The Iterative Marketing Podcast Ep. 33: The Role of Data in Modern Advertising

The Iterative Marketing Podcast Ep. 33: The Role of Data in Modern Advertising


Hello Iterative Marketers!
Welcome to the Iterative Marketing Podcast where each week we give
marketers and entrepreneurs actionable ideas, techniques,
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of your fellow Iterative Marketers. Now let’s dive into the show. Hello everyone and welcome to
the Iterative Marketing podcast. I’m your host Steve Robinson and with me as always is the sincere
and refreshingly honest Elizabeth Earin. Hi, Steve, how are you? I am doing well.
How are you doing, today? I am good. Good, good. We are gearing up for
Halloween around our house. I don’t know if you
have got the same. Yes, yes. We haven’t bought a Halloween costume
yet but we have been talking about it and instead of candy, I am
going to be that evil house. I am handing out
Play-Doh this year. That’s better than toothbrushes, right? Yeah. Well, we got a note from
a neighbor saying we have got two kids in the
neighborhood with a nut allergy and if we didn’t mind if we could
have something for them because it’s hard for them when
they go trick-or-treating and I thought, well, who knows
who else is out there and so Costco had
a really great deal for it, so I have got 85 things of Play-Doh and whatever we don’t give out then
my darling son will get to play with. That’s awesome. Well, maybe in our new
house we could do that. In our old house there
was no way we could, we were like the thoroughfare and where we sat in relation
to the rest of the city a lot of folks would come from
lower-income neighborhoods and drop off in our neighborhood, so we would have a crazy just steady
stream of kids coming through and there’s no way we
would have gone through, we used to go through 5, 6, 7
of those giant bags of candy. No, I don’t even think I had
15 trick-or-treaters last year, so we live kind of on that edge of the –
I can’t say the word – rural area, so we don’t get a whole lot. Well, then you have lots
of extra Play-Doh. Um-hmm, yes. So what are we really
talking about today instead of trick-or-treaters
and Play-Doh? Yes, today we are talking about the
role of data in modern advertising. Excellent, excellent. And this is kind of be
a multi-faceted episode, we are going to hit on a
couple of different areas here about how advertising
has really changed as we as marketers and advertisers
have so much more data on our hands, right? Yeah. New technologies have really
given us new ways to use that data and so we see this or we feel
this in three separate areas. The first is targeting and reach, the second is audience aggregation and the third is measurement and for each of these areas we are actually going to talk about
the changes within the industry that we have seen in
the last few years and where this presents an
opportunity for modern marketers either for ourselves or for
working with our clients. Excellent. The first those areas you
mentioned is targeting and reach. I think this is one of the areas that has really changed
in the last several years and continues to change today particularly with the adoption
of programmatic, right? Yes, yes. When you take a look at where
we were just even a few years ago direct to buys were the norm. That’s what everyone was doing. They were calling directly and purchasing
the advertising space that they wanted and the specific publication they wanted and a lot of times the specific
placement that they wanted within that publication. That was the only way that
they could guarantee it and programmatic which has
become more popular today was something that you – if you had a little bit of extra budget
maybe you throw some money there but it wasn’t really something that
was part of your actual strategy. And it really came down to quality because even just a few years ago
if you wanted good inventory, if you wanted to be
on name brand sites, you wanted to be above the fold, you didn’t want to be one of
50 ads on that particular page, you really had to do
those direct buys. So, in addition to the idea of
having guaranteed inventory which has become less important, also having decent placement
really required some direct buys. That really isn’t true anymore, is it? No, it’s not. We have really come
to a point where there are not limitations on
the inventory that’s available for programmatic advertising and so today more and more
of that premium inventory that we could only get through
those direct buys before is now sold on the exchanges and some of them
are private exchanges but even the public ones
are getting better inventory due to the new technologies
that are out there. Yeah. And along with this better inventory
targeting has also improved significantly. So if inventory wasn’t the reason you couldn’t jump on the
programmatic bandwagon, oftentimes it was targeting but we are seeing changes in new
novel ways of targeting media as well. And third-party targeting has gotten
richer and more accurate as well. Yeah and it’s not just
third-party targeting, there’s also second party targeting which has seen a significant growth
in the last couple of years and will continue to grow. That’s where brands aren’t just
beholden to buying audience data from these big companies
that are aggregated like NewStar or BlueKai or some of
the other larger data brokers, but we can also buy data
directly from other brands that maybe they are
aggregating that data as people interact with
their content on their site or from smaller publications or other
publications with niche audiences where they are able to
slice and dice that data directly off of their
subscriber base and so we are able to really
get much richer data than we were able to before
