Content based on an Opinion Piece co-authored with Gerard Broussard for MediaPost – full article here.
When targetable segments fail to deliver a higher response to advertising, it is tragic…because it is preventable.
The two main causes for segments not performing:
- Lack of Segment Accuracy. The consumers in a segment do not actually possess the purported attribute.
- Lack of behavioral forecasting science. The marketer did not think to test if the segment offered consumers who are predicted to be highly responsive to their advertising.
Here is what a marketer and its agency can do to avoid these pitfalls…
Segment accuracy. We found that there is highly variable accuracy across even “name brand” data aggregators.
For a particular segment, we evaluated five providers and found that the concentration of the desired characteristic varied from an index of 250 (pretty good) down to 75 (bad…actually below the incidence of this characteristic in the general population.)
This difference in accuracy can be translated into hard CPMs…bad segments mean you are overpaying to reach your target.
Recommendation: Determine segment accuracy before committing marketing funds, Research protocols are offered by Jolt!, a service I offer in partnership with Gerard Broussard, Alice K. Sylvester and Jim Spaeth. Please contact me for more information.
Behavioral Forecasting Science. Targeting decisions should be guided by a science of prediction. It surprises many marketers when they learn that it is their BEST customers who are most responsive to advertising. Some think, “won’t my best customers buy my brand anyway?” Actually, no…your heavier buyers…your best customers…are probably buying other brands MORE than they buy of you so there is a surprising amount of upside.
Furthermore, there is hard evidence from experiments that heavier brand buyers, especially those who are probabilistically close to an upcoming category purchase (“recency”) – will exhibit up to16 times the ROAS of the campaign average..
Recommendations: Measure, via Jolt! Protocols, if the consumers in the 3rd party segment have above-average interest in your brand. If not, move on.
Conquesting gone wrong. Let me close with a targeting tragedy I was involved with . An auto marketer, working closely with a broadcast network, wanted to maximize efficient reach against a segment of consumers who drive a particular competing brand of auto. A media plan was created by matching this consumer segment to a leading smart TV panel.
Based on our behavioral forecasting science, we correctly predicted that the lift would be practically nonexistent because interest in the brand was below average.
What could have been done differently? The marketer could have made better media choices if they had also identified which TV shows also attracted consumers with at least moderate purchase interest in the marketer’s brand.
When a segment is constructed to win, everyone wins. When it is unintentionally constructed to be low-performing, the marketer wastes money, and the media partner is told that advertising with them is not working.
Targeting tragedies can be avoided every time, simply by applying the Jolt! principles of accuracy testing and forecasting science.