At present, US digital ad spend is projected to grow to $46B by 2019. With this growth, many brands and their agencies have already implemented segmentation and programmatic strategies to reach their key audiences. So what about you? Have you developed an approach to identify your high value marketing personas or are you moving at sloth speed?

Ever since omni-channel advertising has been increasingly used as a favored tactic over traditional methods or standalone channels, value segmentation has grown revenues. In fact, by 2021, it’s predicted that multi-channel digital advertising revenue will grow to $30.2B. That’s growth of 2.6%. Traditional TV advertising will grow at only 1.3% over this same period.

Businesses simply can’t afford to be sloth-like!  In advertising, the best practice remains defining the right target from a solid understanding of data – how to harness it and use it. With the explosion and advancements in methods, techniques and tactics, which create effective and efficient targeting of the high life time value customers, we are seeing that many tactics are forward leaning, delivering as promised while shortening time cycles and reducing costly and inefficient spend at the same time.

Data

Using data effectively for your audience activation strategy is key. Many of the biggest companies already employ an approach in which they equate data to potential customers in their own marketing. Back in August 2016, P&G Chief Brand Officer Mark Pritchard rocked the agency world when he said the company was moving away from Facebook advertising and felt they were too narrow in searching for specific consumer groups. Mark went a step further to state that P&G were looking to have a balance of precision and reach with their targeting and programmatic strategy. One key finding was not to rely on retargeting consumer groups but to plan ahead with data and strategy, making campaigns more effective to hit KPIs with less actual time spent on retargeting.

Adoption

Another aspect to consider is the importance of tailoring your programmatic strategy to YOUR audience. If you are Maurice Lacroix selling luxury watches or Louis Vuitton, there is a niche desire for the brands to keep their customer segmentation tighter. You need tools and techniques that allow for this. When building new customer revenues it’s important to get this understanding right.

Sophie Dufouleur, Global Content and Social Media Group Manager at Nestle Nespresso made some interesting comments with her take, “For me, programmatic is looking at the adaption of creative vs the different target audiences in real time. We really try to understand who our audience is…” A people-based segmentation informed by social activity can give you a rich view prior to activation.

Revenue

The sheer number of brands and their agencies using programmatic is undeniable, either fully engaged in advanced digital programmatic buying or simply starting the journey of improving segmentation to inform buying. And key to this is that programmatic is constantly evolving! For the agencies and brands who have their omni-channel strategy in place and are flexible enough to continue evolving, there is great potential revenue to create many winners along the way.

Unfortunately, with this proliferation comes a new level of marketplace confusion that is associated with modern segmentation and programmatic audience activation. Competing marketing products and ad tech tools within the LUMAscape, with more than 1800 vendors at last count, creates distraction and confusion to both new marketers and veteran marketers alike. When looking for audience and activation vendors going forward, utilizing tools to simplify this daunting process will help. Pricing models which contain a single flat fee, pay as you go model, can replace complicated tool plus CPM methods. Keeping costs fixed allows for a flourishing programmatic approach, which makes it easy to leave behind what we know doesn’t work and attribute our targeting spend on the right segments.

Here are three things to consider when activating your audience segmentation on ad platforms.

1) Plan, Plan, Plan

As Stephen Covey states in Habit #2, begin with the end in mind. When a programmatic buy executes with no pre-defined KPIs, how do we justifiably measure changes? How do we course correct a highly-automated activation buying process without first understanding the metrics of success,  such as cost per acquisition (CPA) and cost per click (CPC), or attribution vs other channels vs other potential buying channels? This is where staying focused that the strategy identifies the right channels with the right approach will serve you well. As a veteran of three separate DMP platforms (one organic, two purpose built) I know that competing methodologies and tools confuse marketers throughout this activation and mobilization effort.

2) Is that Really My Segmentation?

Sounds simple enough. Your month-long segmentation study and deep dive into your first party data illuminated some key insights about your most valuable customers. Then you pass this precise segmentation to your DMP or DSP only to have it “genericized” by the limitations of the individual tool. Reminds me of the skit on Saturday Night Live in which regardless of what is ordered, John Belushi simply calls for “cheeseburger, cheeseburger.” Don’t let your hard work land into the hands of a programmatic buyer that is more focused on exercising the trade than perfecting your audience selection through the tool. Better yet, get a tool which drives people based segmentation directly to the audience activation engine of your choice bypassing the DMP or DSP planner all together. If you get the segmentation right and build the customer personas around them, you validate the personas. Suddenly your data can be brought to the fore and you can start measuring the success of your approach.

 

3) Be On the Lookout

With constant change like the growth of mobile or digital video acceleration on all mediums, be cautious of investing in a long-term stack which does not evolve. With many of the pay as you go tools and systems available, your marketing budget can save year on year.  It also goes back to the overall nature of programmatic constantly evolving. Get on board, join a LinkedIn group of your peers, look at the lead companies and their strategy. If P&G, IPG and Nike are constantly shifting their audiences it’s because their programmatic strategy is changing and evolving. You don’t have to be like them but you do have to be prepared to evolve: invest in the customer segments that matter and know who they are.

If you want to discuss further, give feedback or talk sloths: cameron@spotright.com