just from what was available from the larger data warehouses. Predictive platforms have also given
us the ability to take advantage of some of that artificial intelligence and target prospects even
before they are in market. So our ability to target has dramatically
changed over the last few years. So when we look at what does
this mean to us as marketers and it means a number
of different things. First of all we have the targeting ability
right now more than ever before and it wasn’t bad before,
now it’s just amazing. So we are not reliant on publishers
to get in front of the audience that we want to get in front of between the different types of targeting
available first-party, third-party plus some stuff that we will
talk about later with CRM targeting and IP targeting. It’s giving us the ability to really
market directly to the individuals that we want to market instead of
having to market through a publication. And we have talked about this before, it’s to the point where this is where that
creepiness factor can sometimes come in where we can kind of
scare people a little bit. So there’s a lot of
opportunities here to target, it’s just a matter of how
much we want to target. Yeah. It’s really less about figuring
out how to reach our audience now to figuring out the best way
to reach our audience and we will get into that
a little bit later as well but the other key thing is while we had pretty
good targeting before we didn’t always have
access to inventory, that’s not true anymore. So if you are still thinking
that programmatic sucks because you can’t
get decent inventory and everything’s below the fold
and remnant inventory, that’s not true anymore. Today you can get the good inventory
and even better targeting. Yeah and actually we have a
great example about this. Do you want to talk about
the experiment that we ran for one of our manufacturing clients? We had acquired a new client and we were working with them on how
they were doing their digital advertising prior to our involvement and the key was really getting some
measurement around what they were doing. We didn’t want to come in and say
you need to change everything, right? We wanted to come in and say, well,
let’s measure what you are doing, right? So, we set up some better measurement
around the direct buys that they were doing and then as well we set up
some programmatic advertising and compared the
performance of the two and we didn’t just compare the
number of clicks they were getting or the cost per click
or the cost per impression, but we also looked at the traffic
data that they got on the other side and we were able to produce
the same quality of traffic but add up to or I think it was around one-tenth
the cost of generating that traffic when we looked at targeting
people programmatically instead of targeting them
with direct buys. Yeah. There is a huge difference
in performance there. So I think if you are not currently using
programmatic or real-time bidding this is a great place
for you to really start and you should look at directing some
of your advertising spend here and SiteScout is a
great place to start. SiteScout has no minimum
to buy or barrier to entry, you have to throw a few
bucks in an account there, and so from that standpoint it’s
a great place to play around, it’s not the best DSP out there but it’s certainly a fine place to
get started and get your feet wet. So where is the second area that we kind of talked about
there being a big change? Yeah. I am calling this
audience aggregation. I don’t know that there’s really
an industry term about this but it comes down to kind of the
next progression in retargeting. If you rewind a few years retargeting was really a tool that was
used by primarily e-commerce companies when they needed to get somebody
back to the site to complete a sale, so I put something in my cart,
I abandon it, let’s get that person back
to finish that sale because they have expressed
some interest in that product for three-quarters of the way there, let’s push them over the line, but that same retargeting technology has
been used very differently in recent years by other brands that
aren’t even e-commerce. So brands like Kraft Foods have really
paved the way to smarter retargeting and we have talked about them before because there’s such a good
example of how to do this right and what they do is they take all of the
data that they get from kraftrecipes.com and they use that to then make sure
that they are getting the right products in front of the right people. And really it’s the convergence of
three different changes in marketing, particularly digital marketing
that have driven this shift and retargeting away from
simply product interest to building up audiences
of people to target and the three changes are first of
all the rising content marketing because if you don’t
have the content then it’s very hard to build an
audience off of first-party data but as we as marketers have adopted and embraced content marketing
that’s become an easy win, right? The second is shifts in technology and this is something that we
are still seeing a wave of and that’s particularly DMP technology
which is your data management platform. Not all brands have
access to these yet because they are still really expensive but I would expect that
to change over time and we are seeing a lot
of activity in this space as Oracle bought BlueKai,
one of the big players in the space and then Salesforce is in the process
of acquiring a DMP called Krux, and so expect to see DMPs becoming
much more mainstream and the technology really enabling
building these first-party audiences and the third one gets around
the problem of marketers that have great CRM systems,
a treasure trove of targeting data but it’s stuck in an
offline manner, right? We can send direct mail,
