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Hello Brian. There are many ways an online ad can be personalised and targeted.
In this introduction to personalised ads online, I thought I'd order the information by marketing channel, rather than by types of targeting.
Ads can be targeted to behaviour, demographic, time and audience. Most people think of personalisation as a little more tailored than, say, device type, and more about personal information that a company has about you, be it name and age, or browsing and purchase behaviour.
Personalisation, despite implying one-to-one interaction, is often a more sophisticated automated and rules-based take on traditional segmentation of a database and delivery of a marketing message.
It can be based on information you have given to a company or on information inferred or collected with tags, or matched up with third-party data.
With marketing technology becoming more sophisticated and at the same time arguably easier to use, personalisation is an area set for prominence in marketing over the next couple of years.
CRM software allows companies to tailor web experiences to different segments of users and this redefines the purpose of a previously static web page or marketing message.
In this post though, I'm concentrating on advertising online and how it is personalised. Away we go!
Personalised display advertising
Retargeting is the channel where consumers are most aware of personalised advertising, as it's hard to miss when done aggressively.
Brands tailor ads delivered to a consumer through ad networks and based on their previous behaviour on the brand website (or perhaps in email).
The consumer is tracked by means of a cookie that drops when they trigger an event during browsing, perhaps by visiting a particular product page.
Retargeting tags (used to help retarget in a range of channels) are present on around half of the top 2000 websites in both the UK and US.
Bidding on the display ad inventory occurs programmatically, in real-time, as retargeting technology works with ad exchanges.
Because display retargeting can be fairly obvious to the consumer, this is one area where companies must avoid the 'uncanny valley'. This expression refers to the feeling a consumer may get that they are being tracked without their consent.
Research from the London Business School shows that at the beginning of a consumer's interaction with a company online, that company is better to serve generic display ads retargeting the consumer with messaging about a company's overall product selection or services.
This is less overbearing to the consumer than using very personalised messaging based on browsing behaviour, which is better served closer to the purchase decision.
A recent report from Chango estimates that one in five marketers already has a dedicated budget for retargeting (across channels), and over 50% of marketers plan to increase their retargeting budgets in 2014.
For some tips on remarketing effectively, see this interview with Rakuten Marketing's Director of Display, Rakhee Jogia.
Buying audiences with programmatic display
Real-time bidding is the method by which inventory is bought and displayed, personalised for reargeted visitors as described above.
The technology can be used to target generic audiences by demographic, device or geography, not just for users who have browsed a site previously.
Whilst this isn't quite as personal, it still represents targeted display advertising and can be used, for example, to target a range of IP addresses and serve an appropriate ad tailored to a region.
This technology is disrupting the display advertising and media buying industry because no longer do companies 'waste' ad impressions on visitors that may not fit their customer profile.
(The rather complicated RTB ecosystem)
Personalised PPC ads (often called remarketing)
Here I'm talking about search ads personalised with more than just search term, time of search and device type, all possible in AdWords.
Google's product in this area is its remarketing lists for search ads (RLSAs). They've been running since June 2013 and allow you to tailor your keyword bids and ad text for people who have been browsing your site.
So this is just like display retargeting but in AdWords. It's possibly more strategic than display retargeting because of the intent inherent in searching. The RLSAs carry a higher CPC than standard ads, so brands must be careful to retarget searchers they are confident may not have found their site otherwise.
The user may well be searching for a brand and product term already, and so if a company already ranks number one for its brand and product, it may not make sense to retarget these with a paid ad.
Of course, there are many more permutations that would be advantageous to a brand (perhaps if a brand judges a user hasn't found the item they were looking for on a site, and then goes away and searches again on Google).
RLSAs have shown to convert better in many circumstances than standard paid search ads. Used wisely and for the right visitors, RLSAs can decrease CPA.
This is essentially display retargeting but personalised using consumer search data, rather than browsing behaviour. Your search history, when available, is used to serve tailored display ads.
Mobile is not a channel, rather seen as simply a device (as well as tablets) on which, increasingly, consumers look to first when interacting with marketing channels such as social networks and email. However, because of developments in advertising on mobile, I thought it warranted a separate section here.
The important points, and they are discussed nicely in this post on mobile retargeting, are that tracking users across devices (mobile to desktop and vice versa) is still very difficult and therefore mobile ads are most effective within apps.
Google, Facebook and Twitter in particular are companies that know a lot about their users and require users to sign in on their mobile devices.
This allows brands to target users with personalised ads in Facebook, paid search, etc. but could potentially have a much greater implications.
Services like Google Now may be able to use myriad data sources gathered on mobile (where you've been and when, who you've emailed etc) to advertise the right products at the right time. About to go to the shops? Why not buy product X?
There are also some home screen takeover apps growing in popularity, some of them even paying the user to receive advertising messages. These apps (and Facebook's Home is also an attempt at colonising the home screen to better deliver messages) could also be set to shake up personalised advertising on mobile.
Personalisation and social media advertising
Obviously, Facebook knows a lot about its users. It can serve ads to users based on the information they have actively added to Facebook, or based on how users have interacted with content across the web and mobile when signed in to Facebook.
We're all familiar with being advertised dating sites when listed as 'single' or being targeted with engagement rings when listed as 'engaged'.
Further to this, ads in stream can be personalised by featuring additional detail about friends of yours that have interacted with a brand or product. This method is similarly used by Google, which shows a +1 in the SERPs from people in your G+ circles.
They are called 'shared endorsements' and in Google's words 'your friends might see that you rated an album 4 stars on the band’s Google Play page. And the +1 you gave your favorite local bakery could be included in an ad that the bakery runs through Google'.
This is a powerful way to increase clickthrough, in much the same way a rich snippet with an author profile encourages clicking through to an article.
Facebook also has tie-ups with data companies that keep real-world loyalty card data, so there's the potential for users to see Facebook ads differ depending on real life shopping habits.
Personalised video advertising
Personalised pre-roll advertising is an area in which to expect interesting developments. Pre-roll has for a long time been thought of pretty poorly by users, as have display ads of course. The more relvant these ads can be made, the better for the consumer.
Using geotargeting or audience profiling, or again retargeting, video ads can be served personalised to your location, for example. As these video ads are also becoming more interactive, perhaps shoppable, there's room for a very tailored and powerful experience.
Advertisers are even starting to render video dynamically to include details about a user, such as their name within the content of the video.
Although I have my doubts about second screen advertising, it is personalised in the sense that your tablet serves ads (or content) based on what you're watching and on your social activity.
With 40% of peak time tweets associated with TV programming, it's clear there's an appetite around TV. Whether ads take off here remains to be seen.
Although cookies can't be used with smart TVs, the devices can make use of time of day and location to serve targeted ads to consumers.