Member Article

Latest Data from Analytic Partners shows marketers’ shift to narrow targeting could be a waste

In 2021, 75% of all sales driven by marketing investments were sourced from channels with the potential for narrow targeting (e.g., Social, Display, Online Video) - up from just 55% five years ago.

And yet, contextual targeting (buying ad space based on the relevance of a website’s content to your product) is today revealed as being 1.2x to 2.5x more effective than other forms of targeting when costs are comparable.

The finding is in the latest Analytic Partners ROI Genome Report which recommends that marketers:

• Should not focus on the customer segments that are most likely to convert, instead focus on the customer segments that actually deliver the highest short- and long-term value.
• Prioritise broad reach for upper funnel tactics (e.g., TV, PR, OLV) and prospecting (e.g., paid social)
• Prioritise contextual targeting for digital tactics that leverage third party user profiles (e.g., display) or are contextual by design (e.g., DOOH, affiliates)
• Prioritise more narrow targeting for tactics using first party data (e.g., CRM, loyalty, email) and accurate second party data (e.g., paid social)

By immediately leveraging these learnings and optimising media spend, marketers can actually increase ROI by 30%.

Kevin O’Farrell, Senior Vice President at Analytic Partners, said: “Despite the huge shift of spend towards narrow targeting, we can show that it has not lived up to its promise for most brands. “This is in part due to a murky pool of data vendors, mystical algorithms and sub-optimal execution. Add to this, device sharing, walled gardens, and the crumbling of the cookie, and the accuracy of targeting with third-party data is becoming more and more questionable. Increasing consumer privacy concerns are also creating a ripple effect: people are more protective of their personal data now than any time in recent memory, leaving large gaps in data and capabilities.

“While there is a time and place for most types of targeting depending on the industry and strategy, to make targeting work for your business, the right balance needs to be achieved with both broad and narrow techniques and due prominence to contextual targeting within a considered holistic approach.”

The latest ROI Genome Report, Targeting Works, Except When It Doesn’t, is available to download for free now.

This was posted in Bdaily's Members' News section by Business News .