Advertising is everywhere online. It can be easy to overlook when it appears alongside your Google search results or across the top of your favorite news site. But advertisers are getting better at using personalization to make ads relevant to get and keep users' attention and give customers a unique experience. Read on to learn about this effective way to reach the audience you want, what's involved, and how to get started on your ad personalization efforts today.
What is personalized advertising?
Personalized advertising is marketing content that is tailored to your audience. It delivers an individualized experience to each website visitor, potential customer, or repeat client. Personalized ads use data collected about each individual—information like demographics, browsing history, and location—to determine which ads to deliver.
The customized content of targeted ads can include text, images, product discounts, and other information relevant to the individual customer or to specific audiences. Personalized advertising can be incorporated into many online platforms, including email, websites, search engines, and mobile apps.
The benefits of personalized advertising for your business
You know you have a great product or service, so you might think it makes sense to create a single ad with your best sales pitch for everyone. But there are good reasons to offer personalized content to your customers. It makes your marketing message more effective, shows that you've thought about what your customers need, and delivers a personalized experience that customers have come to expect. Read on to explore these benefits in more detail.
Enhanced customer experience
It's a competitive marketplace out there. Making sure your products or services stand out can be challenging. Personalized advertising is a great tool to give your customers a better experience that can lead to more sales. By understanding consumer behavior, you can present ads that highlight relevant products, save time for your customers, and deliver personalized experiences, resulting in increased engagement online. Consumers today expect a more tailored customer journey, and ad personalization is one way you can deliver that.
Higher conversion rates
Your ad campaigns are more effective the more people follow links, browse your products, and make a purchase. When users see irrelevant ads and ignore them, your conversion rate isn't as high as it could be. On the other hand, embracing ad personalization will deliver more relevant and useful online ads to your audience and they'll be more likely to pay attention and become satisfied customers.
Better customer relationships, retention, and brand loyalty
You know that building good relationships with your customers is the heart of a growth-oriented business model. Personalized ads can be a powerful tool to help make the customer experience smoother and even foster trust.
You can use information about past purchases to deliver ads customized to their needs. Maybe it's a discount on a related product or ads based on the user's location, like offering free consultations to local residents. A company that demonstrates an understanding of customers' needs by targeting their digital marketing thoughtfully and using consumer data responsibly is also a smart way to keep customers coming back.
In a crowded e-commerce marketplace, customers appreciate having a brand that understands what they want and personalizes their experience to deliver it more quickly and efficiently.
Improved ad targeting over time
You may use data to create and deliver personalized advertising, but the information you collect from those ads can be used to make them even better. The more information you get, the more sharply you can define your target audience and customize your ads. Machine learning and artificial intelligence are particularly useful tools for this. Their ability to analyze data and identify patterns makes it easier to take full advantage of personalization.
How to collect data to personalize ads
Developing a personalized ad strategy starts with collecting data on your website users and potential customers. With this information, you can create a unique user profile that helps you define audience segments for targeted ads and deliver the right ad to each customer.
Cookies are bits of data collected from users about their online behavior and activities. They're collected by tracking programs to store information about things like websites users have visited, terms they've input into search engines, and how much time they have spent on your site. Cookies can be tracked using built-in or third-party tools, then analyzed and incorporated into your advertising.
Survey and forms
While a lot of customer data—like user behavior, social media activity, and Google searches—is collected in the background, it's also possible to use a direct ask in your data collection. By conducting customer surveys or asking them to fill out forms, you'll make sure to get exactly the information you want and ensure that it's being provided willingly—a benefit when many people are wary about how much of their data is gathered and shared without their knowledge.
If you decide to survey your customers, here are a few tips to help you get the most useful information:
- Think about what data you need. This is the place to get information that might be more difficult to collect automatically. For example, you might ask customers about their interests, preferences, and what kind of ad personalization they find most useful.
