With the advancement of digital innovation in display ad targeting and personalization, it is now possible for advertisers to optimise their display campaigns in real time, based on their internal business data.
Tying advertisers’ own internal data with their display campaigns is a pot of gold that few advertisers have fully tapped.
Here are some best practices for increasing online sales by using information you already have…
We’ve seen first hand how first party data serves as a major success factor in performance display marketing campaigns and we believe this should be an added tool for advertisers in their 2012 campaigns, as it enhances targeting accuracy.
Below are the reasons why and how advertisers should develop their display ad campaigns, including creative and media bids, on first party data.
What is first Party data retargeting?
First party data is information shared by the advertiser with their performance display providers, such as data collected from their website analytics platforms, CRM systems and business analysis tools.
How is this different to third party data?
Third party data, such as behavioural or contextual information, is collected by retargeting providers or other third parties off-site and helps advertisers better understand a potential user’s interest for targeting purposes.
Conversely, first party data is extracted to better target returning customers by leveraging data that the advertiser already has about past purchases and product interest.
How does first party data enhance campaign performance?
While optimising campaigns based on off-site behavioral data is a valuable and effective targeting method, the campaign can be further enhanced by combining third party retargeting with the advertiser’s own segmentations based on first party data.
When targeting is based on third party data only, both existing and potential audiences are approached in the same way. Meanwhile, advertisers’ known and valued customers are falling through the cracks and not effectively targeted to encourage return customers to convert.
This translates into advertisers allotting their budget to CPC or CPM campaigns, paying for banners that are not entirely relevant or accurate, given that current customers are being targeted in the same way as a “blind target”.
In contrast, first party data provides visibility to customers’ previous behavioural patterns that is used to create more personalized, dynamic ads that increase chances for conversion.
For example, advertisers can simultaneously personalise their campaign to different types of existing customers as well as target new customers.
Here’s an example:
Imagine a top tier fashion etailer looking to sell a wide selection of high-margin products such as a cashmere sweater in the men’s clothing section and black boots in the shoe section to an extended and existing customer base.
The target audience for each of these products is significantly different. Traditionally, this etailer would launch a CPM display campaign that is essentially a “blind” campaign with one-message fits all approach for no specific target audience.
The industry performance average for this type of general campaign amounts to a mere 0.1% CTR. Is this the most results oriented campaign this e-tailer can launch?
The answer is no. With the help of first party data retargeting, this etailer could tie its campaign to the company’s business goals and tangible customer information already in its hands.
In turn, the provider would optimise the campaign so that each new potential customer would be exposed to the most effective message and the most relevant high-margin products according to the customer segment they belong to.
Additionally, media bids per impression would also reflect the value of the customer segment of each user and play a role in deciding the cost per conversion.
Our customers who have defined their campaign goal as increasing the percentage of new customers’ sales out of their total sales are seeing over 25% of sales originating from new customers.
Other customers who focused on high margin products have increased these high-margin products’ share from the total conversions of their website.
Bottom line: once your display campaign is optimised on a granular level to reach and convert your target segments, you can be certain that your online ad display spend is truly maximized.
Best practices for your 2012 ad campaign
Define your marketing goals
First party data retargeting is a very catered approach to ad campaigns, which necessitates very catered performance goals. Before embarking on a campaign you should clearly specify the goals you would like to accomplish through the campaign.
For example, are you interested in reaching new users or increasing the revenues of existing customers?
Other elements to consider should include product choice such as whether it would be more effective to push specific product categories whose margins are higher or to target specific customer segments such as business customers amongst your website visitors.
In tandem, review both your current and future goals for expansion as campaigns can support both acquisition and retention goals.
Increase your data volume
Align your marketing goals with your data. For example, In order to be able to target a display campaign for your selected customer or visitor segments, you should be able to identify those segments as they enter your website and in turn, share the information with a trusted partner (such as yours truly).
Consider using a partner to make the most of data
To gain the full value of your data, partner with a provider specializing in campaign optimization that can help you integrate first party data into your campaign goals and strategy.
These partners should help align website data gathered via analytics solutions as well as CRM data for online display campaigns.
Such an alignment should impact the campaign’s creative content, such as products and messaging, which should be tailored to fit the user segment.
When it comes to media buy, each bid per impression should reflect predicted revenue for that impression (based on data on the segment or the product displayed).
As for campaign management, campaign frequency and recency should also reflect the value and preferences of each segment.
Use insights gained from on-going website optimization and DR efforts
A quick way to jumpstart a first-party data retargeting display campaign is to “recycle” effective segmentations and messages previously developed for Direct-Response efforts (such as email marketing).
Track your campaign
Since retargeting campaigns are closely aligned with your internal segmentation and relationship data, it is easier than most display campaigns to gauge the impact and performance of the retargeting campaign on each of the targeted segments.
For example, has the share of sales by the target segment increased from the total sales? Are there additional segments that should be targeted? Did the campaign generate more high-margin or low-margin product sales?
These metrics and conclusions should guide your future first party data retargeting efforts.