Advertising has undergone a modern shift thanks to new emerging technologies and the growing availability of data. This shift is enabling marketers to make smarter decisions with advanced insights into our audiences, as well as attribution of sales and conversions to our marketing efforts. We can now work smarter, not necessarily harder, to narrow our advertising where it works best.
Modern advertising is felt in the following three areas:
1. Targeting & Reach:
- Programmatic buying has heavily impacted targeting and reach and recently replaced direct buying, which has helped advertisers to no longer be limited by available inventory.
- Programmatic buying offers more advanced second- and third-party targeting techniques, allowing marketers to better target their audiences.
- If you are looking to get started with programmatic buying, a great platform to try is SiteScout.
2. Audience Aggregation & Nurturing:
- Audience aggregation and nurturing allows us to aggregate data and build up audiences of like-minded individuals and then segment and target them accordingly.
- This is the next progression of retargeting.
- Three recent changes to retargeting changes:
- Rise in content marketing
- Shifts in technology (particularly data management technology)
- Rise in data onboarding services (bringing data online) & cookie matching technology
- Three recent changes to retargeting changes:
- Advanced measurement allows us to bridge the gap between online and offline data. With online and offline data working together, we can attribute marketing efforts to sales/conversions.
How to Align Your Media Buyers With The Shift To Modern Advertising”
The shift in modern advertising may be something you have to work with your media buyers on to ensure your pricing/commission structure is advantageous and working for you. Read more about this in our blog The Secrets to Making Digital Media Buys More Profitable for Your Agency.
Charity of the Week:
We hope you want to join us on our journey. Find us on IterativeMarketing.net, the hub for the methodology and community. Email us at [email protected], follow us on twitter at @iter8ive or join The Iterative Marketing Community LinkedIn group.
The Iterative Marketing Podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste.
Onward and upward!
Steve Robinson: Hello, Iterative Marketers! Welcome to the Iterative Marketing podcast, where each week we give marketers and entrepreneurs actionable ideas, techniques and examples to improve your marketing results. If you want notes and links to the resources discussed on the show, sign up to get them emailed to you each week at iterativemarketing.net. There, you will also find the Iterative Marketing blog and our community LinkedIn group, where you can share ideas and ask questions of your fellow iterative marketers. Now, let’s dive into the show.
Hello everyone, and welcome to the Iterative Marketing podcast. I am your host, Steve Robinson, and with me as always is the sincere and refreshingly honest Elizabeth Earin.
Elizabeth Earin: Hi Steve, how are you?
Steve Robinson: I am doing well. How are you doing today?
Elizabeth Earin: I am good.
Steve Robinson: Good, good. We are gearing up for Halloween around our house. I don’t know if you have got the same.
Elizabeth Earin: Yes, yes. We haven’t bought a Halloween costume yet but we have been talking about it. And instead of candy, I am going to be that evil house. I am handing out Play-Doh this year.
Steve Robinson: That’s better than toothbrushes, right?
Elizabeth Earin: Yeah. Well, we got a note from a neighbor saying we have got two kids in the neighborhood with a nut allergy, and if we didn’t mind, if we could have something for them because it’s hard for them when they go trick-or-treating. And I thought, well, who knows who else is out there. And so Costco had a really great deal for it so I have got 85 things of Play-Doh. And whatever we don’t give out, then my darling son will get to play with.
Steve Robinson: That’s awesome. Well, maybe in our new house, we could do that. In our old house, there was no way we could. We were like the thoroughfare and where we sat in relation to the rest of the city, a lot of folks would come from lower-income neighborhoods and drop off in our neighborhood so we would have a crazy just steady stream of kids coming through. And there’s no way — we would have gone through — we used to go through 5, 6, 7 of those giant bags of candy.
Elizabeth Earin: No, I don’t even think I had 15 trick-or-treaters last year so we live kind of on that edge of the – I can’t say the word – rural area, so we don’t get a whole lot.
Steve Robinson: Well, then you have lots of extra Play-Doh.
Elizabeth Earin: Um-hmm, yes.
Steve Robinson: So what are we really talking about today instead of trick-or-treaters and Play-Doh?
Elizabeth Earin: Yes. Today, we are talking about the role of data in modern advertising.
