5 Data Points every Advertiser should look at...

Over the past decade, digital advertising has matured from an imprecise practice of* ‘seeing what works’* to a highly targeted system of matching the right audience with the right ad.

Below are** five tips** for using data to build more profitable consumer relationships:

**1. A data management platform (DMP) **offers greater potential than siloed systems like CRM to understanding the consumer information that already exists across the organisation. As it is consolidated into one place it is important to make sense of it and gain new confidence in marketing decisions. DMP can combine online behavioral data, socio-demographic data with offline data to create a single, centralized hub of consumer intelligence. With all offline and online data in one place, questions such as the following can be asked: who are the company’s most valuable consumers, and how do they behave in both the digital and physical worlds?

With a DMP, instant access to actionable feedback provides a solid basis for testing new strategies and new tactics. The data may paint a picture that confirms intuition; empowering marketers to make further refinements. Or the data may be surprising, leading marketers to take a different course of action. Either way, they know that their insights are based on facts, resulting in new marketing confidence and more decisive action.

2. Third party data can be blended with first party in-house and second party publisher data to provide a complete picture of an advertiser’s consumers, answering a wide range of questions about audience attributes and behaviors. In-house information is important, but its value increases dramatically when mixed with audience data from third party providers. With a data management platform, first party data helps to highlight valuable audiences, then third party data can be overlaid to develop an understanding of attributes, behaviors, and content consumption. For example, a DMP can show, from second party data, where visitors engaged or converted, and from third party data helps to illustrate factors such as economics, family position and stage of life.

3. Smart audience segmentation can help to improve marketing performance. Consumer relationships can be enhanced by delivering tailored, consistent messages across all channels.

4. Look-alike modelling is a method of finding audiences who share attributes with an advertiser’s existing consumers or other desired audiences. Understanding of audience segmentation can pave the way for expanding marketing reach. Marketers can use look-a-like modelling, a data management platform to employ third party data to discover audiences with similar attributes as existing consumers, enabling an advertiser to expand its reach effectively. As a DMP finds more compatible segments, the marketer ends up with an audience sizable enough to execute against in digital marketing efforts. Look-a-like modelling works best if the DMP has a large ‘digital footprint’. A platform that has pre-populated more third party data providers will uncover more lookalikes, giving the marketer better, more profitable options when it comes to purchasing media.

When an advertiser executes a look-a-like campaign, where they find new audiences that fit the profile of good consumers, the data management platform can report the data cost as a percentage of cost per impression, enabling the advertiser to see which third party data providers are driving the most value. They can then optimize their next campaign by culling out the data providers that did not perform well. The DMP should show the return on investment (ROI) of the whole campaign, as well as the ROI of each of the smaller segments in the campaign. Some surprising results may occur, like a data provider that yielded a lot of impressions but a low ROI. This information can be used to create better performing audiences for the next campaign.

5. Data-driven actions deliver fact-based insights. At the same time, marketers want to keep an eye on data costs to make sure they’re seeing the results required. When using data to build better consumer relationships, the opportunities for insight are significant. As marketing campaigns are executed, across both online and offline channels, the results can be added to the data ‘story’. Each campaign adds substance to the story and instructions for the next effort, creating an upward spiral of better and better performance. Of course, even under-performing messages or audiences can provide guidance for future
campaigns.

In summary, a more accurate understanding of audience can drive improvements across all campaigns—including TV and print. While marketing intuition will never be obsolete, marketers can also rely on a modern marketing platform to guide strategies and actions.

Reference: IAB Europe Road to Programmatic White Paper July 2015