Targeted advertising has become the holy grail for marketers and media buyers.
It is the process of getting the ad to the right person at the right time. Businesses are spending money to get their brand message across to more and more people. Reaching the right audience is the key to getting the best ROI. In this article, we will discuss targeted advertising.
What is Targeted Advertising?
Targeted advertising is the type of advertising that focuses on specific behaviour, traits, interests, or preferences of potential customers. It works by tracking the activity of customers on the internet.
The most important step of targeted advertising is knowing who your customers are, where and when you can find them, and understanding your customer’s demographics and behaviour.
How does Targeted Advertising Work?
Online behavioral advertising, commonly referred to as targeted advertising, uses advanced algorithms and data analytic methods to present customized advertisements to certain people or groups. Through a variety of sources, like as website visits, search queries, social media interactions, and device usage patterns, it gathers a tremendous quantity of user data to function. After analysis, comprehensive user profiles, including demographics, hobbies, and internet habits, are produced.
By customizing their adverts based on customer segmentation data, advertisers may reach audiences that are more inclined to interact with the content. Advanced targeting techniques include demographic targeting (concentrating on a particular age, gender, or area), behavioral targeting (based on past online behavior), and contextual targeting (matching advertising to pertinent web content).
Retargeting is basically advertising to targeted customers as it also follows consumers who have previously interacted with an advertiser’s website, reminding them of the product or service by displaying relevant advertising when they explore other websites or through push notifications.
Although showing more relevant information through customized advertising improves user experience, privacy and data security are raised. For ethical and successful advertising practices in the digital era, it’s critical to strike a balance between personalized adverts and user privacy.
Some Examples of Targeted Advertising
Below are the examples that highlight the many approaches to targeted advertising. They show how companies utilize user data to present tailored and pertinent ads that boost the likelihood of conversions and sales.
- Social Media Advertising – Websites such as Facebook, Instagram, and Twitter provide advertisements according to users’ interests, demographics, and online activity by using user data.
- Search Engine Advertising – To guarantee that relevant advertising is displayed alongside search results, search engines such as Google utilize targeted adverts based on users’ search queries and browsing behavior.
- Email Marketing – By examining consumers’ previous interactions and buying patterns, marketers may create customized product recommendations and promotions through personalized email campaigns.
- Contextual Advertising – Websites that display contextual advertising place adverts about their content. For example, advertisements for kitchen appliances may be displayed on a culinary website to visitors who are interested in cooking.
- Video Streaming Services – Websites such as YouTube use user-specific watching data to display relevant video advertisements during or in between videos.
- Mobile App Advertising – To increase the chance of interaction, in-app advertisements target users with relevant advertising based on device information, location, and app usage habits.
- Geo-targeted advertising – Through geo-targeted advertising, local companies and services catered to certain regions are promoted by customized adverts depending on users’ geographic locations.
- Retargeting – Websites follow visitors who came but did not buy anything, showing them tailored advertisements for those goods on other websites they browse and luring them back to the site.
Thus, the scope of advertising has certainly increased due to digital marketing. It has become even more crucial to target the right audience, as people are so bombarded with advertisements that there is only a slim window to break through. But once you do, voilà, you’ve managed one step to converting a lead to a customer through targeted online advertising!
Advantages of Targeted Advertising
Targeted advertising is preferred by media buyers over other forms of advertising due to its following advantages:
Targeting the Right Audience
Targeted advertising allows businesses to understand their potential customer’s needs and wants and create an advertising strategy targeting them. It connects you to your potential customers, who are more likely to buy your product or services based on their online behaviour and activity.
Deliver a higher level of Personalization
Ad personalization has become widely popular because of its effect on customer acquisition and retention, CTR (click-through rate), and CLV (customer lifetime value).
Ad targeting allows businesses to personalize Ads based on what they know about the customers and what customers need. The better the personalization, the better engagement, and ROI its results. Ad personalization can boost revenue by 15% and encourages repeat purchases.
Attracting high-quality leads
Targeting and personalizing ads for your specific audience leads to getting high-quality leads. You will reach out to the right audience to engage with your business and turn them into your potential customers.
High ROI
Publishing ads to relevant customers based on their behaviour, interest, and needs results in high conversion rates, sales, and revenue.
Targeting ads help you reduce the price per click as the ads are personalized and targetted only to customers that are interested in the brand and thus help get a better return on investments.
Lower cost
As compared to traditional and content marketing, targeted advertising costs are lower. It helps you customize your ads as per your budget and never lets you go over it.
In-depth analytics
Advertising platforms that allow targeted advertising also gives excellent tools to show the real-time performance of your ads. They enable access to advanced analytics, which you can use to improve your ads and make timely changes to get better results.
Targeted Advertisement Statistics
All the advantages mentioned above of targeted advertisements are based on studies and research. Following are some facts that will give you more reasons behind the popularity of this type of advertisement:
- 41% of young internet users between the ages of 18-24 see targeted advertisements as an opportunity to discover new goods.
- 27% of internet users like targeted ads as an easy way to learn more about the products they are interested in.
- The average click-through rate of behavior-targeted ads is 5.3 times higher than other forms of advertisement.
- In 2018, contextual advertisement wanted the most popular, and 80% of European businesses preferred it over other types of targeted advertising.