Steve Robinson: Excellent, excellent. And this is — kind of be a multi-faceted episode. We are going to hit on a couple of different areas here about how advertising has really changed as we, as marketers and advertisers, have so much more data on our hands, right?
Elizabeth Earin: Yeah. New technologies have really given us new ways to use that data. And so we see this or we feel this in three separate areas. The first is targeting and reach. the second is audience aggregation and the third is measurement. And for each of these areas, we are actually going to talk about the changes within the industry that we have seen in the last few years and where this presents an opportunity for modern marketers, either for ourselves or for working with our clients.
Steve Robinson: Excellent. The first of those areas you mentioned is targeting and reach. I think this is one of the areas that has really changed in the last several years and continues to change today, particularly with the adoption of programmatic, right?
Elizabeth Earin: Yes, yes. When you take a look at where we were just even a few years ago, direct to buys were the norm. That’s what everyone was doing. They were calling directly and purchasing the advertising space that they wanted and the specific publication they wanted, and a lot of times, the specific placement that they wanted within that publication. That was the only way that they could guarantee it. And programmatic, which has become more popular today, was something that you – if you had a little bit of extra budget, maybe you throw some money there but it wasn’t really something that was part of your actual strategy.
Steve Robinson: And it really came down to quality because even just a few years ago, if you wanted good inventory, if you wanted to be on name brand sites, you wanted to be above the fold, you didn’t want to be one of fifty ads on that particular page, you really had to do those direct buys. So in addition to the idea of having guaranteed inventory, which has become less important, also having decent placement really required some direct buys. That really isn’t true anymore, is it?
Elizabeth Earin: No, it’s not. We have really come to a point where there are not limitations on the inventory that’s available for programmatic advertising. And so today, more and more of that premium inventory that we could only get through those direct buys before is now sold on the exchanges. And some of them are private exchanges but even the public ones are getting better inventory due to the new technologies that are out there.
Steve Robinson: Yeah. And along with this, better inventory targeting has also improved significantly. So if inventory wasn’t the reason you couldn’t jump on the programmatic bandwagon, oftentimes it was targeting, but we are seeing changes in new, novel ways of targeting media as well.
Elizabeth Earin: And third-party targeting has gotten richer and more accurate as well.
Steve Robinson: Yeah, and it’s not just third-party targeting. There’s also second party targeting which has seen a significant growth in the last couple of years and will continue to grow. That’s where brands aren’t just beholden to buying audience data from these big companies that are aggregated, like NewStar or BlueKai or some of the other larger data brokers, but we can also buy data directly from other brands that maybe they are aggregating that data as people interact with their content on their site or from smaller publications or other publications with niche audiences where they are able to slice and dice that data directly off of their subscriber base. And so we are able to really get much richer data than we were able to before, just from what was available from the larger data warehouses.
Elizabeth Earin: Predictive platforms have also given us the ability to take advantage of some of that artificial intelligence and target prospects even before they are in market. So our ability to target has dramatically changed over the last few years.
Steve Robinson: So when we look at what does this mean to us, as marketers, and it means a number of different things. First of all, we have the targeting ability right now more than ever before and it wasn’t bad before. Now it’s just amazing. So we are not reliant on publishers to get in front of the audience that we want to get in front of between the different types of targeting available, first-party, third-party, plus some stuff that we will talk about later with CRM targeting and IP targeting. It’s giving us the ability to really market directly to the individuals that we want to market instead of having to market through a publication.
Elizabeth Earin: And we have talked about this before, it’s to the point where this is where that creepiness factor can sometimes come in, where we can kind of scare people a little bit. So there’s a lot of opportunities here to target. It’s just a matter of how much we want to target.
Steve Robinson: Yeah. It’s really less about figuring out how to reach our audience now to figuring out the best way to reach our audience. And we will get into that a little bit later as well, but the other key thing is while we had pretty good targeting before, we didn’t always have access to inventory. That’s not true anymore. So if you are still thinking that programmatic sucks because you can’t get decent inventory and everything’s below the fold and remnant inventory, that’s not true anymore. Today, you can get the good inventory and even better targeting.
