Procter & Gamble cut more than $100 million from its digital marketing ad spend in the June quarter. Why? Because the ads were “largely ineffective,” meaning they were not contributing to brand equity or sales.
The fact that this huge cut in spending had little impact on P&G’s business is just one example of the amount of wasted marketing spend that plagues balance sheets across retail, consumer packaged goods (CPG) and other sectors, and it’s happening in Fortune 100 companies across the globe. Many of these moves are being initiated to remove the waste caused by “bots” and to protect the integrity of these brands by ensuring their ads are not served on less-than-desirable sites.
However, the most important factor to realize is that even with these significant reductions in ad spend, these companies are seeing “little or no impact” to their business results. The real lesson to be learned here is that there is a colossal amount of waste in digital marketing spend, particularly in the areas of display and remarketing. This waste stems from the fact that marketing teams have forgotten the importance of location when it comes to advertising on the Internet.
In brick-and-mortar retail, everyone knows the importance of location. But why did we think we could abandon this essential marketing factor when we moved our advertising online?
Whether you are trying to drive brand affinity, in-store traffic or online transactions, the importance of reaching online customers at the right place and at the right time is essential for landing your message. If you want to attract new customers, or get existing customers to buy from you vs. the competition, serving your ads to them in the right location (a.k.a. “where they are in buying mode”) is all the more important to driving performance and revenue.
But how can businesses know where to serve their digital ads to reach customers most likely to convert?
Location Is STILL Everything
Most agencies and marketers today focus their advertising strategies on reaching a targeted customer profile or audience segment. While demographic, psychographic and related audience persona characteristics are relevant to determining if a customer is likely to buy, these factors don’t tell you when they are likely to buy or where they are at the time they are most likely to engage or convert.
In order to attract highly qualified, deep-in-the-funnel consumers, brands need to build display strategies on both audience segments and location. This means combining “the where” (location) with “the who” (audience), to supercharge traffic and revenue.
JPMorgan learned this the hard way. After taking a detailed look at its revenue drivers, and manually researching each website where it was spending advertising dollars, it saw that only 3 percent of these websites led to activity beyond an impression. Chase found out that hundreds of thousands of websites where it was spending advertising dollars every month weren’t driving any sales.
The Most Important Thing That Not Enough People Are Talking About
In his most recent Martech research, Scott Brinker identified over 5300 marketing technology tools available to marketers today. Of those, more than 90 percent of the tools are focused on optimizing customer lifetime value (conversion, cross sell, upsell) after a brand has identified a customer or prospect. This means that the vast majority of tools at a marketer’s disposal are only helpful in driving a sale after the brand has had an interaction with a customer. But where can marketers turn for help with attracting new prospects and customers to fill their funnel and replace those lost to competition, unsubscribes and natural attrition?
AI Is Fueling Qualified Traffic
There’s good news for marketing decision makers. New solutions leverage artificial intelligence and advanced math to help brands identify precisely where qualified customers and prospects are two to three steps before they reach your competitors online. This allows brands to find where people are actively engaged and in the “buying mode” — across channels — specifically for the products or services the marketer is trying to promote.
These tools help prioritize your marketing investments across channels so you can focus your time, team and budget on the traffic sources that matter most. It also allows companies to achieve better results, such as higher conversions and higher revenues, because these customers are purchase-ready. What’s more, businesses aren’t the only side that gains from this approach to targeting. Customers will also benefit by way of having a better buying experience because the brand is serving their ads to qualified prospects where they are engaged in relevant purchasing experiences, instead of delivering intrusive ads out of context.
eMarketer said that 13 to 34-year olds were likely to ignore online ads, such as banners and those on social media and search engines. Why? They find them interruptive, annoying, irrelevant. Whether it is general display, remarketing or virtually any form of digital advertising, businesses that reach their audience in the right location at the right time, see considerably higher conversion rates, leading to companies making more money and customers being more satisfied.
Marketing executives for Urban Outfitters said that location data and real-world behaviors are a more reliable way to identify prospects and audiences for larger targeting across channels. This comes after it saw in increase of 75 percent in conversion, resulting in a 146 percent increase in revenue. How did it attain these results? It used offline data to target audiences online — making location their top priority.
Marketers have to stop thinking that larger numbers of impressions will consistently result in more sales. Agencies and publishers compensated on the basis of impressions served can be like school children grading their own papers. In fact, often programmatic agencies and publishers are focused on “fill,” meaning they are incentivized to fill available advertising inventory, whether it is in the best interest of the brand they represent or not.
Instead, savvy marketers will leverage new technologies and artificial intelligence to ensure they are reaching the most highly qualified consumers, when and where those consumers are ready to engage or purchase. In this way, they are not only eliminating wasted marketing spend on non-converting ads, but they are also finding new-to-file prospects and growing market share. Quality traffic delivers incremental results and leaves sellers and consumers in a much better place.
Julie Lyle is chief revenue officer and chief marketing officer at DemandJump, a firm that enables companies to improve their online marketing investments. She also served as the chairman of the board for the Global Retail Marketing Association and was previously chief marketing officer or chief merchant for companies including Walmart, Raytheon, Prudential, Pamida and hhgregg. DemandJump’s Traffic Cloud platform uses artificial intelligence, data science and complex mathematics to analyze a customer’s competitive digital ecosystem. The platform then delivers prioritized action plans of where, how and when to invest marketing dollars in order to drive qualified traffic across channels, resulting in new customers from direct competitors.