and implications for brands

WPP digital organized an interesting conference about new media and advertising last Friday. Part of the discussion addressed the new targeting opportunities available for marketers and brands, suggesting that they will increase content relevance and consumer engagement.

No groundbreaking news here, but there are some quite interesting implications for brands. Let's take an example and try to see how this works for a minute:

Jack is a single guy, 18-24 years old and he lives alone. Every time he surfs the Internet or watches a show on digital TV we collect and process information about his attitudes and behavior so we can start serving him more relevant content. Ultimately, the promise for Jack is that he will never have to see another diaper ad again in his life (or at least until he gets married). Equally, the promise for brands is that they will never need to waste resources serving diaper ads to Jack. Sounds like a win-win. Better results for brands, less clutter overall. Less clutter?

Let's think about this for a minute. Until recently, Jack would be exposed to 10 ads for every hour of TV watching (similarly for Internet surfing). Of course, some of these ads would be for diapers and Jack would probably pay no attention. A cluttered world? Maybe. Inefficient use of resources? Perhaps. Advertising is far from perfect and we all know that.

Fast forward 3-4 years. Brands now have better information about Jack's behavior (or even Jack's psyche) so they can serve him more relevant content. Jack still sees 10 ads, but now all of them are relevant to him: cars, deodorants, clothes, all this ads target single guys just like him. More efficient use of resources? Totally. Less cluttered world? Hmm. I actually believe, that new targeting technologies will raise the bar and eventually increase competition. More relevance for Jack means more "clustering" of relevant offers: cars vs cars not cars vs diapers. A beauty contest. I am not sure if this is called more or less clutter, but it's definitely a lot of information for Jack.

So what happens then? People driving this change claim that targeting technology will save the day, by adding more layers and capturing Jack’s mode and needstate. The theory goes that this will enable brands to differentiate and better target Jack’s different needs. So even better targeting is the solution to the problem.

But then again, this technology will (again) be available to all the brands. So the next step will be that Jack is going to be bombarded by multiple W-relevant ads using information about Who he is, Where he goes, the time of the day (When), What he is looking for and Why. Undoubtedly this will be an iterative process and as such it's hard to predict what the key success factors will be.

So which brand will win? Is it the brand that stays one step ahead in the targeting technology race? Or the brand that also leverages this technology with the best creative (at a personalized level)? Or is it the brand that has the most relevant positioning but also uses the best technology and the best creative? Maybe in the end it is just the brand with the best price?

Difficult to tell. As always, different categories may have different rules. For occasion based categories, location and time relevance of targeting (through GPS and mobile phones) will play a key role. For others, that have a longer decision making process (insurance) more transparency may bring more commoditization and price competition.

At the end of the day, one might want to think what the new "persuasion strategy" will be. Do you want to build a strong image and ensure that you exceed expectations with your product? Or do you want to bet on the ability of new technology and channels to influence decision making at the last possible moment (for instance at the point of sale)

There is never a right or wrong answer. What's certain though, is that staying ahead of the competition will only get more challenging requiring new skills.