Personalised Ads aren’t actually Complicated

So, after spending a Boxing Day doing things that are very traditional for Boxing Day and mostly involve getting cold and wet along with a large group of other people (followed by lots of food) I’ve decided to put together a quick post on a feature of digital marketing that doesn’t often get talked about.

Recently whilst browsing Twitter, I spotted some comments that stuck in my mind (though frustratingly not well enough for me to remember who said them and exactly when/where I saw them) and the basic gist was this – people are very worried about the amount of data that advertisers have on them, and how they are able to turn this into ads that exactly appeal to their needs. The concept of ads that push some kind of specific psychological buttons is pretty deep-seated in the public consciousness now – as the script for the already infamous Brexit trailer shows.

To tell you the truth, as someone working in marketing this worried me a little too at times, because it made me feel like I was floundering in the dark when it came to audience segmentation. I would read articles like this one and think, ‘yes, but I already segment the audience based on location, age, gender, interests, job type etc. etc. etc. – what else am I missing?’ Which is where the next part of that original Twitter comment came in – which was about how many people see an ad, and actually care about it.

Digital advertising, just like newspaper ads and leaflets and massive roadside billboards and stickers on lampposts and just about every other form of advertising that exists, only ever gets the attention (and subsequent sales/sign ups, whatever is being pushed) of a tiny fraction of the people who see it.

A 1% return on leaflets would be considered pretty good (and this is pretty hard to track, even with promo codes or surveys. Clickthrough rates on digital ads isn’t much higher – 3-4% would be good – imagine your ad is seen by 50,000 people. That means 1500 actually clicked through and looked at your website, and hopefully from there actually decided to buy something, or at least signed up on your mailing list so you can send them tempting offers in the future. Maybe a 10th of those 1500 looked through your collection of, let’s say, personalised ethically sourced jewellery and because a few of them bought quite a bit you’ve got an average spend of £20, you have £3000 worth of sales. If your ad cost you around £400, you’ve got a pretty good return on investment there for not a lot of work.

However, that also means 48,500 saw your ad on their screen, scrolled past it, and then probably forgot all about it, just as they probably couldn’t tell you what ads they saw on the front page of the Metro on the train last week. So, exactly how personalised are these ads?

So, you get political ads on Facebook and (unless you have clearly expressed support for a particular political party) if you’re a young person they’re probably left-wing ads and if you’re older they’re probably right-wing, because that’s simply the general trend. But if you got a timeline advert from the Labour party and you’re not at all interested in voting Labour, you’ll probably ignore it. It becomes part of the background noise of social media and/or the internet in general, just vague words and pictures in between more interesting content.

This means that really, marketeers, strategists and consultants don’t know anywhere near as much about you as you might think, but they’ve got enough data to make educated and profitable guesses (and I’m sure they’d like to think that they’ve got more then that, so that companies will employ them on large salaries to tell them how to make more money). In the end, marketing has got slightly more directed and personalised in recent years, but only slightly, and based on the exact same methods and data that marketing has always used. It’s only the medium that is truly different.

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