This article is an excerpt from Experian Marketing Services’ 2016 Digital Marketer Report. Download the full report to discover more insights and trends for the upcoming year!
Achieve maximum impact with addressable advertising
This is an exciting time for digital marketers, with the growth of new devices and channels bringing more opportunities to intelligently and creatively engage. However, this rapid channel growth also means there is more potential to overspend on marketing and advertising programs that do not achieve maximum impact. For this reason, it’s more important than ever to leverage for both traditional and emerging channels.
Through addressable advertising, you can use first, second and third party data to provide a better consumer experience and higher return on ad spend. Think of a marketing campaign as a vehicle which uses data as its fuel. In the past, the data that fueled the vehicle was basic demographic information such as age and gender. For example, a marketer may have wanted to target women between the ages of 25 and 35. This gets the car going and, in general, marketers see better performance than they would with no targeting parameters at all.
However, not surprisingly, with limited data and targeting capabilities comes a limited return on marketing investment, campaign effectiveness and reporting capabilities. By supercharging marketing campaigns with richer data to fuel performance, such as CRM data, the campaign can travel much further.
So where do you start when building an addressable media strategy? There are essentially four different types of data that can be activated for a campaign:
- First-party data (CRM data): First-party data is data the advertiser owns and can use for marketing purposes. For example, an insurance advertiser may want to create a win-back campaign to re-engage past customers. In this scenario, the advertiser would select all of the records of individuals who have not been active customers over a certain period of time, then provide that data to an outside party to conduct a privacy-compliant match process to the selected media partners across channels. Using their first-party data ensures that the insurance advertiser is targeting their win-back offer with accuracy and precision, the same way they would through traditional direct mail or email marketing.
- Second-party data (partner data): Second-party data is typically referred to as partner data. It is not part of an advertiser’s own customer or prospect records and would not typically be available to buy from a third-party data provider. In this example, the insurance company may have a brand partner relationship with an automotive manufacturer. The auto brand may make a list of recent SUV purchasers available to the insurance company for a co-branded, targeted campaign. This enables the insurance advertiser to create customized, creative messages for the target audience.
- Third-party data: Third-party data is data that can be purchased from either an offline or online data provider, such as Experian Marketing Services. With addressable advertising, it is very common for advertisers to combine third-party data with first- or second-party data to enhance their segmentation and targeting criteria. In our scenario, the insurance advertiser has a list of current automotive insurance customers and would like to cross-sell either a homeowners or renters insurance policy to them. Because the insurance company is not sure which customers are homeowners and which are renters, they need to purchase and add a layer of third-party data to complete the picture. Once they do, the insurance brand can target two distinct segments – one of current auto insurance customers who are homeowners and a second of current auto insurance customers who are renters. This is a great example of how multiple data sets can be combined for intelligent audience creation.
- Custom models: This last category includes look-alike and custom models. These models can either be built by the advertiser or by a company such as Experian. For example, the insurance company can look at their CRM data and select all of the individuals who have been loyal customers for more than five years by always paying their bill on time and maintaining a low risk to the business. Then a look-alike audience can be created for prospecting purposes. The insurance company is now going to be able to reach individuals who look like their best customers.
Once the audience has been defined, it’s important to figure out where you can reach these individuals across channels and media partners. The scale and reach of an addressable audience are uncovered once the audience matching process takes place. Use a neutral partner like Experian Marketing Services to ensure that you are matching customer records with media partners in a privacy-compliant manner.
By matching audience data to a user universe of media partners, marketers can not only deliver one-to-one messaging but also measure campaign impact through closed loop reporting. That means advertisers can directly tie campaign exposure data back to both online and offline sales in order to truly understand the ROI of their marketing dollars. The end result is an efficient, engaging, omnichannel strategy.