Addressable marketing refers to the ability to use media to target specific individuals, rather than large groups of anonymous third-party cookie pools. It’s similar to direct mail, in that each marketing message is tied to an individual’s personally identifiable information (PII), such as name, email, or mailing address. However, the concept is much more difficult to execute online, where consumers travel across many websites via multiple devices.
When leveraged successfully, addressable media helps marketers create one-to-one conversations with customers and prospects, create a better customer experience, and reduce wasted media spend. Below we’ll discuss what addressable media is, as well as review some of the key benefits it provides.
What is Addressable Media?
Addressable media refers to advertising that connects brands with individual consumers across multiple online advertising platforms, social media, OTT (Over the Top) content providers, and smart TV platforms.
The process starts with an advertiser’s database of PII—typically from a CRM of current and prospective customers—that’s appended with additional demographic, behavioral, and transactional data available to advertisers. These rich audience segments allow marketers to then create personalized messaging down to the consumer level.
For example, if a consumer signs up for a new phone plan from AT&T, that company’s marketing department will know the purchaser’s name, email, and address. They may also know that people who purchase that particular plan have a high propensity to upgrade to DirecTV about six months later.
With that knowledge, AT&T can serve a highly relevant ad to individual consumers at a controlled frequency across multiple devices and channels to drive a cross-sell conversion. To facilitate that one-to-one conversation, the marketer must first have direct access to the consumers. Finding ways to achieve this was a challenge, prior to the rise of addressable digital media opportunities, because the only way to have a persistent conversation with these consumers was through channels such as email and direct mail.
Today, many online advertising platforms—such as Facebook—have access to consumer PII and engage with users across multiple devices, which enables them to match individuals across devices at scale. They’ll know if a user logs in on a computer, mobile phone, or tablet and how often they do so. Connecting this data with outside CRMs creates an opportunity to resolve a user’s identity, and provides marketers with the opportunity to reach these high-value targets with relevant messaging.
Addressability and Identity Resolution
Identity can be resolved in two ways: CRM information can be directly uploaded to an advertising platform (that allows for onboarding of PII), or it can be passed to an onboarding service to be anonymized and matched to multiple online platforms.
Here’s how it works:
Example 1: Direct Upload
A marketer has a list of names, emails, and phone numbers for current customers. They want to send personalized messages to each consumer based on previous purchase history, so they create a file of customer data and upload it directly to an ad platform such as Facebook. Once there, the data is matched to current Facebook users to be targeted with highly relevant messages.
Example 2: Onboarding and Activation Service
The marketer could also take the same data—name, email, and phone number—to an onboarding service such as Liveramp. These services take the consumer data, anonymize it to protect identity, and connect it to user profiles across dozens of publisher sites/networks or DSPs, such as, DV360, The Trade Desk, or Verizon Media, for activation.
Of these two options, using an onboarding service is the most popular option by far for enterprise marketing departments because it allows brands to limit third-party exposure to their first-party PII.
Beyond the Basics:
Benefits of Addressable Media
Whichever method is selected, addressable media creates a host of benefits for consumers and marketing departments alike, starting with an improved customer experience. When you know who a prospect or customer is and where they are, it’s possible to serve them targeted, relevant messages that will add value and drive interest.
Most consumers are used to seeing advertisements that are meant for mass audiences via billboards, television programming slots, and even online ads. When they instead see ads for things they actually want and need, the advertising experience becomes much more pleasant, which creates positive associations, improves brand loyalty, and drives performance across channels. Addressable media can also lead to higher conversion rates, though individual ad results vary from brand to brand.
How Traditional Marketing Creates Massive Waste
One thing all brands can count on when deploying addressable media is a significant reduction in wasted marketing spend, as they stop advertising to the irrelevant audiences inherent in traditional advertising. The problem with this advertising is that it offers very basic targeting methods based on limited user behavior that isn’t sufficient to create a meaningful ongoing conversation.
For example, Verizon Media—publisher for sites such as HuffPost, Tumblr, and Yahoo Mail—offers targeting based on general demographics or other information that can be derived from cookies. But these insights are broad in nature and short-lived, as cookies have an average lifetime of 21 days before being cleared or deleted by consumers. This means marketers are limited to targeting large swaths of consumers who have exhibited the same general behaviors as their target audience over a short period, which is imprecise and inefficient.
Similarly, advertisers may buy a standard television spot on a relevant network, even though less than 50% of the audience actually falls into their ideal customer profile. As a result, millions of dollars are spent advertising to consumers who fall outside of the target audience of a brand.
Reduce Waste with Addressable Media Campaigns
When used correctly, the highly relevant nature of addressable media can be used to drive incremental CRM performance improvements through cross- and upselling, or to increase new conversions by targeting new prospects on individual devices—all while controlling frequency, eliminating oversaturation, and avoiding serving impressions to audiences outside of a target market.
Regardless of application, it’s easy to understand why addressable media is quickly gaining a larger percentage of modern marketing budgets. The ability to have one-to-one conversations with consumers while reducing waste can create the increased return on investment and improved efficiency modern marketers are searching for. With consumers exposed to ever-increasing numbers of marketing messages every day, the need to stand out and cut through the noise is at an all-time high. Fortunately, addressable media provides the opportunity to do just that.