Alex Song is its CEO and founder Proximaa data science company that helps brands better reach consumers across all major platforms.
As technology advances and the explosion of marketing channels proliferate, marketers have more information, ideas and opportunities to connect with customers than ever before. On the one hand, this has made it easier for marketers to deliver the personalized, connected, cross-channel experiences that modern customers demand. On the other hand, this has magnified the complexity involved.
As the marketing ecosystem continues to evolve, the demand for data and insights will continue to grow. Especially in a difficult economic environment, 94% of traders they already feel more pressure to deliver ROI than before. Meeting rising expectations while navigating new constraints will be essential to success in today’s changing environment. Doing so requires marketers to understand the current state of the marketing ecosystem and what can be done to ensure short- and long-term success.
Will targeted advertising ever be the same?
One particular area under the marketing microscope is targeted advertising. Since iOS privacy is changing, social media platforms are not as effective at finding the right audience. Targeted marketing was once the key to personalization, increased brand awareness and higher engagement, especially through social media channels. But now, consumer privacy rules threaten to destroy targeted advertising.
For example, as a result of changes to iOS, Facebook says it will lose $10 billion in revenue this year. There are some who predict that this is the end of targeted advertising.
Targeted advertising has gotten a bad rap. It serves a purpose, and that purpose need not conflict with consumer privacy. It’s important to note the value of targeted ads: Not only do they offer products and services to consumers that meet their specific needs, but they also help with acquisition costs, which ultimately affect the final price for the consumer.
So what can brands do to manage the changing face of ad targeting and still deliver great customer experiences and brand success?
Experiment with new platforms.
TikTok is having a moment right now and it can feel like the Wild West. But the reason for this is that there is incredibly high audience loyalty and some extremely low customer acquisition costs. A definitive playbook for success has yet to be written, but those willing to experiment with the platform reap huge rewards by jumping in early. As this ecosystem matures, acquisition costs will increase and stabilize. Meanwhile, for digital businesses that have a strong creative content strategy, optimized conversion funnels and effective growth marketing capabilities, there are huge opportunities to take advantage of.
Marketing leaders need to hustle hard and experiment with multiple strategies across multiple channels in order to maximize return on ad spend. This volatility is better for entrepreneurs because the uncertainty creates a more competitive environment—one where everyone is committed to incrementally earning advertising dollars rather than comfortably protecting a huge market lead.
Start with your first-party data.
First-party data is valuable because it is collected directly from the consumer and is data owned by the brand. However, in today’s environment, first-party data is still difficult to obtain and may only offer limited scale depending on the size of your business. Additionally, it only provides brands with insights into current audiences, not those who are yet to engage. However, scaling first-party data should be your priority because, with enough volume, this data set can reduce ad costs and improve your returns on targeted ads.
Look for second-party data.
Second-party data, obtained through brand partnerships with consumer consent, cuts out the middleman and can be a good source of high-quality and accurate data. Because consumers have opted in, this type of data has not been affected by the iOS privacy changes. Using second-party data can give you insight into current and potential consumers while adding transparency to the process.
Leverage third-party data and AI.
Third party data providers are becoming more sophisticated and can now optimize their data sets with artificial intelligence and data science. This helps them learn and iterate as they go, which proves to be an effective way to find new audiences while protecting consumer privacy. Third-party data, combined with machine learning and artificial intelligence, are paving the way for the future of targeted advertising.
If marketers have learned anything recently, it’s that the only constant is change. As the marketing ecosystem continues to evolve and the rules around targeted advertising continue to change, today’s leaders must remain nimble. Those who aren’t afraid to try new audience targeting methods will be in a much better position to deliver the high-quality experiences customers want and achieve the ROI brands need to thrive.