Why the Personalization “Hype Cycle” Is Over
Any marketing and advertising professional knows that personalization is an essential part of any digital advertising strategy. Targeted, relevant marketing performs better. But after two decades of relentless progress, personalization is reaching its high-water mark. As deeper efforts yield declining returns, advertisers seeking to maximize effectiveness should balance their investments in data-driven targeting with a greater focus on creativity and storytelling.
The Ins and Outs of Microtargeting
The returns on investment in deeper personalization decline as they get more granular. As segments get ever more targeted, it becomes harder to find enough targets for each deeply personalized ad. What’s more, costs increase even as returns diminish, as creating a higher volume of micro-targeted ads means marketers need to generate more creative and more copy. Oftentimes, it costs more to reach these highly specialized, niche groups.
As Facebook and Google tighten their chokehold on digital advertising, all but the largest advertisers will see more success if they leave targeting up to the digital ad duopoly. They have the ability and capacity to collect more data and employ more sophisticated machine learning than your average digital marketer, meaning they can execute successful microtargeting without placing the burden of personalization on marketing and advertising teams. This frees up time to focus on more high-value initiatives, like creating interesting narrative ads that appeal to a wider demographic.
Consumer Data – How Much Is Too Much?
Over-personalization also hurts consumers’ opinions of a brand – many are starting to find personalized ads “creepy” or feel that advertisers are spying on them. Personally, I’m haunted by ads for Hawaiian shirts because I bought one online three years ago. These “zombie ads” follow you around for years, refusing to die!
Even worse are ads for something you’re interested in, but haven’t yet searched – you might call this a “surveillance ad.” These spark suspicion that Siri or Alexa overheard you talking about buying something, and somehow passed that information along to advertisers. In reality, these ads pop up because major advertising platforms target household data. While it might sound effective to target consumers with ads that data can prove will be relevant, such ads clearly turn consumers off, sometimes to the point of calling out egregious examples on social media.
Consumer pushback is also being expressed through new regulation, such as GDPR and CCPA, designed to protect consumers’ data and how it’s used. These laws make it increasingly difficult to collect and store consumer data, further proving that the value of personalization has reached its peak. If the amount of data that can be analyzed for advertising purposes is declining, marketers and advertisers simply won’t be able to access incredibly granular information anymore.
Similarly, Google has ended support for third-party cookies, meaning ad tech providers will be getting even less information. This is far reaching and significant. All of this makes the creation of personalized, targeted ads more difficult. Ultimately, the shiny new data that once allowed advertisers to make more informed, creative choices has transformed into a desire to use all of that data, all the time – we’ve lost the creative heart of what advertising once was.
Rediscovering the Impact of Creative
Instead of getting wrapped up in drilling down into highly segmented data for targeting, it’s on marketers and advertisers to look for new ways to engage consumers. The impact of creativity on purchasing decisions has always been high – Nielsen says that 47% of ad effectiveness comes from creativity. Marketers got a bit too starstruck by the wealth of data that digitalization created, as it finally allowed them to prove return on investment. While we can still recognize and appreciate how data has allowed ads to reach a more relevant audience, we need to rediscover the creativity that makes up half of successful digital ads.
As marketers and advertisers look to strike a more even balance between microtargeting and creativity, they can get back to the basics of storytelling and creating truly compelling ads. What’s an ad that’s stuck with you for days, months, or even years? Chances are the one you’re thinking of right now isn’t a micro-targeted ad that popped up on your Instagram feed. By placing a greater emphasis on storytelling, advertisers can better connect with and engage consumers. Developing a story alongside an ad also taps into humans’ natural curiosity, compelling them to watch it all the way through even if for no other reason than to figure out what’s happening. Today’s most powerful ads – like the SuperBowl commercials we all know and love – delay for as long as possible the fact that they’re even ads at all.
But, with more creativity comes the need for more capacity, and that’s where creative automation comes in. To ensure content is still able to get to market quickly, and be scaled and personalized where necessary, creatives will need to streamline or automate their design processes – in fact, 32% of marketers think that automation is best used for creating content more efficiently and quickly. Luckily, technology is starting to catch up to the explosive content demand brought on by personalization, making it easier for creative teams to keep up. Introducing automation to generate slightly different variations of digital content not only frees up time, but makes testing these variants – like different banner dimensions or background colors – much easier. This demonstrates the impact that putting in extra creative effort can have, and allows designers to focus more time on coming up with cool, out-of-the-box concepts.
While personalization that increases relevancy is here to stay, its days as the end-all-be-all of advertising hopefully aren’t. Going forward, we can expect to see advertisers stepping back from relying solely on data and rebalancing their efforts with the heart of this industry – creativity.
Andrew is the CMO of Bynder, the global leader in digital asset management (DAM), providing the most powerful and scalable SaaS solution for brand management. Currently, Andrew is helping Bynder manage its next phase of expansion. He has more than 20 years of experience in leading marketing and product teams at international and fast-growing organizations, including Allego, Cazena and Bullhorn.