Marketers have traditionally sought to find the “hand-raisers” who expressed a specific interest and utilized search marketing to connect them to their relevant content. However, over the next year or two, Paid Search will experience a sizeable evolution towards activating against consumer-centric behaviors and insights, existing customer relationships, and utilizing external data in audience targeting. Brands and advertisers should start preparing for these changes now.
What has been traditionally viewed as a “purchase funnel” to move a consumer from Awareness to Consideration to Conversion has evolved into a continual cycle as conversion data can be used to cross/upsell, increase loyalty, and influence future conversions — and will quickly expand to paid search engine marketing.
The focus of quality vs. quantity of ad impressions and site visitors isn’t new to online marketing, as advanced targeting and segmentation in Social, Video and Display are commonplace with today’s third party cookie-based tracking and recent integrations with first party CRM data. While it is common sense that all clicks to a website aren’t created equal, advertisers are currently dependent on the publisher platform’s ability to allow/include external data directly in real-time buying. These platform changes allow advertisers to focus on incrementallity and life-time value of a consumer as opposed to the short-sided last click, online-only, single sale view.
The Basics: Audience-Based Buying vs. Addressable Media
Audience-Based Buying is targeted advertising where advertisements are placed to reach consumers based on various traits such as demographics, psychographics, behavioral variables (such as product purchase history), and firmographics (B2B). Audience-based buys are typically cookie-based and anonymous. The data used for audience-based buying is typically stored in a database referred to as a Data Management Platform (DMP) and can be activated to segment and target media in near real-time.
An advertiser activates against the DMP data to buy ads with publishers, typically with a Demand-Side Platform (DSP). A DSP is a piece of software used to purchase advertising in an automated fashion. DSPs are most often used to buy display, video, mobile and search ads. For some mediums, ads can be bought in real-time through bidding in auctions that occur in the time it takes a webpage to load; this is known as Real-Time Bidding (RTB).
Data that is collected from the brand’s website, email program, CRM/customer database, etc. is called first party data. Additionally, advertisers utilize anonymized consumer data collected in third party cookies placed through advertisements on other sites or purchased. This online data can then be combined with customer data files and even appended with demographic info such as from a credit bureau or subscription service. Data doesn’t have to be limited to consumer data. For example, data on weather trends, gas prices, economic, or product inventory can be incorporated into the bidding and creative strategies. Based on what is known about the targeted consumer, bids can be increased or decreased, messaging can be customized (or sequenced), landing pages adjusted, impressions limited, and more.
For example, if a massive winter storm is approaching a city, the geo-targeted media could change which products would be featured in a home improvement retailer’s advertisements. Further, as snow blowers start to fly off shelves, an advertiser would have rules utilizing product inventory data to avoid advertising products no longer in stock. Alternatively, a sporting goods retailer may see that a certain demographic indexes higher with soccer ball purchases in stores and could target that demo with soccer ball ads online then use POS systems in store to track sales increases.
The next level of targeting beyond Audience-Based Buying is Addressable Media. Addressable Media is a more specific form of targeting utilizing Personally Identifiable Information (PII) where an individual is marketed to on a one-to-one basis. An advertiser matches a publisher ID (typically with a third party intermediary for privacy) to customer PII information such as an email address. Addressable media has gained popularity in the last 6-12 months in display and online video. Though you could go as far as including “Jeff, we saw you purchased a soccer ball last week, would you like to purchase a US Team jersey now?,” we would advise against it due to privacy concerns. In this case, typical advertisers utilize less overt messaging with related products such as cleats or shin guards. Whenever publishers like Facebook or Google require a log-in, the potential for Addressable Media is present.
Audience Targeting and Addressable Search Today
It’s important to remember that Search is already a strong indicator of consumer intent in its native form. Last year’s Enhanced Campaigns and the current move from the siloed product listing ads (PLAs) to a more integrated Google Shopping shows how Google and other search engines value the use of additional data that will drive more relevant advertising.
Search advertisers interested in audience identities have historically utilized research-based tools such as Hitwise or ComScore to identify a group of keywords that over-index in online behaviors. For example, research shows people searching “nursing homes” are typically a much younger demographic than people who would eventually live the facility, likely being a son or daughter of the candidate. This audience information could be used to influence ad copy, landing pages, and even site design/content. While research-based insights are directionally helpful, they haven’t provided the desired granularity of targeting.
While consumer-specific addressable ads and technology are emerging in online video, social and display advertising, Google & Yahoo!/Bing do not currently allow advertisers to use or import external first/third party cookie data or match PII data in their paid search bid auctions. This said, recent progress has been made in audience-based targeting with Google’s Retargeting Lists in Search Ads (RLSAs) and limited engine-specific data provided by the publisher, such as demographics in Yahoo Stream Ads.
Remarketing lists for search ads (RLSA) is a feature that lets you customize your search ads campaign for people who have previously visited your site, and tailor your bids and ads to these visitors when they’re searching on Google. Advanced advertisers have found creative ways to layer additional audience data beyond site engagement to improve and build new target segments. In the current form, RLSAs require a site visit before you can make your search ad ‘targetable’ – but Google has made a strong step forward with the product.
Consumer privacy concerns are likely holding back the search engines from advancement further into addressability. While external data certainly will be required to be anonymized and non-personally identifiable, publishers and search engines must ensure it does not turn off the user base. Additionally, the current RLSA and demographic products do not allow individual targeting as actions are applied to a larger group that has similar qualities (e.g. the group of consumer that have abandoned their full carts with various items would receive the same ad experience versus an individual with a specific t-shirt left in her basket and would see related t-shirt messaging).
Audience Targeted Search Action Items
As mentioned previously, the technology for buying targeted or addressable media in display, video, and social is largely available, and advertisers should continue to test and improve upon Facebook’s Custom Audiences, Twitter’s Tailored Audiences, and Google RLSAs.
- Establish a DMP to begin collecting and structuring data
- Tag your website and Paid Search URLs to begin collecting search data in the DMP
- Explore the Paid Search audience attributes, as well as interactions with other mediums (e.g. attribution)
- Test/understand what targeting and addressable tactics are working in Social, Video, & Display
- Discuss the value of targeting audience attributes in Paid Search; potentially alter KPIs. Start with a small test of 1-2 campaigns/target audiences that are known to be profitable for your business.
- Change your Paid Search bid/creative strategies based on keyword segment attributes. For example, bid up on higher value audiences, as well as potentially eliminate/bid down keywords which aren’t bringing in the desired audience
Through these steps, brands can improve their media mix and targeting in short order, despite paid search not yet being fully targetable or addressable. When the search engines do allow external data in their auctions, the data, target segments, and many of the bid/creative strategies will already be decided upon for immediate testing at a greater scale/depth.
Simply put, data-driven advertisers will provide a more customized and relevant advertisement for consumers. The barriers of establishing a DMP and tagging media/websites should not dissuade a brand from experimenting with targeted media today, and preparing for the inevitable “addressable search” of the future. Through this focus on data, a well-built DMP will be a driver of making search smarter, and also provide insights from search behaviors towards improving and informing other media buys.
It is important to note that search will continue to be a consumer-initiated, pull media vehicle — enhanced with external data or not. While data beyond the query will help improve the value and customer experience, the scale in audience-based buying online will continue to be found in the push-focused display, social, and video ads.
A consumer’s relationship with a brand is non-linear, across devices, and spans multiple on and offline interactions. Tomorrow’s marketers understand that mediums such as paid search must be connected, attributed, and appended to reach consumers in the most efficient and effective way.