Elizabeth Earin: Yeah, and actually, we have a great example about this. Do you want to talk about the experiment that we ran for one of our manufacturing clients?
Steve Robinson: We had acquired a new client and we were working with them on how they were doing their digital advertising prior to our involvement. And the key was really getting some measurement around what they were doing. We didn’t want to come in and say you need to change everything, right? We wanted to come in and say, well, let’s measure what you are doing, right? So, we set up some better measurement around the direct buys that they were doing and then, as well, we set up some programmatic advertising and compared the performance of the two. And we didn’t just compare the number of clicks they were getting or the cost per click or the cost per impression, but we also looked at the traffic data that they got on the other side. And we were able to produce the same quality of traffic but add up to or I think it was around one-tenth the cost of generating that traffic when we looked at targeting people programmatically instead of targeting them with direct buys.
Elizabeth Earin: Yeah. There is a huge difference in performance there. So I think if you are not currently using programmatic or real-time bidding, this is a great place for you to really start and you should look at directing some of your advertising spend here. And SiteScout is a great place to start.
Steve Robinson: SiteScout has no minimum to buy or barrier to entry. You have to throw a few bucks in an account there, and so from that standpoint, it’s a great place to play around. It’s not the best DSP out there but it’s certainly a fine place to get started and get your feet wet.
Elizabeth Earin: So where is the second area that we kind of talked about there being a big change?
Steve Robinson: Yeah. I am calling this audience aggregation. I don’t know that there’s really an industry term about this but it comes down to kind of the next progression in retargeting. If you rewind a few years, retargeting was really a tool that was used by primarily e-commerce companies when they needed to get somebody back to the site to complete a sale. So I put something in my cart. I abandon it. Let’s get that person back to finish that sale because they have expressed some interest in that product for three-quarters of the way there. Let’s push them over the line, but that same retargeting technology has been used very differently in recent years by other brands that aren’t even e-commerce.
Elizabeth Earin: So brands like Kraft Foods have really paved the way to smarter retargeting. And we have talked about them before because there’s such a good example of how to do this right. And what they do is they take all of the data that they get from kraftrecipes.com and they use that to then make sure that they are getting the right products in front of the right people.
Steve Robinson: And really, it’s the convergence of three different changes in marketing, particularly digital marketing, that have driven this shift in retargeting away from simply product interest to building up audiences of people to target. And the three changes are, first of all, the rising content marketing because if you don’t have the content, then it’s very hard to build an audience off of first-party data. But as we, as marketers, have adopted and embraced content marketing, that’s become an easy win, right? The second is shifts in technology. And this is something that we are still seeing a wave of and that’s particularly DMP technology which is your data management platform. Not all brands have access to these yet because they are still really expensive, but I would expect that to change over time. And we are seeing a lot of activity in this space as Oracle bought BlueKai, one of the big players in the space. And then Salesforce is in the process of acquiring a DMP called Krux, and so expect to see DMPs becoming much more mainstream and the technology really enabling building these first-party audiences. And the third one gets around the problem of marketers that have great CRM systems, a treasure trove of targeting data but it’s stuck in an offline manner, right? We can send direct mail. We can cold-call. We can send emails but how do we get advertising in front of those people? And so we are seeing a rise in data onboarding services or cookie matching technology that will let you take that CRM data and apply it to your advertising stream now so that you can focus on nurturing an individual audience now using first-party cookie data or CRM data to get the right message continuously in front of the right audience.
Elizabeth Earin: And Facebook and AdRoll are great examples of this, where they allow you to take that underlying cookie matching technology and then roll that into your own advertising platform as well.
Steve Robinson: Yeah, and we are adding a third technology in the mix when we are working with our clients in this as well. So we will help them figure out how to slice and dice their audience, build up these narrow audiences that we want to nurture over time and then we will get to them through first-party data and cookies. We will reach them through CRM targeting and then we are throwing a third technology called IP-based targeting or account-based targeting that allow you to take the physical address of either a household or a business and then match that up as well. So if you have got a database of people or households or audiences that you are trying to reach, you can mobilize that in so many different ways today that it’s amazing what’s possible to take that captive audience and nurture it and aggregate it and segment it and tie it towards your objectives.