- Keep it short. Customers will be more likely to give you thoughtful and accurate information if they don't feel it's too much work.
- Consider offering incentives. Taking even a short survey requires your customers to spend some of their valuable time. After they finish, reward them with a discount code, free product, or other incentive.
Customer data platforms (CDPs)
A customer data platform (CDP) is a type of software that collects and consolidates customer data like browsing history, web searches, and purchase history. This allows you to analyze the data, create custom audiences and audience segments, and personalize marketing messages to users' interests. CDPs also have built-in tools to help ensure data privacy and security best practices.
CDPs are similar to customer relationship management (CRM) software, but CDPs are primarily for creating unique customer profiles for marketing messages, while CRMs help organize and manage customer relationships over time.
Ways to personalize your ads for your target audience
There are almost an unlimited number of ways you can use personalization to deliver a custom experience to your users. Following are some common types of data to craft personalized advertising messages.
Demographic information includes age, race, income, education, gender, sexual orientation, and parental status, among other similar traits. Using this data, you can create personalized ads for different audience segments. For example, if your freelance business offers proofreading services for academic dissertations and articles, it might make sense to target customers who have at least a bachelor's degree.
Many ads target users with information collected about their online behavior. This data can include activities like search engine queries, websites visited, app usage, and time spent on social media platforms. Knowing this information lets you create personalized advertising that appeals to your users' interests and online activity.
Another way to target your online advertising uses the websites that visitors are currently browsing. Context-based targeting analyzes the content of the web page, including text, keywords, images, and videos and then delivers personalized ads based on that context. For example, your sports equipment business might create ads featuring your scuba gear that appear when someone is looking at tropical beach vacations.
Consumers have so many options that they often browse a number of sites before making a decision. If a user leaves your site without completing a purchase, you can reach out to them again via personalized ads to remind them of a product that caught their interest or offer them a discount. This is known as retargeting.
The best formats for personalized advertising
There's almost no limit to the ways you can use personalization in your online advertising. Here are some of the most common formats to reach as many potential customers as possible.
Sending personalized emails is a great way to deliver your message to customers who have already indicated an interest by providing their email address through a request on your site or by placing an order.
You can send custom emails to each segment of your audience or even use content personalized for each recipient with information like their name, most recent purchase, or a new product you think would be likely to bring them back. Use a service like Mailchimp's email marketing tools to craft your messages, collect more data from the responses, and make the process easy.
Display ads appear on websites or apps and may include text, images, or even videos. They're often used to drive brand consideration and may even be designed to look like editorial content—an article on the hosting site, for example.
Personalized display ads can be based on the content of the site or the type of audience it attracts. If you are a DJ who provides music for weddings, you may place display ads on wedding planning sites, targeting users based on their geographic location to find clients in your area.
Ads on social media platforms
Most social media platforms are free for users and earn revenue from advertisers. Social media is a particularly good way to target customers based on their interests since users have already created their own customized profiles based on the accounts they want to follow and interact with.
Personalized video ads can appeal to a certain audience segment—like new parents in a certain income bracket—or even to individual consumers. Videos can be created individually for high-revenue customers or potential clients, but you can also make personalized videos that address customers by name with a bit of other individual information like their location.
How to create an effective personalized ad
You may be ready to jump into creating your own personalized advertising. Before you get started, here are the things you need to do in order to make your ad campaign as effective as possible.
Collect data for ad personalization
The first step of ad personalization is to collect information about your audience. You'll use this information to decide what audience segments you want to target. You may find that certain segments of your customer base aren't performing as well as they could be. Or you might discover a new group of potential customers that your marketing efforts had been neglecting until now.
Don't forget to follow all laws and regulations about collecting data, obtain consent for using data if required, and allow users to opt out. You should also address data privacy concerns and make sure your systems are as secure as possible.
Define your target audience through data analysis
Once you've collected the data, you can analyze it to identify trends, opportunities, or underserved audience segments. You may use audience management programs and visual representations like charts and graphs to see what audience segments have grown recently and where there are more opportunities.
