At Risk of Becoming Your Industry's Blockbuster Video?

Your customers and prospects are addressable today, but chances are your advertising and marketing aren’t.

Here’s the good news; your customers and prospects are fully addressable today. Which means you can stop relying on guesswork and proxies (e.g., adults 25 to 34) for targeting your advertising.

But here’s the bad news; marketers are missing the massive shift in consumer viewership patterns and technological advances in identity resolution powering the new world of addressability. This means the bulk of advertising dollars are spent inefficiently, dragged down by decades-old approaches to media planning and buying.

Also Read: In People-Based Marketing, When is “Good” Good Enough?

What is an addressable consumer?

When the words “addressable” and “advertising” are mentioned in the same sentence, many think the conversation is about addressable television. Make no mistake; the addressable consumer is about much more than addressable television.

Between the rapid shift in media consumption habits and the technological advances made possible by new device proliferation, it’s now possible to reach specific individuals or households with your message. And you can measure campaign performance based on offline actions taken by the target audience, such as making an in-store purchase.

For decades, marketers targeting consumers most likely to purchase a particular product employed a demographic proxy (e.g., adults 25 to 34), and hoping they reach likely buyers.

In today’s world of addressable consumers, marketers can use past purchase data to target just people with an actual history of buying a specific product (say a premium orange juice), whether theirs or a competitive brand. Which method is likely to waste more impressions on people who will never buy premium orange juice?

Before addressable consumers and marketing, advertisers were clueless to who actually saw the ad. This forced them to measure campaign success using ratings to estimate how many people in the targeted demographic actually saw an ad. But in today’s world of addressable consumers, advertisers can map ad impressions to specific people and then use transaction data—whether from POS systems, frequent shopper data or online form completions—to measure campaign effectiveness, calculating a precise return on advertising.

If it’s so obvious what’s now possible, why are so many marketers and media buyers still buying demographic audiences and measuring campaigns based on ratings points? There are myriad reasons, including relying on tried and true methods, regardless how flawed they are in reality; to being easier to buy all media the same way, even if it’s reducing effectiveness to the least common denominator.

I think the problem is many marketers haven’t fully comprehended how rapidly consumers have shifted media consumption habits, nor how much technology has advanced. Television advertising has always been king, for many legitimate reasons, including the brand impact a 30-second television spot can have vs. a static banner ad.

Nevertheless, consumers have transitioned to “Me TV” where the consumer is in control of when and where they watch TV. eMarketer estimates more than 68 million US households don’t subscribe to any traditional TV service (e.g., cable, satellite).

If your media planning and buying remains anchored in linear television, and not where the consumers can be found today—connected televisions and mobile devices—you risk focusing the bulk of media dollars on a fraction of potential buyers. Eventually, poor sales results will expose the problem. Or marketers can instead choose to embrace the addressable consumer.

Also Read: The Yin + Yang of Precision Advertising in Advanced TV

What do you need to know about marketing to the addressable consumer?

If you want to leverage the addressable consumer in your marketing efforts, here’s what you need to know:

1. It’s not just about television. We often focus conversations on consumers streaming television shows on connected TVs and addressable cable boxes, while the majority of media consumption is actually happening on mobile devices. This is thanks to their ubiquity and convenience—and not just television shows. Mobile is where consumers check the news and weather, shop, research, play games and communicate with their social networks. And the good news is that Mobile Ad ID’s are much better identifiers than cookies, are far more persistent, and go everywhere the person does. You can reach addressable consumers across all of their screens and all media consumption, in addition to reaching them when they are watching OTT.

2. It is all about the consumer’s address. The greatest challenge the addressable consumer presents is mapping their various connected devices to the consumer. Many methods and match keys are being employed, including cookies, email addresses and IP address.

But, in the end, the key to reaching the addressable consumer is knowing their address: their home address.

The simple reality here is other identifiers are fraught with problems, including lack of persistency; multiple identifiers mapping to the same consumer; and ID’s that often change.

Knowing the home address of those devices provides a consumer’s most persistent, and least-often-changing identifier. And more importantly, it’s also what maps consumers to other data known about them, including credit cards, property records, census data, accounts, auto registration, etc.

If you’ve tethered together your customers using an email address, you’ll likely find more than half of those records fail to map to data — severely limiting your ability to employ addressable marketing across your customer file.

Also Read: What Is an Ad Network? Definition, Types, and Examples

3. Ask the Right Questions.  Because it’s such a challenge to map people and their devices in the “no cookies” world of mobile and advanced television, you must invest the effort to understand identity resolution. This includes understanding the different methods currently used, and asking the right questions about the programmatic platforms and other solutions your company uses to deliver digital campaigns...

Why does it matter? Many programmatic solutions were built for a desktop world, where cookies reign supreme. And if you don’t understand the identity graph underlying your ad delivery systems, you may not be actually reaching the people you are working so hard to target.

In one recent test of a leading programmatic ad platform, campaign performance was 2.5 times better when the same target audience was onboarded with an identity platform mapping people and devices to a home address vs. the same file onboarded by the programmatic platform.

Also Read: Ad Targeting and Measurement: The High Cost of Waiting for Perfection

In that same test, the standard targeting sets (to reach the same audience) underperformed the identity platform by a multiple of 5X.

How is this possible? In the end, it’s likely different audiences were being reached, because the identity platform powering the programmatic platform was relying on other identifiers, such as cookies and email addresses.

So, just imagine the impact on your campaign’s performance if you were reaching the right people, the people most likely to buy your products or services, and campaign performance increased 500%? The only way to know for sure is to ask the right questions and understand the identity graph powering your campaign delivery.

4. You’re behind if you’re still testing. It’s surprising how many large consumer marketers still allocate paltry amounts of their media budget to test addressable channels. Linear TV and even programmatic digital media still get the lion’s share of the budget because agencies know how to plan and buy it, and it’s easy to reconcile consistently. But consumers have gone the other way—with the vast majority of their media consumption targetable at an address level, and measurable based on real-world results. This gap suggests consumers are moving much faster than marketers.

We’re beyond a point where only testing makes sense; if you want to keep pace with your consumers, it’s time to embrace the addressable consumer. Agile marketers going all-in on this approach are already racing ahead of their competitors. They’re reaching more consumers with more targeted messages, dramatically reducing wasted media impressions on people unlikely to buy, and knowing their true ROI.

Those that resist the shift— holding onto the notion that the anonymous advertising works fine — may find themselves in the position of Blockbuster Video when they failed to recognize rapidly shifting video consumption. By the time they responded and introduced a streaming video service, it was too little too late. Who wants to be the Blockbuster of their industry?