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02DIGIDAY | State of the Industry

CONTENTS

03

04

06

09

Introduction

In the midst of a mobile era

The right audience

Location-based audiences

Pairing location data with top formats

Where does the data come from?

The recipe for good audience data

Conclusion

11

12

15

17


INTRODUCTION

Early this year, the Pew Research Center estimated the proportion of smartphone owners within the US population: 72 percent. Soon after, comScore released a study saying that 65 percent of digital media time was spent on mobile devices, even going so far as to call desktop a “secondary touchpoint.”

For digital marketers, mobile is no longer an exception or a tactic; it is a given. Those who know which data sources and sets serve as effective roadmaps to their increasingly mobile (and cross-platform) audiences are well-poised to redirect their ads to consumers who are constantly on-the-go.

Now, the mobile shift did not happen overnight. “It started a number of years ago as a migration of our ad spend to mobile devices, following media habits of our clients’ customers,” said Philip Liboon, associate media director at RPA. Marketers have had time to lay their plans and set them in motion.

METHODOLOGY

To determine how the industry has adjusted to this new ecosystem, we surveyed about 150 predominantly US-based brand and agency professionals from October 3-19, 2016 to see how mobile was playing into their overall strategies, what factors led the pack when it came to defining their mobile audiences, and how data was enabling a more precise, nuanced approach.


IN THE MIDST OF A MOBILE ERA

It’s time to stop talking about “the year of mobile” and instead acknowledge that we’re living in a mobile era. “It has always been important,” said Bethany Mach, managing director of global media at Huge. “More and more consumers are adapting to a mobile first and a mobile only lifestyle, and if brands want to connect with consumers, mobile can’t be an afterthought anymore.”

Seventy-eight percent of our respondents echoed that sentiment, saying that mobile advertising was important or critically important to their company. The rate was even higher among agencies, 91 percent of whom considered mobile to be important.

16%Secondary

42%Important

36+42+16+6+T6%

Not veryimportant

36%Criticallyimportant

HOW IMPORTANT IS MOBILE ADVERTISING TO YOUR COMPANY?


17+17+19+23+24+TMoney makes the strongest argument, and a look at spending levels paints a picture that matches that story. Forty-seven percent of respondents are spending between 8 to 20 percent of their overall ad budgets (including both traditional and digital) on mobile inventory.

“More [money] than you realize” goes to mobile, explained Mach, especially when it comes to social platforms. “Social is inherently mobile, and if you’re spending in social, 70 percent of that experience takes place on a mobile device.” Liboon, of RPA, noted that if he’s just looking at digital ad spending, mobile could account for “25 to 50 percent.”

Without a doubt, there’s a clear correlation between those who consider mobile advertising to be more important to their company and those devoting more of their spending to it. What that means is that 21 percent of those who say mobile’s important or critical spend over 20 percent of their budget on it; only 3 percent of those who say it’s a secondary or not a very important concern spend that much.

23%8 - 12% of total spend



17%20 - 100%

of total spend


HOW MUCH OF YOUR TOTAL SPEND WILL GO TO MOBILE ADVERTISING IN 2016?


MOBILE IS ALL ABOUT THE RIGHT AUDIENCE

Mobile is a different world than desktop. These devices are more personal, on-hand at all times. This makes them attributable to single users in a way that PCs or laptops never were; the potential to share them with friends or family was too high for any certainty.“It feels like there are genuine metrics behind [the data] again,” said Kathy Norford, the media director at Spawn, a smaller agency with offices in Denver and Anchorage. “Now we’re much better at predicting the future behavior of our customers.”

The fact that 46 percent of respondents say that all or most of their mobile campaigns use audience data is a no-brainer when seen in that light. This proportion is even higher among those who spend 13 percent or more of their ad budgets on mobile (52 percent). In addition, agencies seem to be more keen than brands on bringing audience data to bear on their campaigns (51 percent versus brands at 31 percent).

46%80 - 100%

of our campaigns

14%0 - 20%of our

campaigns 46+20+14+11+10=9%

40 - 60%of our

campaigns

11%20 - 40%

of our campaigns

20%60 - 80%

of ourcampaigns

WHAT PERCENT OF YOUR MOBILE AD CAMPAIGNS USE SOME FORM OF AUDIENCE TARGETING?


This brings us to a simple insight: Not using audience data to target the right people on mobile is a missed opportunity. But an audience can be defined by a number of different parameters, from simple web behavior to demographics and psychographics. How are respondents defining theirs?

For the most part, web behavior (everything from browser history to clicks and other digital signals) and social media profiles top the list as audience identifiers that are most familiar to respondents (both at 76 percent). The reason is clear: Web behavior and social profiles leave behind the strongest digital footprints and are the most accessible to advertisers (and third parties).

76+0+0+76+0+0+69+0+0+57+0+0+41+0+0+21Web behavior-based

Social-based

Location-based

1st-party CRM data-based

Purchase history-based

TV-viewing behavior-based

75%

75%

69%

57%

41%

21%

WHICH OF THE FOLLOWING TYPES OF AUDIENCES HAVE YOU USED IN THE PAST WITH RESPECT TO MOBILE ADVERTISING?

