Posted 15th July 2015 by APSIS

Display Advertising Has Moved On… When Will Brands Catch Up?

I bought a toilet last week.
I have never bought a toilet before, and I doubt I will buy too many more throughout the rest of my life. So why am I now seeing advert after advert for toilets, specifically from the company I purchased from in the first place? Worse still: Why am I being shown the same toilet as the one I bought?
How many of this particular toilet does the brand’s average customer buy in a week? How big do they think my new bathroom is going to be?!
It’s not just toilets. Shoes, barbecues, TVs… you name it. I don’t tend to mind as much if I am yet to purchase the item displayed (I understand the whole ‘front of mind’ thing, even if it is a little spammy in practice), or if the items displayed are different (or even complementary) to the one I bought. But why offer me the same item immediately after I have bought it?
Imagine if that happened to you in a shop: You buy a pair of jeans, the checkout assistant bags it for you, takes payment and wishes you a nice day. She then chases you down the street to tell you about the same pair of jeans! That would just be weird… and unacceptable. Sure, you would remember the shop (that ‘front of mind’ thing again), but not favourably, and the intrusive, ignorant buying experience would likely be detrimental to the prospect of any repeat custom.
So if this idea is so ridiculous, why is nearly every retailer failing to address it in the context of display advertising?
Defining the Customer Experience
At Innometrics we have spoken at length about Customer Experience, and have recently commissioned a report carried out by Digital Doughnut that closely examines Customer Experience as the Next Strategic Business Imperative. When we were presenting the findings last week, a fellow presenter concluded his presentation with the words “don’t show me ads for items I have already bought”. It still sounds obvious even now.
So if customer experience is indeed the next strategic imperative, why are brands seemingly content to jeopardise it through display? Three factors spring to mind:
The flaws of CPM
Display Advertising is run on a CPM model, so the campaign executioners are focused on the C and the M. But the model doesn’t account for to whom the ads are served. “We served 100,000 impressions. Conversions from click-throughs went up. Job done.” CPM shows how much and how many, but not who, resulting in a lack of control of where ads are directed.
Display is for acquisition, no?
The strategic imperative of display advertising seems exclusively focused on getting me (and others) to buy that toilet, or pair of shoes, or TV. The myopia of this initiative is clear – once I convert, the brand is already targeting the next customer. It is a strategy focused and measured on acquisition (and, by definition, conversion).
Why not offer related products instead? And not just related to the product, but related to other characteristics? Some jeans to go with the casual shoes? A nice sink, since I am likely to be renovating a bathroom…?
It’s too hard!
The other possible explanation is that it’s simply too difficult for brands to identify and segment out those to whom the ad should not be served (such as previous buyers). With the right technology joining transactional data to CRM and browsing data this can be readily achieved, and may even save the advertiser considerable advertising budget.
Think about segments that can be created if you go one step further to incorporate lifetime value. If a high-LTV customer has dropped off the buying process, surely it is worth trying to entice that customer back through display? So why not prioritise budget to that segment and suppress the previous buyer segment? Regardless of budget, that approach would surely make more sense?
This can be hard, but it is possible.
Display advertising done right could be very powerful, and if Customer Experience is the Next Strategic Business Imperative, industry practices across this channel desperately need to be improved. If only more brands would cotton on sooner…
This post was written by Martin Wallace.