Targeted Marketing: Are We Entering a Golden Age?

Stephen DeAngelis

March 16, 2016

A few years ago, Barry Schaeffer, Principal consultant with Content Life-cycle Consulting, wrote, “In times past, you targeted your marketing and sales by placing your name (ads, posters, Burma Shave road signs … whatever) where you thought your prospective customers might show up — fishing ads in the sports section, theater listings in the entertainment section, luxury car ads in coffee table magazines, and so on.”[1] As we all know, traditional advertising has declined dramatically over the past few decades. “Marketing, Schaeffer explained, “is fast becoming digital.” This digital age transition means a lot more than just moving ads from newspapers, roadsides, and television shows to emails and the Internet. Today’s savvy consumers are looking for ads that inform more than sell. That’s why targeted marketing is increasingly referred to as content marketing. About the same time Schaeffer was making his observations (2014), Tom Murphy (@TomMurphyBA) was reporting that marketers were struggling to master content marketing. “A lot of marketers,” he noted, “seem frustrated by lackluster results.”[2] In fact, a survey found 54 percent of participating marketers were dismayed with their content marketing efforts.

Moving from the sending side to the receiving end, a survey of consumers conducted around the same time period found over 75 percent of participants believed mobile ads were an invasion of privacy and about the same number were really irritated when they saw the same ad pop up more than once.[3] Ouch! With both marketers and consumers unhappy with targeted advertising, you might be surprised that some people, like Steve Sachs, CEO of OneSpot, were telling people we are entering the golden age of digital advertising.[4] “If it seems at times that the digital ad industry is evolving slowly in the face of pressures from both brands and consumers,” he wrote, “think about this: It’s probably been a while since you’ve seen a cymbal-banging monkey toy. You know the one — Once wound up, the grinning monkey would bang its cymbals as if to say ‘Look at me, I’m interesting because I’m making noise!’ Though entertaining for its era, a repetitive, one-dimensional routine just doesn’t work for a modern audience. The monkey needs to evolve.” He continued:

“So many less-than-ideal elements of digital ads that we once thought of as iconic and archetypal have fallen away in the past decade. Once users were flooded with annoying, irrelevant junk ads, and brands bemoaned the small size and technical limitations of display units. Now consumers talk about how uncannily targeted ads are to their needs, and a new world of storytelling experiences is available in digital to brands. The experience for the consumer has improved immeasurably, and so have the results for brands. We’ve only begun to scratch the surface in the kind of deep, relevant storytelling possible in digital. But as we progress, some things are necessarily going to go the way of the monkey toy.”

Sachs doesn’t believe that targeted marketing will disappear; but, he does believe it will change. “By 2025,” he predicts, “we’ll have seen the death of annoying, irrelevant ads.” We have already started to see one major change in advertising — the rise of native ads. Native ads are advertising primarily filled with informative content rather sales pitches. This type of advertising is particularly appealing to Millennials.[5] Relevant content published on reputable sites attracts these digital natives — who almost exclusively use digital technology to become informed. Boston Consulting Group analysts observe, “Digital advertising can engage with and benefit consumers by delivering highly relevant content in real time, but many advertisers and agencies fail to fully realize this potential.”[6] One reason they fail to realize content marketing’s full potential is because relevant content is not always easy to create. David Kirkpatrick (@davidkonline) reports that creating highly relevant content remains a serious challenge for most marketers. “Ascend2’s latest research, Lead Nurturing Trends,” he writes, “found that 59% of surveyed marketers reported creating relevant content was the most challenging obstacle to lead nurturing success.”[7] If advertising is going to enter the golden age of targeted marketing, learning to generate relevant content is essential.

Not everybody believes that content is going to be king in the golden age of targeted marketing. Augie Ray (@augieray), a Research Director at Gartner, insists, “Content is not king. It is important — vital, in fact — but it is not king.”[8] He explains:

“A new study from TrackMaven demonstrates that while brands continue to pursue greater content production strategies, they are getting less engagement for their effort. This is an outcome that a simple supply-and-demand analysis could have predicted, and it demonstrates once again why customer experience is the real king.”