DIGIDAY | State of the Industry

At the other end of the list, mobile audiences based on TV-viewing behavior are quite unfamiliar to respondents, with only 21 percent saying they’ve used them before. It’s a new data source, which means that fuller adoption will take time, and marketers won’t be in a hurry, since it’s often tangential to their campaign aims. (Of the two groups, however, agencies seem to be more TV-savvy than brands, with 23 percent having used them as opposed to 15 percent of brands.)

When asked how much they valued the various types of mobile audiences, the results are a bit different than usage: Web behavior tops the list (65 percent call it “extremely valuable”) and TV-viewing behavior is still last in line (38 percent), but this time, location-based audiences comes in second (64 percent).

And the potential of a union of mobile and location-based audiences is immense.

08


EVERY STEP YOU TAKE: LOCATION-BASED AUDIENCESAt this time, almost a quarter (24 percent) of respondents use location data to identify audiences in 26-50 percent of their mobile campaigns. A set of about 20 percent might be considered super users, as they bring location into most or all of their mobile campaigns.

So what’s attractive about this data type? Well, mobile devices are constantly on-hand, which makes them the ideal device for identifying your physical context at all times. According to respondents, location data is most effective at identifying geographic segments, but they’re also handy for collecting demographic segments or segments based on purchase-intent.

That last one is crucial for mobile users in proximity of brick-and-mortar locations. “As a local agency with smaller population bases, we found a ton of success… with hyper-local targeting capacity,” said Norford of Spawn. “We’ll have many, many micro campaigns, whether they target a road closure for our state client, an opening for our bank client, or a mall location for a retail client.”32+25+22

+17+6=32%1 - 25%of our

campaigns

21%51 - 75%

of our campaigns

6%0%

of our audiences

17%76 - 100%

of our audiences

24%26 - 50%

of ourcampaigns

WHAT PERCENT OF YOUR AUDIENCE USAGE ON MOBILE INCLUDES LOCATION-BASED AUDIENCES?


Location data isn’t so great at creating segments based on psychographics; over a quarter say it’s not very effective. Psychographics are not so heavily defined or divined by physical locations, and too many triangulations would be necessary when connecting locations to attitudes.

And location data is only due to get more crucial: 69 percent say they’re using more of it in their campaigns than they did last year, and 82 percent expect to use even more next year. Next-year projections are even higher with those who say mobile advertising is critical or important to their company; 90 percent expect to increase their spending. The rise in mobile traffic is spurring a boost in advertisers’ demand for those mobile impressions.

96+0+0+58+0+0+56+0+0+46+0+0+13Geographic segmentation

Behavioral segmentation

Demographic segmentation

Purchase intent segmentation

Psychographic segmentation

Where users live and work

Brand affinities, lifestyle preferences, etc.

Age, gender, income, ethnicity, etc.

Who is ready to buy right now

Attitudes, values, interests, etc.

WHICH OF THE FOLLOWING TYPES OF AUDIENCE SEGMENTS IS LOCATION DATA MOST EFFECTIVE AT DETERMINING?

DIGIDAY | State of the Industry 011

PAIRING LOCATION DATA WITH TOP FORMATSNot all formats have mobile advantages, but location is lending a helping hand to some that might not have a natural edge in the environment.

Search tops the list (46 percent pair it with location data in most cases), a tactical choice given mobile users’ penchant for using search engines to research products while on location at brick-and-mortar stores. Display and rich media ads follow (45 percent), namely due to their ubiquity on the web at large.

Interestingly, those spending more of their marketing budgets on mobile advertising are significantly more likely to more often layer location data onto those two mobile formats.

Social also rates highly (33 percent), given the format’s usual mode of consumption in-stream on mobile devices. Mobile data makes its penetration into users’ lives even more precise. Furthermore, there’s a significant correlation between the percent of a respondent’s mobile campaigns using some form of audience targeting and their frequency of pairing social with location data. “Beyond just ‘geo-fencing’ we are also building audience profiles based on location behaviors and recent places people have visited,” said Liboon from RPA.

Across those formats, agencies’ pairing of them with location data to gain a competitive edge is higher than brands’ usage of the resource, though all parties seem the least interested in a union of native and location. This makes sense, given the nature of native’s reliance on web context for its effectiveness rather than a user’s physical context. It would be a more difficult task to balance the two.

I USE LOCATION DATA WITH THIS CHANNEL/FORMAT IN MOST CASES.47+0+0+33+0+0+41+0+0+29+0+0+3340+0+0+40+0+0+60+0+0+45+0+0+25Display/rich media

Native

Search

Social

Video

47%40%

33%40%

41%60%

29%45%

33%25%

AGENCIES

BRANDS

“


17+59+24+TWHERE DOES THE DATACOME FROM?

