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By now, you’ve hopefully heard of Custom Audiences (CAs), aka Tailored Audiences, aka CRM re-targeting. It was one of my predicted trends for 2014, and the momentum is picking up massively.

Yet, most people are using them wrong.  Which makes me sad.

CAs are THE biggest thing in marketing right now, and yet very few marketers are using them correctly. 

In this post, learn from my bitter experience so you too can revolutionise your marketing plans using Custom Audiences.

1. Do start experimenting with Custom Audiences. Today.

“Hang on. Isn’t it just another trend?” I can hear you saying.  “Hey Parry, a couple months ago you ranted about how trends are stupid. What gives, dude?”

Well, CAs are a trend. In a way. But they're actually not. See, the thing is, your email, and your customers email, is your digital passport

It’s the only thing that connects your customers across disparate online channels. All that CAs do is give you a way to connect them.

So CAs aren’t really a trend… in reality, they’re trend parasites. They latch on to the trend motherships (in this case, social media platforms) and allow you to monetise them using data you already have. 

It's like this: you can continue what you’re doing, or do something different. I’m deeply indifferent. Honestly. I don’t care. What I do care about is the intellectual stimulus provided by CRM retargeting. Let me explain.

I’ve rode the waves of previous trends. Facebook, twitter, whatsapp, whatsmyalls. Some work, some don’t. But at the same time, I get online marketing. And so do you. Surely, we can agree on one fundamental point: it’s all about effective targeting. 

The fact is, 99% of social media advertising is inherently poorly targeted.

Historically, social media advertising sucked  And it has sucked for a while. A long while. Until you’re able to link your social campaigns with your other online channels, it will continue sucking.

Custom Audiences are the answer to this problem. So start using them. Now. 

2. Do target your CAs based upon customer behaviour, not just one size fits all.

Up until now, when you buy social advertising, you had to target across what are effectively demographic or pseudo-psychographic criteria. 

You could target followers of your followers on Twitter, or people who 'like' bunnies on Facebook, for example.

But, there is an inherent problem with this. 

When people follow someone on Twitter, they’ve clicked the mouse or tapped their finger. Even more so with the like button on Facebook! Someone likes something. Great.

An example now would be how the social media world has all joined forces to rebut the abhorrent kidnapping perpetrated by Boko Haram in Nigeria. 

Michelle Obama and David Cameron have both gone out of their way to post pictures of themselves denouncing this vicious, disgusting act of terrorism. 

They’ve been retweeted a bazillion times, ensuring all of Facebook and Twitter are with them in their unwavering condemnation of these jerks.

Michelle Obama twitter

Oh, one minor detail: the schoolgirls are still being held captive.

This is the thing. Retweeting, liking and so forth are not forms of activism. If someone follows you on Twitter, or even more disjointedly follows one of your followers, it is not a buying signal. 

It is a sign that they clicked a button. It’s the same for likes. (For further reading on this, I highly recommend this Malcolm Gladwell piece in the New Yorker).

So when you advertise on Facebook and Twitter using their standard ad buying methods, you are doing the above: retweeting a picture of yourself with a hashtag, but not actually inciting action.

This is where Custom Audiences come in. 

Your potential customers are in a buying cycle. You send them emails based upon their place in the buying cycle. And yet, your social campaigns are disjointed – they are based upon their demo/psychographics, not their propensity to buy.

With Custom Audiences, you can target ads across social platforms to your customers with creative and with messages that are in tune with their buying position.

Are they lapsed? Target them with relevant messages. Basket abandoners? Get them back without cookies. Just purchased something? Upselll!

This is the beauty of Custom Audiences. You no longer need to treat email and social as mutually exclusive channels. You can combine the two in your marketing campaigns to amplify results.

3. Do optimise for CPM/CTR as appropriate

Most online advertising, other than display, is focused on maximising clicks.  This is a great idea – for when people are ready to make a purchase decision. 

However, not everyone is in buying mode all the time.

For example, when’s the last time you walked into a shop, picked up a can of Coke, and said, “I saw the Coke billboard outside which has caused me to purchase this can.”  It doesn’t happen, and yet brand-based display is a hugely powerful branding tool.

You already know a lot about your email list.  You know those who have purchased recently, those who have lapsed, those who score highly in RFM and other propensity models, and the like. 

Your marketing plan is also likely split between various campaign objectives – for example, AIDA – awareness, interest, decision, action.

When in the awareness phase of a campaign, determine who your target email list is, and bid hard on CPM. You’re not going after clicks. 

As an aside, one of the externalities of digital marketing is that we have become obsessed with ROI across every marketing activity. However, the truth is that not all marketing activity is about ROI.

That’s an uncomfortable point, but it’s true. Click-based attribution models under-report brand-based advertising and over-report direct response channels. 

People love paid search because you can track from click to purchase… but there are a lot of moving parts that get people to that point in the first place.

Custom audiences allow you to plan an actual marketing campaign – so from A to I to D to A – and multi-attribute the aggregate effect of both email and social campaigns to determine true attribution.

Anyways, with the aside done:

When you have built awareness, and people are interested, this is when you convert that Custom Audience to cost per click, and up your bid price.  Your creative should move from straplines and benefits to actual direct response language. 

People have been warmed up, and now it’s time to strike.

4. Don’t be creepy

OK, here goes a bit of a rant. I can’t stand cookie-based re-targeting. I don’t mean from a marketing standpoint; I get how it generates ROI. I mean from a consumer standpoint.

Like you, I spend a lot of time information gathering on various products on the internet. Sometimes it’s competitive research, sometimes it’s presents for others, sometimes it’s clicking on stupid links my “friends” post on Facebook.

