Advertisers have such a vast array of choice when it comes to choosing a media platform to promote their brand on. It takes a lot of research and consideration to choose where to best spend their marketing budget. Alex Langshur, CEO at Incubeta US, outlines the top five recommendations that will help advertisers generate returns over the long-term.
With major platforms promoting their black box solutions, alongside a slew of new companies bringing low-cost AI-based tools, many advertisers might think marketing costs will be reduced. The rationale seems straightforward: these tools promise automation, time savings and scalability, all of which should reduce the effort involved in managing marketing campaigns. And with the cost of said tools dropping, adoption should spread – levelling the playing field for brands of all sizes.
But there’s a catch. The majority of a marketer’s toolbox is run on data, and high-quality data has become increasingly difficult to obtain.
We’re at a place where complexity in data collection, data management, performance measurement and channel management has never been higher. While this complexity may be viewed as an indication of the innovation and vibrancy of the sector, it can also be seen as the chaotic outcome of a sector in the throes of fundamental change.
In the face of so much change and such a complex mediascape, where should advertisers focus their efforts and how can they trust that their marketing budgets are being effectively invested?
Make Pmax and Advantage+ work for you, rather than the platform:
Pmax and Advantage+ are powerful assistive tools for advertisers, and our testing has shown that, when deployed in the right way, they can help businesses enhance performance. However, what’s often overlooked is that these algorithms work in the same way regardless of the advertiser, which is problematic when two or more advertisers are seeking to appeal to the same client.
For example, when two market competitors (e.g. Widget-r-us and We-r-widgets) deploy Pmax across their campaigns, it’s essentially the same algorithm, running the same logic for optimisation. When viewed in this way, you can see how this can lead to increasing CPMs as each company tries to get Pmax to work better for them (cost being an important input). Our challenge is to tune these algorithms using different and proprietary signals to make them work harder and better for us, over our competitor, such as by using customer lifetime value as an early input signal. This is hard, complex, time-consuming, un-sexy work, but it’s absolutely critical if we want to succeed in a signal-poor, algorithmic-driven world.
The ‘all you need is first party data’ half-truth:
For years we’ve been told that leveraging first party data is the key to success. The unfortunate truth is that for 95% of brands, their store of this valuable data represents just a tiny fraction (often less than <5%) of their overall market. So even if they knew everything about their customers, it’s a heavy assumption to make that this is representative of the entire category and overreliance on this should be treated with caution.
The case for data enrichment and/or access to third party consented data sources and ID graphs remains pertinent and must be a consideration within the marketer’s toolbox. And when it comes to ID (and device) graphs, scale is really all that matters.
Creative is the best top of funnel signal:
Given that our first party data is too small to fully represent our entire addressable market, we need another mechanism to turn heads, catch attention and expose potential clients to the brand. This is the role that good creative has always excelled at. Strong creative, built on the human truths that resonate with your audience and convinces them to visit your owned digital assets, has never been more important, particularly in our ‘noisy’, distraction-filled and media-fuelled world.
Once a visitor engages across any of your digital assets, you have the ability to start measuring and evaluating their path to purchase. Good creative is therefore a top of funnel signal, and this is incredibly important in helping tune the algorithms to work better for you versus your competitor. It also enables you to start filling in any gaps in your first party data stores.
Of course, to be able to use creative as a top of funnel signal, you have to have diversity in your messaging. If you take a one-size-fits-all approach to creative you won’t learn much, but if you create variants of your creative, you can start to understand what resonates with different audiences.
Leverage bottom of funnel engagement:
With brands losing signal left and right, they need to maximise all of the high-quality signals that they can. Fortunately, logged-in and bottom of funnel experiences offer one of the most valuable and informative sources of consumer data. Robust test-and-learn programs looking deeply at all aspects of Experience Optimisation (EXO) across all assets and channels, as well as more granular Conversion Rate Optimisation (CRO) are one of the most valuable sources of high-quality, high-intent signals available to advertisers. These signals are critical sources of input to the platform algorithms and we strongly recommend all clients to invest in EXO/CRO initiatives.
Value customer data like a balance sheet asset:
I look forward to the day that CFOs in all businesses start to include corporate first party data as a tangible business asset on their balance sheet. Revenue comes from customers, and the ability to understand, segment, create and activate audiences (to include existing and new customers) based on first party data is a critical 21st century business function. To me, this dataset is on the same level of organisational and balance sheet importance as physical assets or intellectual property.
Therefore, it needs to be managed as an asset where the necessary resources are allocated to manage and maximise its value to the business. It’s my opinion that the easiest and quickest way to determine whether an organisation properly values this asset is if it has a Customer Data Platform (CDP) and/or some form of customer data lake. The investment in building a CDP and training staff on its use and maintenance demonstrates a deeper level of understanding the critical and intrinsic properties of proper client data management.
With the effectiveness of marketing campaigns relying much more on strong creative, strategically-wielding AI algorithms (rather than simply letting them take charge) and bottom of the funnel experiences, these five key focus areas are far more applicable and offer a real solution to improving return on investment (ROI) – as opposed to simply hoping that AI tools will solve the issue through automation and time-savings alone.
It’s my belief that these focus areas should be front and centre in the minds of every marketer and advertiser. They will maximise ROI in areas such as MarTech, training and marketing, placing the advertiser in a strategic position to effectively exploit new
technologies and tools, including those backed by AI, as the industry continues to evolve.
By embracing creativity and a human-centric approach, the smart utilisation of first party data and focusing on bottom of funnel engagement, we can gain invaluable insights into consumer behaviour and campaign success – allowing future strategies to be tailored more effectively. The key lies in recognising and treating our data as a critical business asset, innovatively leveraging technology and maintaining a deep understanding of our audiences.