we can cold-call, we can send emails but how do we get advertising
in front of those people and so we are seeing a rise
in data onboarding services or cookie matching technology that will let you
take that CRM data and apply it to your
advertising stream now so that you can focus on nurturing
an individual audience now using first-party cookie
data or CRM data to get the right message continuously
in front of the right audience. And Facebook and AdRoll
are great examples of this where they allow you to take that
underlying cookie matching technology and then roll that into your own
advertising platform as well. Yeah and we are adding
a third technology in the mix when we are working with
our clients in this as well. So we will help them figure out how
to slice and dice their audience, build up these narrow audiences
that we want to nurture over time and then we will get to them
through first-party data and cookies, we will reach them
through CRM targeting and then we are throwing
a third technology called IP-based targeting
or account-based targeting that allow you to take the physical address
of either a household or a business and then match that up as well. So if you have got a database of
people or households or audiences that you are trying to reach you can mobilize that in so
many different ways today that it’s amazing what’s possible
to take that captive audience and nurture it
and aggregate it and segment it and tie it
towards your objectives. And the IP-based targeting, I think it’s important to know
it’s getting used a lot in B2B and a lot of what you hear when you
read about it is it’s talking about B2B but there are B2C applications as well. There are colleges and universities
out there that are using it. I think we have talked
about this before but they are actually using
it to target households because they know that the person
making the decision about college isn’t always one person, it’s usually a family decision and so they are using IP-based targeting
to go after those potential students. So what does all of this
mean to us as marketers? How does this shift away
from simple retargeting to building and nurturing audiences
impact our work? I think it’s interesting because it gives us the chance to now
combine the idea of an entire tribe with our marketing and advertising. We are building an audience of
like-minded prospects and customers and we now have the ability
to segment this audience using both online and offline data which is something that wasn’t really
available to us even just a few years ago. Yeah, I know that we are
taking this all the way to kind of to the limit in the work
that we are doing with our clients and not only segmenting audiences along
like-mindedness or psychographics and demographics
and things like that but we are also segmenting based on
where they are in their buyers’ journey which signals that we are able to
get both from their online activity and CRM and IP targeting as well. And it allows us just to create an even
better more targeted experience for them because someone who’s interacting
with us in “See” state is very different than someone who’s interacting
with us in “Do” state versus someone who’s
already a loyal customer. The other thing and this is something
that I guess is more future looking– Well, it’s future looking if
you are a large brand because if you are a large brand
you have the budget for it today and you have the ability
to integrate this today but keep an eye out
on the DMP space, that data management platform space. We are seeing mergers
and acquisitions in this space, we are seeing a few big players
that are targeting enterprise, but I expect to see
some smaller players and some more niche players
popping up here shortly that will allow medium-sized businesses
and maybe even small businesses the ability to get into the DMP game and be able to in really smart ways
mix and match their first-party data, the people visiting their
website and their blog with third party or second party data in order to build really richly
segmented audiences online using cookies and device
IDs and stuff like that. We are not there yet unless
you are a big brand in which case definitely dive in but keep an eye on that because I think it’s shortly
around the corner here. In the meantime you do have the opportunity to take
existing retargeting technology and hack it a little bit to build audience
polls tailored to your exact needs and we do that now. If you are smart about it you can take
basically any retargeting platform whether that’s Facebook
has its retargeting, Twitter has its retargeting or any DSP or ad network has
its retargeting tools as well and build smart audiences, not just people who
visited your website or visited this particular product page but who have engaged
in certain behaviors and build a solid pool to go back and
bring those people back to your site for the next thing in the funnel
or the next thing in the pipeline or the next journey state
or whatever you want to call it to keep them nurtured and moving
through where you want them to go. I’d say at a minimum
if you are not tying – some of that cookie
stuff can get hard but if you have got a
database lying around either because you are e-commerce or because you have a CRM system and you are not tying that
back to build an audience, to build a captive audience
and tribe to nurture it, there’s no reason not to do that. It’s as simple as dumping that list
of contacts out of that system and uploading it to a tool like
AdRoll or Facebook and boom, you have
a captive audience that you can now make sure that you
are creating a tailored experience to based on what you know about
them in your database and if you are not doing that today
I’d strongly recommend you start. And then getting into our third