Elizabeth Earin: And the IP-based targeting, I think it’s important to know it’s getting used a lot in B2B. And a lot of what you hear when you read about it is it’s talking about B2B but there are B2C applications as well. There are colleges and universities out there that are using it. I think we have talked about this before, but they are actually using it to target households because they know that the person making the decision about college isn’t always one person. It’s usually a family decision and so they are using IP-based targeting to go after those potential students.
Steve Robinson: So what does all of this mean to us, as marketers? How does this shift away from simple retargeting to building and nurturing audiences impact our work?
Elizabeth Earin: I think it’s interesting because it gives us the chance to now combine the idea of an entire tribe with our marketing and advertising. We are building an audience of like-minded prospects and customers and we now have the ability to segment this audience using both online and offline data which is something that wasn’t really available to us even just a few years ago.
Steve Robinson: Yeah, I know that we are taking this all the way to kind of to the limit in the work that we are doing with our clients. And not only segmenting audiences along like-mindedness or psychographics and demographics and things like that, but we are also segmenting based on where they are in their buyers’ journey which signals that we are able to get both from their online activity and CRM and IP targeting as well.
Elizabeth Earin: And it allows us just to create an even better, more targeted experience for them because someone who’s interacting with us in “See” state is very different than someone who’s interacting with us in “Do” state versus someone who’s already a loyal customer.
Steve Robinson: The other thing, and this is something that I guess is more future looking – well, it’s future looking if you are a large brand, because if you are a large brand, you have the budget for it today and you have the ability to integrate this today but keep an eye out on the DMP space — that data management platform space. We are seeing mergers and acquisitions in this space. We are seeing a few big players that are targeting enterprise, but I expect to see some smaller players and some more niche players popping up here shortly that will allow medium-sized businesses and maybe even small businesses the ability to get into the DMP game and be able to, in really smart ways, mix and match their first-party data, the people visiting their website and their blog with third party or second party data in order to build really richly segmented audiences online using cookies and device IDs and stuff like that. We are not there yet unless you are a big brand, in which case definitely dive in, but keep an eye on that because I think it’s shortly around the corner here.
Elizabeth Earin: In the meantime, you do have the opportunity to take existing retargeting technology and hack it a little bit to build audience polls tailored to your exact needs and we do that now.
Steve Robinson: If you are smart about it, you can take basically any retargeting platform, whether that’s Facebook has its retargeting, Twitter has its retargeting or any DSP or ad network has its retargeting tools as well, and build smart audiences. Not just people who visited your website or visited this particular product page, but who have engaged in certain behaviors and build a solid pool to go back and bring those people back to your site for the next thing in the funnel or the next thing in the pipeline or the next journey state or whatever you want to call it to keep them nurtured and moving through where you want them to go. I’d say at a minimum, if you are not tying – some of that cookie stuff can get hard but if you have got a database lying around, either because your e-commerce or because you have a CRM system, and you are not tying that back to build an audience, to build a captive audience and try to nurture it, there’s no reason not to do that. It’s as simple as dumping that list of contacts out of that system and uploading it to a tool like AdRoll or Facebook, and boom, you have a captive audience that you can now make sure that you are creating a tailored experience to based on what you know about them in your database and if you are not doing that today I’d strongly recommend you start.
Elizabeth Earin: And then getting into our third and final point here today.
Steve Robinson: Before we jump into our third point — sorry to cut you off, Elizabeth. I think now would be a great time for us to take a quick break and go help some people.
Elizabeth Earin: Before we continue, I would like to take a quick moment to ask you Iterative Marketers a small but meaningful favor and ask that you give a few dollars to a charity that’s important to one of our own. This week’s charitable cause was sent in by Jeff Kendrick from Missoula, Montana who asks that you make a donation to The Parenting Place. Since 1981, The Parenting Place has been providing child abuse prevention services by helping families to develop healthy parent-child relationships throughout Missoula County. Learn more at theparentingplace.net or visit the link in the show notes. If you would like to submit your cause for consideration for our next podcast, please visit iterativemarketing.net/podcast and click the “Share a Cause” button. We love sharing causes that are important to you.