Marketers are presented with a pretty clear choice when acquiring their data: Do they pull it from their (or their clients’) own reserves, or do they purchase it from third parties?

Most often, respondents are choosing a mix of third- and first-party audience data. When they do pick one over the other, they’re more likely to use primarily first-party data over third-party data.

Brands are even more likely to make this choice, with 46 percent of them selecting first-party data over third-party data or a mix of the two. It’s an easier choice for them to make, since they have access to much more consumer data, from digital and retail transactions, web behavior on their owned platforms, and more. Agencies simply don’t have this luxury, and as a result, they’re much less likely to go with first-party alone: Only 16 percent went with the primarily first-party option. As Liboon said, “We’ve found many 3rd-party sources of data to be very valuable.”

24%1st-party

59%both

17%3rd-party

ON MOBILE CAMPAIGNS: 1ST-PARTY AUDIENCEDATA OR 3RD-PARTY AUDIENCE DATA?


So what are we talking about when we’re talking about third-party data? Well, marketers have a second choice to make if they go the third-party route: custom segments (tailored to the specific demands of the marketer in question) or pre-packaged segments (based on more widely applicable audience profiles). The bias is firmly toward custom segments (63 percent versus 37 percent who more often request pre-packaged segments). Their audience needs are often too unique or nuanced to be covered by pre-configured audience groupings. 30+0+70+30%

70%

Pre-packaged

Custom

WHICH TYPE OF THIRD-PARTY SEGMENTS ARE MOST EFFECTIVE FOR MOBILE?


Predictably, custom segments also tend to outperform pre-packaged segments, according to respondents, though this is at least in part contingent on usage rates: Those who use custom segments more than pre-packaged segments are bound to find them more effective (and they likely are – for their purposes). The opposite is true as well.

To ensure that the data is being handled properly, respondents are going with managed-service tools more often than self-service options (48 percent prefer them). These are even more popular among brands than agencies, with the number rising to a 58 percent preference. Agencies are likely used to dealing with data first-hand given their media acumen and dedicated internal staff, making them less reluctant to serve themselves.

40+0+60+40%

60%

Pre-packaged

Custom

WHICH TYPE OF THIRD-PARTY SEGMENTS DO YOU USE MOST OFTEN FOR MOBILE?


THE RECIPE FOR GOODAUDIENCE DATA

Of course, regardless of how they’re getting it, marketers want to make sure they’re getting the good stuff. “We look to understand the source of the data and the methodology used to collect it,” said Liboon. “We find out how it’s verified and refreshed. We also ask for case studies, sample reports and other evidence to prove accuracy.” Audience data that points to an incorrect or unresponsive audience is essentially worthless. So what makes data more acceptable?

Topping the list of key criteria are data quality (both its accuracy and its freshness) and the effectiveness of the data in actually driving campaign performance. Both of these factors were widely considered “critical” by respondents.

Audience data is not an end in itself, but the means to an end, particularly campaign success. The message is clear from these results: Without good data and good results, it is impossible to consider any dataset critical, or even valuable.

72+0+0+59+0+0+39+0+0+34+0+0+27+0+0+12+0+0+9Quality of data

Effectiveness of data in driving performance

Ease of access to data

Reach

Price transparency

Ability to buy independent of media

Ability to buy bundled with media

72%

59%

39%

34%

27%

12%

9%

WHICH OF THE FOLLOWING FACTORS ARE CRITICAL WHEN BUYING 3RD-PARTY AUDIENCE DATA FOR YOUR MOBILE AD CAMPAIGNS?


Both of those criteria, however, rate more highly with agencies than their brand peers (likely because they’re often the ones on the hook for a campaign’s success). On their part, brands are more concerned than agencies about their ability to buy audience data both independent from and bundled with their media. It’s easy to see why this isn’t such a sticking point for agencies, as there’s considerably more buying experience and proficiency on their end; they’re in their element there.

The third most important criteria overall is ease of access, a result that speaks directly to the trend toward a democratization of data in the workplace. Marketers firmly believe that they should not have to be data scientists or programmatic pros in order to choose, use, or otherwise benefit from the audience data market.

Reach and price transparency attained what might be considered a third-tier level of importance, but below that, the remaining items are simple nice-to-haves.


CONCLUSION

Inarguably, mobile serves as a lynchpin in these respondents’ marketing strategies. “It is more than just a medium,” said Mach. “Mobile is personal, and thus, the mobile experience is highly regarded.” Mobile spending is expected to rise, usage of audience data seems to be following it and more marketers can be expected to move beyond the test-and-learn phase in the coming months.

But in order for industry professionals to take full advantage of this changing board, they’re going to have to get even better at speaking the language of data. The intricacies of how different types interact with, inform and optimize specific formats and holistic campaigns is a new art that must be honed through some mixture of experimentation and confidence.

Mobile has destabilized the status quo of desktop and brought into the spotlight a crucial element that was getting lost in the shuffle:

The audience.

diiday 02 - digiday.com · sources and sets serve as effective roadmaps to their ... ad spend to...

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