Figure out your ad format
If your small business is just getting started, you may not have a large database of customers or a robust email marketing list. In that case, consider placing ads on social media apps to target users who are browsing for similar products. On the other hand, if your beauty products company already has a large database of repeat customers, a personalized email offering a discount on past purchases might encourage people to restock their favorites.
Craft the ad itself
Online ads can take many formats—text only, images, or videos—and may even include interactive elements like a survey or rating scale. When designing your ad, keep in mind that most viewers will only glimpse it in passing. It's good to make it eye-catching, of course, but you also want to keep it simple and easy to understand with a quick glance.
If you're crafting an ad that will be personalized for different segments of your audience, you may make several versions of the same ad. If your ads are being personalized for individuals, you can use a customer database to insert information specific to them like their name, location, or interests.
Publish the ad
Whether you're making an ad to appear in Google search results or to email to customers in your loyalty program, this is where you send your creation out into the world. In the case of email personalization, it may be as simple as hitting send. If you're using display ads, you'll want to make sure they're appearing on websites that target your desired audience based on demographics, interests, or historical data from their browsers. Programs like Google Ads have many options and often allow you to choose how to pay for your ad—for each impression, each click-through, or for a flat fee.
Track metrics for continual improvement
Once your personalized ad has been published, keep track of how it's doing. You'll want to note how often users click on the ad, whether those people complete a sale, and which ads are most successful. In addition, you can add to your demographic-targeting data by looking at where your ads perform best.
Depending on where your ad is placed, the tools you will use to track metrics differ. For example, Meta Pixel will collect the information and give you tools to analyze it.
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Five tips for making the most of personalized advertising
Now that you understand the basics of personalized advertising, take your ad game to the next level by trying some of the following tips.
Tip #1: Experiment with targeting approaches
Personalized advertising can be more art than science. There's no right way to target your audience, and trying different approaches may uncover some surprising results. For example, if you've focused primarily on demographic data, consider using behavior and interests to deliver your ads.
Tip #2: Use a variety of sources for consumer data
There are many ways to collect useful data about your audience. You don't have to rely only on the information you collect yourself through data tracking or surveys. For example, there's a wealth of information in marketing newsletters and you can access demographic data collected by the United States Census Bureau for free.
Tip #3: Consider different advertising platforms
You probably have one or two advertising platforms that have worked well for you in the past. While it's a good idea to continue using those, personalized advertising gives you a great opportunity to expand to different channels as well.
You may already be using a site like Google Ads, which allows you to display your targeted ads on the same page as a user's search results. Consider adding social media ads on sites like Facebook or Instagram, where you can target users based on the accounts they follow and interact with.
Tip #4: Keep your audience engaged
Most people think of advertising as something passive for consumers—they see an ad and choose to follow up on it or pass it by. Instead, think about using interactive elements in your ads. If viewers stop to take a quick quiz or survey or play a simple puzzle game related to your business, they're already engaged. This is a chance for you to include a follow-up action that will raise awareness of your brand, increase your click-throughs, and even collect more advertising data.
Tip #5: Be transparent with consumers
Consumers are savvy about how their data is collected and used online. Most people appreciate the convenience of a personalized experience but are wary of companies that overreach in their data collection. Consumers also want to know that anyone who has collected their data is prioritizing security and will act responsibly in the case of a data breach.
In addition, many regions have passed laws that regulate what information can be collected, how and when it can be shared, and how consumers can opt in or out of having their data collected and stored. Make sure you're upfront with your audience about what data you collect, how you use it, and how they can choose not to have their data gathered.
Now that you understand the benefits of ad personalization and how to craft your own personalization strategy, you can join other successful online advertisers in boosting your business performance.
Make sure you keep in mind data privacy and security issues, then get started delivering a customized, engaging experience for your audience today!
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