Boo! Are You Unintentionally Scaring Your Customers?

Targeting in online marketing has gotten really good – scary good, in fact. Think for a moment about the level of granularity that AdWords now provides SEMs.

If I wanted to, I could create a targeted campaign that only shows ads to people:

• In San Mateo, CA
• Using their iPhone
• Using WiFi
• On AT&T
• Online between 7:00 and 7:15PM
• Who have previously visited a specific page of my website
• Who typed in the query “Dracula costume”

With all that data, I could create ad text and landing pages that might make someone wonder if I’ve hacked into their device and stolen some of their personal files from their house.

But wait – there’s more! I could also develop a remarketing campaign on Google Display Network to follow this poor consumer around the Web with increasingly more aggressive ads offering big discounts to come into my costume store (with remarketing, you can target not just on the page someone visited, but by how long it has been since they visited your site).

And, let’s not forget Facebook. Through the Facebook Ad Exchange (FBX), I can retarget my prey on Facebook, as well. And, if this individual has ever signed up for my email newsletter, I can also target him/her on Facebook through Custom Audiences, which is basically a mail merge between my email database and Facebook’s user list.

Finally, just to add a little more fuel to the fire, to increase my e-commerce sales, I might partner with a dynamic retargeting company like TellApart or Criteo to run display ads that show the customer images of the actual product he’s viewed on my site.

A couple of years ago, AdAge ran a column about retargeting titled The Pants That Stalked Me on the Web. The article was specifically about the author getting served Criteo retargeting ads one too many times. Today, that author might feel relieved if all he was seeing was Criteo ads.

Add up FBX, Custom Audiences, search retargeting, and the general advances in AdWords targeting, and today’s user can be (and probably often is) over-targeted to the point of annoyance.

The Road To Creepiness Is Paved With Good Intentions

Ironically, most marketers set up these targeting campaigns because they actually want to provide a better user experience for customers.

After all, serving ads to users only after you’ve determined interest in your business or a specific product is – on its face – better than just plastering the Internet with ads and hoping than one out of a thousand ends up reaching the right person.

Target ads – in theory – should also drive higher ROI for advertisers. As SEMs know, the return on ad spend (ROAS) is always higher from a search ad (which is fulfilling demand) than a generic display ad (which is creating demand). By adding increased targeting to ad campaigns, you can shift budget from demand fulfillment to demand creation, an ROAS win!

These benefits, however, can disappear quickly in an over-targeting situation. As noted, consumers who feel that you are stalking them can develop negative brand affinity toward your business.

Instead of driving tons of incremental sales from a good customer, you drive that customer away for life (and perhaps turn that customer into a “net detractor” who spreads ill will about your business across the Internet).

From a tracking perspective, too many targeting campaigns make it almost impossible to truly determine who gets the credit for a sale. Given the fact that tracking cookies from different companies don’t talk to each other, you could quickly end up in a situation where five different providers all believe that they deserve 100% of the credit for a purchase.

If you happened to pay all five of these providers for the sale, you might suddenly find that ad programs that seemed like no-brainers from a ROAS-perspective collectively add up to a negative ROAS result!

Stop Stalking, Start Sculpting!

To go from over-targeting to fine-tuned targeting is a bit of an arduous journey, but one that is ultimately worth the investment. To do it right, I recommend these four steps:

1. Set up attribution tracking.

Attribution may be the official word-of-the-year in online marketing for 2012. Attribution simply means giving proportional credit to a sale to the many clicks and channels that contributed to your customer’s buying decision. So, instead of just last-click tracking, an attribution model gives credit to all clicks.

Attribution tracking fixes the problem of five partners each giving themselves 100% credit for a sale. The downside of attribution is the cost; the leading attribution players (Adometry, C3, ClearSaleing, Convertro, and VisualIQ) typically charge anywhere from $3-$10K/month to use their services. Ouch!

2.  Set frequency caps – across all channels, if possible

Once you’ve gotten attribution set up, you can start to see how different channels interact with each other globally. For example, perhaps a successful search on the term [Dracula costume] is almost always preceded by at least three views of a display ad, but users who first click on search and then go to Facebook and click on an ad almost never convert.

You can use this information to set frequency caps (the number of times a user sees your ad on a given channel) and: a) avoid spending money on clicks or impressions that won’t convert; and b) reduce the chances that you are just annoying your users!

This also requires some heavy lifting – for example, segmenting pools of users based on where they are in the conversion funnel and then setting different frequency caps across different channels accordingly – but you should have a positive payoff if properly executed.

3.  Create different targeting messages at each stage

Now that you know which channels deserve credit and how frequently you should blast your message to your potential customer, you can set up different ad creative to reflect the different stages of the user journey.

For example, if you know that people seeing a display retargeting ad are at a much earlier stage than someone you are targeting via AdWords mobile search ads, your display ad should be much more focused on awareness and your mobile ad highly focused on conversion.

4.  Balance ROAS with Customer Satisfaction

Last, but not least, step out of your aggressive direct-marketer shoes for a moment and think about the lifetime value of a positive relationship with a customer. Sure, you could set a frequency cap of 8X for a segment of your audience and gain an incremental .0002% of profit over a frequency cap of 4X, but you might also alienate some potential customers along the way.

These potential customers might never visit your business again and might complain to their friends about your devious marketing. Successful businesses today weigh profit with customer satisfaction.

Trick Or Treat?

Granular targeting and retargeting across search, social, and display will play a major role in online marketing budgets in the coming years. The diversity and complexity of this tracking, however, will cause many marketers’ heads to explode and will create confusing metrics that will trick marketers into making the wrong decisions.

The proper tracking, planning, creative, and attitude can enable you to avoid these problems. Start getting your ducks in a row today, and you can treat your customers to great marketing campaigns while simultaneously boosting your marketing-driven profit dollars!

Image used under license, courtesy of Shutterstock.com.