But just because I’ve visited a site, it doesn’t mean that I want to be stalked around the internet

I know that cookie-based retargeting works to some extent. People do need to be reminded once they’ve been to your site and abandoned it. But, there is an inherent problem here – this marketing method only works when people have already been to your site!

Say you get 50k impressions per day.  You can re-target the vast majority of them. Great. But what about all of the people on your email list – that is, people who have willingly given you their contact information? 

If they’ve not gone to your site, all you can do is send them more emails.

So you start using Custom Audiences. Super! You've been reading my blogs!

But, don’t be creepy about it. Don’t stalk them. Don’t be too specific to their previous purchases. Don’t be annoying. 

Make your CA creative beautiful and effective, but don’t be a creep. 

5. Don’t attribute ROI to CAs in isolation of other channels.

If you’ve been reading the above, then you’ll realise that the true power of Custom Audiences is not the advertising in itself, but the amplification effect it has on other channels.

The first reaction, as I mentioned above, is going to be to try to attribute ROI to Custom Audiences as its own channel.

If you do this, you’re going to be sorely disappointed. You’ll find that CAs provide slightly better ROI than normal social ads, and much worse than email. I can guarantee it.

So you’ll probably have a hard time convincing the budget holder to push anymore money towards CAs. You’ll still be sending out a bunch of tweets and updating your Facebook page. And you’ll still be sending out a bunch of emails. So really, nothing will change.

But this would be sad! 

Custom Audiences are the biggest opportunity in online targeting since paid search. The whole point is you can create actual, multichannel campaigns across all of the platforms people use – email, Twitter, Facebook – and figure out which combination works.

So when your FD starts grinding you about the individual ROI of your CA spend, tell him/her to take a flying leap. That’s not the point. 

Think outside of the Excel formula and focus on taking your customers on a buying journey, not just a last-click one night stand.

6. Do have fun with it! 

Email marketing is boring. We can all agree on that. Upload a list, some HTML, and click send  Yay. 

The most fun you can have with email is split testing a few subject lines, and I use the word 'fun' in the same way that I consider a visit to my proctologist fun. 

But Custom Audiences are cool. Actually, they’re beyond that… they’re intellectually stimulating. For the first time ever, you can create graceful, beautiful, effective campaigns online that build upon one another.

So have a play, and have fun with it! 

Experiment a bunch. Try out new things. Focus on learning, not ROI. 

7. Do join the conversation about Custom Audiences.

The thing is, no one is really talking about this amazing new targeting method. Most people are still talking about cookie-based re-targeting, content marketing, native advertising, whatever. 

These things are all great, but none of them are revolutionary. Custom Audiences are.

So drop in some comments below, tweet about it, shoot me a note about it. Just get talking about it. Because those of you who do it first, and do it well, will benefit. 

Everyone else will just be left taking inane selfies of themselves.

Parry Malm stupid twitter selfie

Parry Malm

Published 15 May, 2014 by Parry Malm

Parry Malm is the CEO of Phrasee and a contributor to Econsultancy. Connect with him on LinkedInTwitter or Google+.

23 more posts from this author

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Adam

Great article,

We're in the process of setting up our CRM to work with the Facebook API so we can serve ads based on CRM statuses or activity.

The annoying thing is that (unless I'm mistaken?) Google hasn't got on board with this yet.

i.e. It would be useful if we could upload/manage email lists in Google to serve ads.

Also I believe Mailchimp is the only email platform that currently integrates directly with Facebook custom audiences (again unless I'm mistaken?). It would be nice if some of the other platforms joined too (dotmailer??).

One point I'd also mention which I don't think the article covered is the ability within Facebook to create 'lookalike' audiences. We're just about to start experimenting with these and looking forward to seeing how it works.

almost 2 years ago

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Austin Evarts

@Adam, we've built integrations with a few more ESPs so far: Hubspot, Constant Contact, Campaign Monitor, and Mailchimp (campaign events not just lists).

I'm happy to chat if you are interested austin[at]gochime[dot]com

We are also making it easy to build a lookalike from any segment you choose. Hope this is helpful. www.gochime.com

almost 2 years ago

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Aarthi

I run an ecomm startup for women's clothing. I have been an ardent fan on CA and have been running CA campaigns on FB for a year now and direct mailers to my small customer base. (I dont have a big customer base and hence no enterprise level CRM system).

The problem that I face is that although I manage to get the "Awareness" bit and even some "Interest" I am unable to convert to a BUY.

Any specific ideas or thoughts?

almost 2 years ago

Parry Malm

Parry Malm, CEO at Phrasee Ltd.

Hi all

All excellent points, thanks for commenting. Lookalikes are interesting indeed, fodder for a new blog post.

@aarthi the problem is one of channel. People go to Facebook to stay in the Facebook world, which is why dr campaigns have middlig response.

But there is a solution! Which is far too long to write withy thumbs. Drop me a line on LinkedIn or twitter and let's catch up...

Cheers
Parry

almost 2 years ago

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Mirek Cerny

We have observed that by targeting a Facebook ad to a Lookalike Audience based on a custom audience generated from the list of customers with highest propensity to buy we attract new purchasers who spend a 3x more than purchasers acquired by ordinary targeting. The trick is to get the underlying custom audience right. We use a predictive model for that.

almost 2 years ago

Parry Malm

Parry Malm, CEO at Phrasee Ltd.

@Mirek thanks for sharing - and no shock! Better targeted ads... In the correct part of the customers buying cycle... Well done sir!

almost 2 years ago

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