11th of September 2017

Published by MediaPost See original article

Is Programmatic Advertising Endangering Your Brand?

When programmatic advertising arrived on the scene a few years ago, it seemed like a holy grail. Many marketers thought their prayers had been answered by these demand-side platforms (DSPs) and their algorithms. If you can figure out who’s the most likely — and most ready — to purchase your brand, and deliver ads to them (and only them), what else could you need?

Quite a lot, as it turns out.

The law of unintended consequences tells us that our actions always have effects that are unanticipated or unintended. Rarely is this as clear as in the case of targeted ad buys.

The first hazard is the money brands lose by hyper-focusing on consumers at the bottom of the purchase funnel. If you’re so intensely targeting only those who are primed to purchase right now, how are you filling the top of the funnel with new people who will be ready to buy from you later — or who might buy from you occasionally? No brand has the luxury of neglecting to produce desire in potential future consumers. As advertising researcher Prof. Byron Sharp, director of the Ehrenberg-Bass Institute for Marketing Science says: “If you concentrate your marketing on your current customers, then you hem yourself into an aging and shrinking segment.”

This highlights a hidden advantage of untargeted ads: You’re bound to build awareness and desire among those who aren’t yet ready to spend with you – or don’t know they are. Sharp’s analyses of CPG and other databases suggests that there is far greater potential to be gained from getting non-users or infrequent users to buy your brand once in a while than there is in trying to wrest yet another purchase out of loyalists.

Read the full article on MediaPost.

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