and final point here today. Before we jump into our third point, sorry to cut you off, Elizabeth, I think now would be a great time
for us to take a quick break and go help some people. Before we continue I’d
like to take a quick moment to ask you Iterative Marketers
a small but meaningful favor and ask that you give a
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was sent in by Jeff Kendrick from Missoula, Montana who asks that you make a donation
to The Parenting Place. Since 1981 The Parenting Place
has been providing child abuse prevention services by helping families to develop
healthy parent-child relationships throughout Missoula County. Learn more at theparentingplace.net
or visit the link in the show notes. If you would like to submit
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iterativemarketing.net/podcast and click the Share a Cause button. We love sharing causes that
are important to you. And we are back. So before we left
I cut off Elizabeth but prior to that we talked about
the first two areas where we can – where technology has really changed
the way that data and advertising interact. So the first is that we now have this
open platform of programmatic buying and the data to target the advertising
within the programmatic buying. The second is the idea of aggregating
audiences and nurturing them instead of simply retargeting products and taking that same technology and
using it in smart novel ways there. The third area gets into measurement and if there’s one area that you
see a crazy number of startups and different tools on the market
today gets into this measurement area because we all want more data, We don’t know what we are going
to do with it when we get it but we all want more data, right? Well, we need the data. I mean if we don’t have the data then some of these other things
that we are talking about is just sort of throwing spaghetti
against the wall to see what sticks, it’s the data that helps us put
together sort of that strategic plan where we are spending smartly and Google Analytics has
really helped in this area by opening up a number of
different ways to close the loop and pulling both that online and the
offline sales data back into analytics. I know that they recently announced
an integration with SalesForce. Do you want to talk a
little bit about that? The attribution modeling inside of
these tools has gotten really good as well. When we say attribution modeling we are saying how do we want to
attribute this sale or this opportunity back to the marketing and
advertising that generated it and Google has invested a lot of
time and effort into this in recent years to really bring their
free tool into parity with some really expensive paid tools and in figuring out what’s
working and what’s not. And then they have also
released Data Studio which is another free
tool that they offer that allows you to
mix-and-match data from a variety of different
sources for analysis. So it’s nice because it allows you
to have that one big picture where everything is sort of on
this level playing field. And it’s gorgeous visualizations. I am just starting to
play with it right now and I am excited with the
opportunities that it brings because it’s some really cool BI, it’s not as powerful as some of the
higher priced tools out there but it’s free and so it’s amazing that this is
available to any marketer today. And Google is not the only one
that’s releasing new technology that allows us to acquire, synthesize,
and act on the data that we are seeing. The list of tools that have been
released in the last couple of years is impossible for us
to list everything but you have got
things with A/B testing, you have heat mapping,
data visualization, attribution polls and even more that have popped up
at every imaginable price point. Some are free, some costs money, some are something that only big
brands are going to be able to purchase but no matter where you are
on that price spectrum, wherever your budget lies, you can find different
tools that you can use to help you again make
smarter marketing decisions. And it’s not just acquiring new
tools for measurement but there are tools that many
marketing shops are adopting today for other reasons, particularly things like
marketing automation that are just a treasure trove of
more data that you can use. If you think about the amount of
segmentation data that you have inside of your marketing
automation tool as well as the fact that marketing
automation has an idea where people are in the funnel
and whether they have converted. So now you have got conversion data
on top of segmentation data that you can go back and
apply to your other data to really get a very clear picture of
what’s working, what’s not, where it’s having an impact, etc. So what does this mean
to us as marketers? Well I guess first of all I’d love to
take a deeper dive on this topic. I think that if we were
to give it its justice today this would be an hour
and a half long podcast, so Elizabeth, I would like if possible
for us to come back and revisit this. Specifically in terms of…? Specifically in terms of on the tools
that are available for measurement and how to set those up as well as the tools that are available
for experimentation and polling and learning about your audience
and how to set those up because I don’t think we have
done a deep-dive into the tools. I don’t think we have gotten
that tactical in the past. Yeah and I think that would be a very
useful podcast for our listeners and I am sure they’d appreciate
us not covering it all in one. Yeah But takeaways from this
high-level discussion here I think would be definitely take
a look at what’s possible as far as attribution goes,
Google Analytics, it may be low-hanging