Type of Targeting
Demographic Targeting
This type of targeting allows businesses to target audiences based on their age, gender, nationality, language, salary, etc.
Contextual Targeting
Contextual ad targeting helps ads get placed along with the related web content. While creating ads, media buyers can add related keywords, and that’s how the ad will show up on blogs, websites, etc., related to those keywords. This way, customers will have a better-integrated experience and are more likely to interact with your ad as it will be something they are interested in already.
Behavioural Targeting
Behavioural targeting is similar to contextual targeting as here. Also, ads are placed across the web. The placement of ads is based on users’ behaviour, browsing activity, links clicked, purchases, time spent on web pages, social media follows, etc.
Geographic Targeting
This type of targeting allows media buyers and brands to target their potential customers by location, region, or country. Geographic targeting is essential for businesses that operate in a specific location or want customers from an exact geographic location.
Retargeting
Retargeting targets customers who have already shown interest in the brand and visited the website or social media profiles.
Targeted Advertising vs Spray and Pray Form of Advertising
Spray and pray advertising is the oldest form of marketing and advertising. It works by sending advertisements or other forms of marketing communication to as many people as possible.
The interested audience will contact the business to buy a service or product. This is where it differs from targeted advertisement.
Another difference is that targeted advertisements allow advanced analytics, tracking conversions, and measuring campaign success, which is impossible with the spray and prays form of advertising.
Targeting vs Personalization
The following are three key differences between targeting and personalization:
| Targeting | Personalization |
|---|---|
| Targeting is what a business needs. | Personalization focus on a customer’s needs. |
| Targeting shows the same offers, content, or products to all the targeted audiences. | Personalization creates a relevant and personal experience for each audience. |
| The most common strategy of targeting is segments and rules. | Personalization depends on machine learning algorithms and each customer’s data. |
Platforms For Targeted Advertising
Multiple social media platforms allow targeted advertising, and the following are popular ones:
#1. Targeted Advertising on Facebook
Facebook allows targeted advertising and is widely used by businesses for the same. Following are a few basic steps you need to follow to set up your first Facebook-targeted ad:
Create your account on Facebook ads manager; this is where you are going to create and manage all your Facebook ads.
Once your account is created, you will access the performance dashboard, where all your campaigns, ad sets, and ads will be listed.
To create your ad, start by first choosing an objective for your campaign. You will have the following 11 different objectives to choose from:
- Brand awareness
- Reach
- Website Traffic
- Engagement
- App installs
- Video views
- Lead generation
- Messages
- Conversions
- Catalog sales
- Store traffic
The next step is defining your audience. You will have the option to choose targeting options from geographic location to a lookalike audience.
Then you need to create your ad with the option to add video, single image, carousel, or slideshow creatives.
The final step is to define your ad’s budget and time duration for which your ads will run.
#2. Targeted Advertising on Instagram
You can run targeted ads on Instagram through Facebook ads manager. It does not require additional steps other than selecting the Instagram option for where you want your ads to publish and connecting your Instagram account with the FB ads manager. It allows you to promote your existing Instagram posts and stories that did well or you want them to reach more audience.
#3. Targeted Advertising on LinkedIn
LinkedIn is a social media network for professionals, so it’s naturally targeting professional demographics. You can create a custom audience by uploading contact data or a lookalike audience. While building a lookalike audience, you can have the following options:
- Job title
- Company name
- Industry
- Interests- professional and personal
#4. Targeted Advertising on TikTok
TikTok being the most downloaded app on iOS in 2021, is the platform that mostly has a young audience. The platform allows you to target an audience based on the following options:
- Age
- Location
- Gender
- Language
- Interests and behaviour
- Device model, model, connection, and carrier
#5. Targeted Advertising on Twitter
With Twitter, you can target your audience using the following categories:
- Demographics: Age, Language, Location, Device, and Gender.
- Audience types: Events, Conversations, Keywords, Tweet Engagers, Movies & TV, Interests, and Lookalikes.
- Your audiences: using this category, you can distinguish between a custom audience and targeting your followers.
Targeted Advertising Tips
Targeted advertising is no doubt a great opportunity for your business to grow and scale to its full potential. It is the most cost-effective and efficient form of marketing and advertising. But according to many media buyers and marketers, the success of targeted ads lies behind the tricks and proven strategies and how a business implements them. Let’s discuss some tips you must implement:
- Retarget your customers: It is equally important to retain your loyal existing customer as much as it is to target new customers. Studies have shown that only 5-25% of new targeted customers will buy from you, but it is as high as 60-70% in the case of your existing customers.
- Show Ads to your fans: If you have existing followers on Facebook and Instagram, showing ads to them can boost your ROI by as much as 35 times.
- Split testing: It is always best to split-test your target audience. You need to find out which audience type within your targeted audience is converting more. Split testing can be based on gender, age, interests, device, etc.
- Lookalike audience: You can benefit from creating a lookalike audience with the same defining characteristics as your custom audience. Doing this will increase the number of your target prospects.
Conclusion
Data collection is an essential requirement for targeted advertising, sometimes raising privacy concerns. The future of targeted ads is very bright as long as they don’t go illegal tomorrow. This type of advertising is a win-win situation for both sides. Customers like getting advertisements for products or services only they are interested in, and businesses enjoy great results from them.
You can also explore some trigger marketing techniques for better targeting and ideas to engage users.