According to several studies, consumers — on average — experience between 10,000 and 15,000 marketing messages a day that include everything from billboards and TV commercials to online display ads and product logos on T-shirts.
For fashion apparel retailers and brands, cutting through the marketing noise with their messages can be challenging. Moreover, as consumers navigate an omnichannel retail market where shopping and buying can occur online, in stores or on a mobile device, advertisers are pressed into developing more targeted campaigns.
Here, Lothar Krause, vice president of global advisory services at Sociomantic Labs, which offers programmatic display advertising solutions, discusses these trends and how companies can leverage technology to make their messages hit the mark.
WWD: What exactly is “cross-device targeting” and how can retailers and brands use it to increase sales and margins?
Lothar Krause: Cross-device targeting enables advertisers to reach an individual online across a range of connected devices, ultimately providing an enhanced, more personalized customer experience before, during and after shopping. Just think about how many devices you use on a daily basis: your desktop, smartphone, tablet, perhaps even a smartwatch.
With cross-device targeting, retailers can have an initial touchpoint on one device — let’s say mobile — and reach the same user on another device to increase the likelihood of conversion. A universal frequency cap across devices can also prevent users from being shown too many ads within a given time period, and related technologies can even make it possible to deliver a different message depending on which device it is delivered on. This helps to save retailer’s dollars and deliver more effective ads.
By unifying each individual’s online interactions across all devices, advertisers can more effectively target each shopper with messaging that is consistent with their shopping behavior and relevant to their needs.
WWD: A consumer’s shopping journey is much more complex today than it was, even just a few years ago. It may start online or in a store with research and browsing, and it could end either in a store or when she hits the “buy” button. How does this impact the way retailers and brands market to consumers?
L.K.: It is indeed an omnichannel world we’re living in, and consumers have become more shopping-savvy than ever — whether it’s the ability to check a competitor’s pricing on their smartphones while standing in front of a window display, or to research purchasing an item in store rather than online while at the office. Because of this, it’s vital that advertisers create a holistic attribution strategy that stretches across all channels and devices.
Advertisers that have had the most success with this have been able to link their customers’ online behaviors with their in-store experiences. Let’s take Sephora for example, a leading cosmetics retailer that has a widely popular loyalty program. By signing up for Sephora’s loyalty program, individuals are able to redeem rewards based off the amount of money they spend, simply by providing an e-mail address. Sephora uses these e-mails as unique identifiers and can then tie its customers’ purchase behavior no matter where they shop, as long as they log into their profile at checkout. This unique identifier provides advertisers with valuable CRM data that can then be used to further engage with high-value customers and create stronger, and more profitable, customer loyalty.
WWD: One study noted that on average, consumers are bombarded with over 10,000 marketing messages a day. How does a brand or retailer cut through this noise?
L.K.: It’s true, the amount of ads we as consumers are exposed to on a daily basis is astounding, but the real problem lies in the number of irrelevant ads we are shown. This overabundance often leads to banner burnout and, as we’ve been seeing more of lately, an increase in ad blocking.
The key to providing effective advertising in the midst of all the noise is through personalized advertising, and that’s where the beauty of programmatic really shines through. With personalized advertising, individuals are shown relevant ads that are unique to their specific needs, based on their online purchase behavior and CRM data. In fact, a recent survey by Magnetic found that 58 percent of consumers agreed that they would share their shopping behaviors with retailers if in return they received relevant, personalized offers.
But what is to be done about the sheer number of ads out there? To avoid adding to the problem, advertisers can, and should, control the amount of ads that their customers receive from them. This can be accomplished by working with a programmatic partner that offers universal frequency caps not only for reach and branding campaigns, but also for retargeting campaigns. This means it is possible to limit the amount of ads that an individual sees from that particular advertiser for a given time period. When it comes to frequency capping, the key to success is to limit the number of partners each advertiser uses to reach customers in a given channel, as the number of ads that are shown inevitably grows as you increase the amount of partners.
WWD: Do you think brands and retailers are using data in the right way? Why or why not?
L.K.: Ah, the famous old digital marketing adage: “With great data, comes great responsibility.” In all seriousness, advertisers are sitting on some powerful first-party CRM data – but they’re not always efficiently using it. The sheer amount of the data that many advertisers are dealing with can make it difficult to pass that data to the channels in which they could have the biggest impact. Too often, powerful customer-level data such as product return rates – a metric that can make or break the profitability of a given customer for a retailer – are left to rot in a data warehouse while the marketing team continues to target the wrong people.
So what is the best way for advertisers to capitalize on this valuable customer information? It’s important to pull all the data available across devices and channels, into a holistic customer view, and then to work with marketing partners that will enable you to leverage that data to delight customers in real time.