Ray is highlighting a conundrum facing all marketers. We know consumers prefer content marketing to “in your face” advertising; but, providing them content in an acceptable way remains a challenge. In trying to bolster his claim that “content is not king,” Ray points to Web 1.0 companies, like Google, Ebay and Amazon, and notes that they succeeded by providing a good customer experience not by generating content. I find that argument a bit misleading. Each of those companies has succeeded because consumers found the content they provided to be relevant. I agree the companies don’t generate the content, they just offer it up. Without the content, however, they would have failed. In other words, there is a strong symbiotic relationship between content and experience. Perhaps they should be called the king and queen of marketing rather than trying to crown one as sole sovereign of the advertising realm. Ray explains his position this way:

“Even without examining data, it should be apparent why customer experience has a stronger claim to the throne than does content. Content can attract attention but it cannot hold loyalty. You do not stay loyal to brands that produce the best content but the brands that provide the best customer experience at the right price. … In the consumer half of your brain, the idea that customer experience is more important than content seems pretty obvious, but the marketer half of our brains clings to the belief that content is the ruler. … In recent years, the growth of social media and access to low-cost online publishing and distribution tools has led to the belief that brands are publishers. While some brands have opportunities to publish content that reaches a critical mass and produces marketing returns, most brands struggle to realize the promise of their content marketing strategies. The reason is best explained not in marketing terms but economic ones using the law of supply and demand. What happens when the supply of something rises but demand does not? The price drops. Over the last decade, the supply of content has exploded. … Consumers today have countless content options. … While the supply of content has risen, what has happened to the demand for it? Consumers may be multitasking more, but they still have just two ears, two eyes and so many hours in the day to consume media. Media consumption has risen, but nowhere near the pace of media production. … Content distributed via blogs, Facebook, Instagram, Pinterest, and Twitter may be free to consumers, but people pay a price for this content with their attention and engagement. … The way to overcome content challenges is to give people the right customer experience that encourages them to create content and spread the word for you.”

The fact that pundits are still arguing about the best marketing methods to use in the digital age tells me that we are not yet in the golden age of targeted marketing. We will achieve that goal when the right balance is struck between what is offered by sellers and what is welcomed by consumers. Most analysts agree that big data analytics and cognitive computing are going to play a central role in helping marketers understand what consumers really want as well as informing them when the best time to offer it to them occurs. Sachs predicted it may take a decade for that to happen and I suspect he may be correct.

Footnotes
[1] Barry Schaeffer, “Signs Along the Road to Digital Marketing,” CMS Wire, 24 June 2014.
[2] Tom Murphy, “Survey Finds Gap in Targeting for Marketing Content,” CMS Wire, 30 July 2014.
[3] Patrick MacGougan, “New Research Says 77% of Mobile Users see Targeted Ads as Invasion of Privacy,” Go-Mash Mobile, 1 July 2014.
[4] Steve Sachs, “The Digital Ad Industry in 10 Years: Here Comes the Golden Age,” Wired Innovation Insights, 15 July 2014.
[5] Tyler Loechner, “Younger Affluent Audiences Open To Native Ads, Report Finds,” Real-Time Daily, 13 October 2014.
[6] Paul Zwillenberg, Dominic Field, Mark Kistulinec, Neal Rich, Kristi Rogers, and Samuel Cohen, “Improving Engagement and Performance in Digital Advertising,”bcg.perspectives, 16 September 2014.
[7] David Kirkpatrick, “Creating relevant content is the main obstacle to success: Study,”Marketing Dive, 14 December 2015.
[8] Augie Ray, “Content Isn’t King–Customer Experience Is,” Gartner for Marketing Leaders, 13 February 2016.