One of the largest names in banking, JPMorgan Chase, got really smart about programmatic advertising last year. They realized that only 3% of websites they were placing ads on were leading to activity beyond impressions. They were spending advertising dollars on roughly 400,000 websites, and right now they’re spending money on just 5,000 websites. Is this impacting their results? No. Their performance did not change at all. You are probably thinking, “What?!” JPMorgan Chase learned what many companies are learning the hard way: “location” online is everything. Something changed when companies started transitioning to digital formats. They stopped paying attention to where ads were placed and focused almost exclusively on audience-based targeting. Now, savvy companies like Chase are realizing there is another, more important, piece to this equation.
Location Is #1
Marketers from years past relied heavily on location when talking about where to place a billboard or a physical store location, but now the majority of these marketers are failing to consider the location online while targeting display – i.e.: what websites they are running their ads on. Are you ever browsing on an automotive blog and see an ad for children’s toys and wonder “why in the world are they targeting me HERE?” MarketingWeek says that only 9% of display ads are viewed for more than one second. This is a CEO’s nightmare, as it screams “wasted money.”
What if your search ads were as irrelevant? You’d probably think Google was broken if you searched for “cell phones” and it showed you a bunch of results for diet food. So why should advertising be any different? CNBC reports that 58% of consumer packaged goods ads, and 51% of shopping and retail ads aren’t reaching the right audience. You wouldn’t see a billboard for a new convertible while driving through Alaska during winter, so why would you want to see something so irrelevant on the websites you’re visiting? And if you’re thinking that you’re getting some traction from those websites, we have some bad news. MediaPost says that 60% of website banner ad clicks are accidental. That means that 60% of people coming to your website from an ad don’t care about your product at all. In fact, 36 percent of ads are “run in places no human will ever have the opportunity to see.”
Put Your Focus On The Right Funnels
You’re likely familiar with marketing funnels, and your marketing team likely spends a large amount of time deciding which funnel to prioritize. But, change your way of traditional thinking, and think of display not just as part of the marketing funnel, but as its own funnel altogether. When done properly, display ads can be used for top-of-funnel awareness and last-click conversions. Thinking about display ads in this way helps marketers understand the larger network effect as it relates to the marketing funnel.
Design location targeting to map to your display funnel – top, middle and bottom. Be pessimistic at the bottom, and even middle, of your funnels, but optimistic at the top. Websites that convert should be moved to your whitelist for bottom and middle. The hard problem is that most of the websites you should be using are outside your scope of view.
How Do We Fix This?
Targeting the right customers online is only half the battle. To achieve the highest return on investment, marketers must go beyond simply knowing who to target. Targeting where customers buy online, plus knowing your target customer, yields massive lifts in revenue.
Location matters far MORE than audience because it represents purchase (or buying) intent. Start by identifying the right location – utilize audience insights, an AI-based customer acquisition platform, and a little bit of common sense. Then, identify the right location. Fueled by AI, leveraging a software platform to help acquire customers will help you better understand the “network effect” and make better decisions with your marketing dollars.
Being smart about where you’re putting your marketing dollars, and having an adaptive marketing plan, is the key to increasing your marketing performance and eliminating wasted spend. Smart marketers understand this and realize that they have to leverage new technologies, specifically AI-based products, to ensure they’re reaching the customers who are most likely to buy. This not only eliminates wasted spend on non-converting ads but allows marketers to find new prospects and grow market share. Quality, rather than quantity, traffic delivers incremental results and leaves sellers and consumers in a much more favorable place.
Also Read: Hitting The Spot with Location Data