fruit for you to setup and that would really get you quite
a bit ahead in understanding what’s working and what’s not when
it comes to your digital advertising. And then the same thing
would be true for AB testing, if you are not using one of the tools
off-the-shelf right now to do A/B testing for the experience after
somebody gets to your site, you should be – we like convert.com, there’s also Optimizely
and Google Experiments as well which I think they just refreshed
or made some changes to make them easier to use but then there’s also anytime
you are placing ads most of these platforms allow you to easily pit two different
creatives against each other and see which one’s
performing better and so that can be a great opportunity
to generate more data by your audience as well as introduce that continuous
improvement element. So when we combine all three
of these sorts of changes that we have talked
about in today’s episode, I think two things happen. The first is that we find that the best advertisers are
advertising smarter not harder and they are investing in the data and narrowly targeting their
advertising where it works best and I think that
works for all of us because none of us have enough time
to do everything we want to do. If we can be smarter about what we
are doing rather than working harder we can be more efficient. Yeah. And the other thing that we
talked about before we hopped online here and how this changes things is it
complicates digital marketing, right? I should say digital advertising, digital advertising used
to be pretty simple, you find a publication that
aligns with your audience, you place some media and then you go and measure the
number of clicks that come out of it, right? And now we are talking about
this idea of building up audiences or narrowcasting down to very
small segments of our audience and suddenly it becomes
a lot more work and then you throw optimization
and experimentation on top of that and the old models of how
advertising was bought and sold don’t necessarily line up anymore. Do you want to talk about
what that means for brands? Yeah. So if you are a brand working with
a media buyer on a commission model which is how most media
buyers are working, it may be hard to get them
to embrace these changes because as they break the ad buys
down into smaller and smaller targets they are inheriting more work but they are not getting
any more compensation and so getting them to get on board
with this idea might be a little bit hard and you may want to explore
other models with them. Flip side, if you are an agency and you are selling
media-buying to your clients either directly as a media buyer
or as a full-service agency then this is an opportunity for you
to take a look at your models because if you aren’t, you should probably consider
shifting your model away from a commission-based model particularly for digital advertising into either an hourly model
or a pay-for-performance model if your client base
can work that way or a flat fee model, right? So that now you are getting compensated
based on the complexity of your program. There are hybrids of
all of those as well. I think, Elizabeth, you published a great
blog post on the Brilliant Metrics blog that kind of breaks
down those options. Thank you. Yeah, the secrets to making digital media
buy is profitable for your agency and we will link to that
in the show notes. So to sum everything up here – New technology has given us
an unprecedented ability to target just the people
we want to market to and do it at scale
through programmatic because programmatic is now a real
thing and gives us the inventory. Our content marketing
and those new technologies allow us to advertise
to a captive audience, building our tribe
and tailoring the message to be perfect for what that persona
is looking for at that specific state in their customer journey. New technologies give us the ability
and really these are free technologies. Google Analytics is free. So there’s not a whole lot of excuses
not to be at least attempting to do some degree of attribution modeling, some degree of A/B testing in order to really take our
advertising to the next level and get the data out to know what
we can be doing to be improving. And all of this combined represents
a shift in digital advertising. The best advertisers are going to
put more effort into targeting building audiences and
measurement and the results and that’s going to result in lower
media costs and higher returns but a lot more work to do it, so we are going to have to take a look
at the traditional commission fee basis that we have been doing a lot of
the pricing or setting pricing or paying for media on and see what might
be a better option so that we have a mutually
beneficial relationship for both the brand and the agency. Bottom-line, we should be taking all of the
opportunity that this technology and this rich data gives us and we should be
advertising smarter not harder and I want to encourage
everyone in the audience to take a look at what
they are doing right now from a digital advertising standpoint, see where they can apply data
to get more bang for their buck. I want to thank everybody for making
time again for us this week and until next week
onward and upward. If you haven’t already, be sure to
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[email protected] The Iterative Marketing Podcast is
a production of Brilliant Metrics a consultancy helping
brands and agencies rid the world of marketing waste. Our producer is Heather Ohlman with transcription assistance
from Emily Bechtel. Our music is by SeaStock Audio,
Music Production and Sound Design. You can check them out
at seastockaudio.com. We will see you next week. Until then onward and upward!

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