Steve Robinson: And we are back. So before we left, I cut off Elizabeth, but prior to that, we talked about the first two areas where we can – where technology has really changed the way that data and advertising interact. So the first is that we now have this open platform of programmatic buying and the data to target the advertising within the programmatic buying. The second is the idea of aggregating audiences and nurturing them instead of simply retargeting products and taking that same technology and using it in smart novel ways there. The third area gets into measurement, and if there’s one area that you see a crazy number of startups and different tools on the market today gets into this measurement area because we all want more data. We don’t know what we are going to do with it when we get it but we all want more data, right?
Elizabeth Earin: Well, we need the data. I mean, if we don’t have the data, then some of these other things that we are talking about is just sort of throwing spaghetti against the wall to see what sticks. It’s the data that helps us put together sort of that strategic plan where we are spending smartly, and Google Analytics has really helped in this area by opening up a number of different ways to close the loop and pulling both that online and the offline sales data back into analytics. I know that they recently announced an integration with SalesForce. Do you want to talk a little bit about that?
Steve Robinson: The attribution modeling inside of these tools has gotten really good as well. When we say attribution modeling, we are saying how do we want to attribute this sale or this opportunity back to the marketing and advertising that generated it, and Google has invested a lot of time and effort into this in recent years to really bring their free tool into parity with some really expensive paid tools and in figuring out what’s working and what’s not.
Elizabeth Earin: And then they have also released Data Studio which is another free tool that they offer that allows you to mix and match data from a variety of different sources for analysis. So it’s nice because it allows you to have that one big picture where everything is sort of on this level playing field.
Steve Robinson: And it’s gorgeous visualizations. I am just starting to play with it right now and I am excited with the opportunities that it brings because it’s some really cool BI. It’s not as powerful as some of the higher-priced tools out there, but it’s free and so it’s amazing that this is available to any marketer today.
Elizabeth Earin: And Google is not the only one that’s releasing new technology that allows us to acquire, synthesize and act on the data that we are seeing. The list of tools that have been released in the last couple of years is impossible for us to list everything but you have got things with A/B testing. You have heat mapping, data visualization, attribution polls and even more that have popped up at every imaginable price point. Some are free, some cost money, some are something that only big brands are going to be able to purchase, but no matter where you are on that price spectrum, wherever your budget lies, you can find different tools that you can use to help you again make smarter marketing decisions.
Steve Robinson: And it’s not just acquiring new tools for measurement, but there are tools that many marketing shops are adopting today for other reasons, particularly things like marketing automation that are just a treasure trove of more data that you can use, if you think about the amount of segmentation data that you have inside of your marketing automation tool as well as the fact that marketing automation has an idea where people are in the funnel and whether they have converted. So now you have got conversion data on top of segmentation data that you can go back and apply to your other data to really get a very clear picture of what’s working, what’s not, where it’s having an impact, etc.
Elizabeth Earin: So what does this mean to us, as marketers?
Steve Robinson: Well, I guess first of all, I’d love to take a deeper dive on this topic. I think that if we were to give it its justice today, this would be an hour and a half long podcast, so Elizabeth, I would like if possible for us to come back and revisit this.
Elizabeth Earin: Specifically in terms of…?
Steve Robinson: Specifically in terms of on the tools that are available for measurement and how to set those up as well as the tools that are available for experimentation and polling and learning about your audience and how to set those up, because I don’t think we have done a deep-dive into the tools. I don’t think we have gotten that tactical in the past.
Elizabeth Earin: Yeah, and I think that would be a very useful podcast for our listeners and I am sure they’d appreciate us not covering it all in one.
Steve Robinson: Yeah, but takeaways from this high-level discussion here, I think would be definitely take a look at what’s possible as far as attribution goes, Google analytics. It may be low-hanging fruit for you to setup and that would really get you quite a bit ahead in understanding what’s working and what’s not when it comes to your digital advertising. And then the same thing would be true for A/B testing, if you are not using one of the tools off the shelf right now to do A/B testing for the experience after somebody gets to your site, you should be. We like convert.com. There’s also Optimizely and Google Experiments as well which I think they just refreshed or made some changes to make them easier to use, but then there’s also anytime you are placing ads, most of these platforms allow you to easily pit two different creatives against each other and see which one’s performing better and so that can be a great opportunity to generate more data by your audience as well as introduce that continuous improvement element.
