At last, direct marketers are making strides in the much-discussed area of ""hypertargeting."" Long coveted because of its ability to offer specific, customized marketing messages that speak to the consumer, hypertargeting is slowly becoming a reality for advertisers.
Bolstered by social networking, interactive entertainment, and user-generated content Web sites, hypertargeting is possible because users are beginning to share more about themselves online, including interests, relationship status, education, health information, and other key demographic and psychographic data points. This information, which is collected and categorized, can then be shared with advertisers seeking specific demographics and audiences. Meanwhile, the development of next generation ad technology is enabling online advertisers to build custom ads in real time.
The Key to Successful Hypertargeting
For publishers, hypertargeting has the potential to be a very profitable revenue stream, with marketers paying a premium for exponentially higher rates of conversion; these higher rates result in higher ROI for the advertiser and higher CPM for the publisher. For hypertargeting to deliver on its promise, however, there are a number of elements that must be in place.
- Publishers bear the burden of both technology and data integrity. Hypertargeting is only as good as the underlying data on which it is based, so publishers must make data quality a top priority. The more engaged a consumer is on a particular Web site and the more information the publisher is able to collect about its user base, the more useful the database will be for hypertargeting. Online entertainment/gaming sites and niche social network sites that focus on particular hobbies or light entertainment — such as trivia, quizzes, etc. — are particularly good sites for marketers to utilize hypertargeting.
- Publishers must also be able to build, target, and deliver ads effectively — a good database is not enough. Additionally, publishers must have quantity. It can be both time consuming and expensive to create a hypertargeted campaign, so advertisers need to select sites and networks that have enough data and enough reach to make the campaign worthwhile.
The Size Challenge
Scope and scale can present challenges for marketers implementing a hypertargeted marketing program. Marketers will only be successful with hypertargeting if they correctly select their target segments and closely monitor the ROI. The more targeted the program, the smaller its scale and the more expensive the campaign will be on a per person basis. If the conversion rate is higher though, the ROI can be greater.
Most advertisers struggle when implementing a campaign for smaller audiences, however, as they are accustomed to working with large agencies on big budget projects. Many brands are still learning how to reduce costs and time to market for the hypertargeted set. They must ensure that the cost of the campaign — from identifying the segment to serving up the ad — does not exceed the value they are deriving. However, when properly implemented, marketers stand to reap increases in click-through rates that could significantly boost returns from their online marketing programs.
On a related note, too few advertisers are taking advantage of the metrics available on a campaign's performance, perhaps because they are still thinking in offline terms, where measuring performance is more nebulous.
The goal of hypertargeting is to tell the ads which people to look for; the campaign metrics should reflect that the advertiser is right about the segments that they've chosen and/or, at the least, provide information that will enable them to tweak the campaign based on what's working and what is not.
The Privacy Invasion
One of the greatest challenges to hypertargeting is privacy. Marketers and advertisers alike must be sensitive to privacy issues and respect that there is a threshold where hypertargeting can be an invasion of privacy. While a fantasy football lover may not think twice about being served an ad regarding a new league, he or she might be angered by a targeted drug advertisement received as a result of sharing information about a health condition on a social network.
Given the current state of the economy, performance marketing tactics such as hypertargeting will become even more important as marketers are forced to justify their investments and show returns on their marketing spend. Meanwhile, innovation will continue to provide publishers and marketers with more options. As ad companies seek to take advantage of this form of marketing in the coming year, look for more cross-site targeting, increased attention being paid to metrics, and the growth of simplified reporting tools.