Optimizing Ad ROI: Do You Know Your Un-Budgeables?

This post is part of a series, I am writing with friend and colleague Augustine Fou where we approach the same subject from different angles. You can read his take on the topic of advertising to "unbudgeables" here.

WHY? BECAUSE AD SPEND ON UNBUDGEABLES IS A WASTE!

DON'T-ADVERTISE-TO-UNBUDGEABLES

In the last two years there has been a lot of buzz about wasted impressions, and, rightly so. Discounting for bot traffic, only 15% of impressions ever have the possibility to be seen by a real person and even then only 54% of the ads are considered viewable (50% of ad creative remains viewable for atleast 1 sec). This is certainly very troubling in a $60Bn digital advertising industry! While better standards, metrics and bot filters are being developed by those in technology, compliance and project management groups,

How can Marketers make an impact on wastage?

The answer lies in the core of the advertising strategy itself. In defining the business objective around Sales Driven Reach of every ad and therefore set it up for delivery. That is defining the Relevancy of the Audience Segment - those whose opinion can be shifted by serving them the ad.

Consider the perfect burger ad that hits all the emotional triggers of "impulse", "deliciousness", "comfort" etc. that your market/data research has identified and the ad agency has delivered on. Now, let's say I am browsing for a lunch option on my phone and geographically passing by a Shake Shack. Well geo-targeted programmatic delivery will zoom in on me with that pitch-perfect Burger ad and sit back with the satisfaction of job well done. You, the marketer at the burger company is happy that you actually reached human at the micro-time-segment of decision making. All is well.

Except... I am vegan! 

I am an UnBudgeable.

Seen in the context of my lifestyle choices, that is a completely wasted ad impression. No amount of in-moment-pitch-perfect marketing is going to make me budge from my value choices and try a burger; yours or anyone else’s!

Unfortunately, no ad delivery mechanism has a filter for this yet. The DSP cannot know the UnBudgeables for your product or category unless you, the marketer defines them. They can, however, help you find them. Fortunately, this is one level of wastage that marketers can foresee, control and filter out in ad delivery creating higher ROI of ad campaigns even within the context of a deficient ecosystem.

How to identify and segment UNBUDGEABLES

in the context of Ad Relevancy?

An UnBudgeable is a person whose opinion cannot be shifted in favor or your product or brand with any amount of pitch perfect ads served and completely viewed, in any context or delivery channel.

Consumers in these categories mimic your brand's target audience and therefore will be automatically included for ad delivery. However, they are also primed psychologically to ignore and actively disconnect from your ads even in partial frame. The reason for this inflexibility is that the person is already locked in a non-corraborating behavior or a competitor with differential value and switching them is extremely expensive, for you and them.

Such UnBudgeable lock-ins categorize into three distinct groups, as outlined below. I also give you strategies to identify and isolate each type from your ad cohorts.

1. Personal Values

The situation outlined above of targeting a vegan consumer with a meat ad is a perfect example of a Value Lock-In. Targeting a Yamaha ad to a Harley-Davidson enthusiast or an Apple Watch to an artisanal watch (like Ollivier-Saveo) collector falls in the same category. 

The trick is that these are consumers who will probably fall in the demographic and psychographic profile that could potentially fit your product but have overriding intrinsic values that are not always visible in these data. Unless there is an intrinsic shift in basic lifestyle values, this is not a person who can be moved by advertising or peer pressure. The likelihood of a purchase in this category for a non-resonant brand is near zero.

How to Resolve Ad Wastage: Look for Contrarian Search Keywords

The best way to identify this category of UnBudgeable is through Search and Shopper data. For a mainstream brand, these consumers with display negatively correlated and particularly distinct search behavior. Overlapping this data on its own or along with shopping behavior, where available, will provide a list of key words that can be used to filter out this potentially behavior relevant but UnBudgeable segment from ad delivery.

Impacted Categories: Food,  Personal Transport, Watches, Jewelry - Categories with very small niche segments within a mass market category

2. Social Cues

The second category are those who by themselves in isolation may be influenced to buy your brand but are circumstantially not situated to. These are people who have strong social and peer networks that display a through affinity to a competing value category or brand.

Programmatic algorithms are sophisticated enough to not serve a Ford Mustang ad to a mom searching for SUVs. But, what about serving a Toyota ad to a first time buyer? When would that impression be a waste? An example of this a first time car buyer whose immediate circle consists of car owners of BMW, Mercedes and other luxury cars. By deight of personal experience and peer pressure, the likelihood of a Toyota purchase may not be zero but sufficiently unlikely to be a wasted impression. 

Similarly, selling Macy's or Bloomingdale's Jewelry to Harry Winston shopper or Fossil Watches to Patek Phillipe owners would be wasted ads. The trick in this category is that their decisions are group influenced, and, by in-person social interactions/experiences more than online or individual search behavior.

Impacted Categories: Auto, Personal Care, Luxury Apparel, Cosmetics - all where there is a distinct positioning difference between luxury and mass market

How to Resolve Ad Wastage: Look for Patterns in their Social Sharing Data

The way to identify this segment is to look for patterns in their social sharing data. Since this group is strongly socially motivated there is likely to be evidentiary data available as explicit and implicit mentions particularly in image sharing platforms such as Facebook, Instagram etc. In a related vein working directly with these platform data models, such as Facebook IQ, will enable identifying the customers who are likely to be activated by an ad campaign. Once such consumers are identified on a social platform, we can apply a reverse re-targeting approach to filter them out across all other digital platforms.

3. Technical Lock-in

This last category of UnBudgeables are trickiest of all because, their reasons are mostly economic and less behavioral. While their behavior can technically be shifted, it would be very expensive to do so. And, even then it would be in conjunction with {expensive} promotions and not just through advertising. The reason for inflexibility of this consumer is simply that they were already tied-in with a competitors ecosystem of products. So, the switching costs are high. 

The impacted categories here are primarily high value products, where the high value is not of any one product but as a collection of named or unnamed brand products that work with a certain brand and yours is incompatible with that system. 

For example, serving a Canon ad to a Nikon using pro photographer (therefore has multiple Nikon lenses) or a Android wear to iPhone and MacBook owners would fall in this category.

Impacted Categories: Connected Computer and Accessories, Cameras - Ecosystem products

How to Resolve Ad Wastage:  Metadata Analysis

These are also the trickiest category of consumers to capture as their predisposition is hidden within secondary information. This category requires a deeper analysis of metadata information within browsing and sharing history as there is rarely an obvious statement of allegiance. 

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Irrespective of which category of UnBudgeable-ness your audience may fall into, it is important work closely with your agency and set the correct parameters for distribution and measurement. Audiences in different segments should be benchmarked and then followed with how they react to ad exposure. By continuously monitoring who does not respond to your ads and tweaking the delivery, you will realistically converge on lesser ad impressions and narrower targeting to achieve your growth objectives! 

That means the ROI of the marketing department is much higher, winning you a seat in the executive board table and having a strong say in the strategy of the company.

SO, HOW MUCH AD BUDGET ARE YOU WASTING ON UNBUDGEABLES?

WHAT ARE YOU GOING TO DO ABOUT IT?


Asha

Brooklyn, USA