Elizabeth Earin: So when we combine all three of these sorts of changes that we have talked about in today’s episode, I think two things happen. The first is that we find that the best advertisers are advertising smarter, not harder, and they are investing in the data and narrowly targeting their advertising where it works best. And I think that works for all of us because none of us have enough time to do everything we want to do. If we can be smarter about what we are doing rather than working harder, we can be more efficient.
Steve Robinson: Yeah. And the other thing that we talked about before we hopped online here and how this changes things is it complicates digital marketing, right? I should say digital advertising. Digital advertising used to be pretty simple. You find a publication that aligns with your audience, you place some media and then you go and measure the number of clicks that come out of it, right? And now we are talking about this idea of building up audiences or narrowcasting down to very small segments of our audience and suddenly it becomes a lot more work and then you throw optimization and experimentation on top of that and the old models of how advertising was bought and sold don’t necessarily line up anymore. Do you want to talk about what that means for brands?
Elizabeth Earin: Yeah. So if you are a brand working with a media buyer on a commission model which is how most media buyers are working, it may be hard to get them to embrace these changes because as they break the ad buys down into smaller and smaller targets, they are inheriting more work but they are not getting any more compensation. And so getting them to get on board with this idea might be a little bit hard and you may want to explore other models with them.
Steve Robinson: Flip side, if you are an agency and you are selling media-buying to your clients either directly as a media buyer or as a full-service agency, then this is an opportunity for you to take a look at your models because if you aren’t, you should probably consider shifting your model away from a commission-based model, particularly for digital advertising, into either an hourly model or a pay-for-performance model if your client base can work that way or a flat fee model, right? So that now you are getting compensated based on the complexity of your program. There are hybrids of all of those as well. I think, Elizabeth, you published a great blog post on the Brilliant Metrics blog that kind of breaks down those options.
Elizabeth Earin: Thank you. Yeah, The Secrets to Making Digital Media Buys Profitable for your agency, and we will link to that in the show notes.
Steve Robinson: So to sum everything up here, new technology has given us an unprecedented ability to target just the people we want to market to and do it at scale through programmatic because programmatic is now a real thing and gives us the inventory.
Elizabeth Earin: Our content marketing and those new technologies allow us to advertise to a captive audience, building our tribe and tailoring the message to be perfect for what that persona is looking for at that specific state in their customer journey.
Steve Robinson: New technologies give us the ability, and really these are free technologies. Google Analytics is free. So there’s not a whole lot of excuses not to be at least attempting to do some degree of attribution modeling, some degree of A/B testing in order to really take our advertising to the next level and get the data out to know what we can be doing to be improving.
Elizabeth Earin: And all of this combined represents a shift in digital advertising. The best advertisers are going to put more effort into targeting, building audiences and measurement and the results, and that’s going to result in lower media costs and higher returns but a lot more work to do it, so we are going to have to take a look at the traditional commission fee basis that we have been doing a lot of the pricing or setting pricing or paying for media on and see what might be a better option so that we have a mutually beneficial relationship for both the brand and the agency.
Steve Robinson: Bottom-line, we should be taking all of the opportunity that this technology and this rich data gives us and we should be advertising smarter, not harder, and I want to encourage everyone in the audience to take a look at what they are doing right now from a digital advertising standpoint, see where they can apply data to get more bang for their buck. I want to thank everybody for making time again for us this week and until next week, onward and upward.
Elizabeth Earin: If you haven’t already, be sure to subscribe to the podcast on YouTube or your favorite podcast directory. If you want notes and links to resources discussed on the show, sign up to get them emailed to you each week at iterativemarketing.net. There, you will also find the iterative marketing blog in our community LinkedIn group, where you can share ideas and ask questions of your fellow Iterative Marketers. You can also follow us on Twitter. Our username is @iter8ive or email us at [email protected] The Iterative Marketing podcast is a production of Brilliant Metrics, a consultancy helping brands and agencies rid the world of marketing waste.Our producer is Heather Ohlman with transcription assistance from Emily Bechtel.Our music is by Seastock Audio music production and sound design.You can check them out at Seastockaudio.com. We will see you next week! Until then, onward and upward!