Thought Leadership: Predictive behavioural targeting matures – the future of online marketing

In our latest Media Playground Thought Leadership piece, nugg.ad CEO Stephan Noller describes three areas that will define behavioural targeting in the near future.

Predictive behavioural targeting has matured in the last few years, from being a nice to have add-on to establishing itself as one of the most important components providing efficiency in the online marketing mix.

Particularly in leaner times, advertisers and agencies were more than ever open to optimising their campaigns with targeting. nugg.ad’s activities with German advertisers and agencies alone show that the volume of targeting campaigns has increased twenty fold during 2009!

However, the future challenges that exist for targeting are not becoming smaller, but rather demand further innovation. In particular, I see three areas here that will define targeting in the near future:

1. Digital brand communication of the future

Despite strong demand, predictive behavioural targeting, like the internet generally, was in the first instance used in a response-orientated manner. This was primarily due to the fact that quantitative results of online campaigns, such as click rates or conversion rates, could be measured and optimised to an impressive extent. Now it is plain to see that targeting can and needs to reach more than just the user’s index finger: digital marketing communication needs the click inside the head.

Due to new target group ranges, reliable technical infrastructures and the availability of the necessary bandwidth, it is now possible to deliver wide-ranging branding campaigns and thereby explicitly optimise branding effects. Digital brand management, supported by the large budgets of the conventional media, is within our grasp and opens a new perspective on an evolutionary leap in digital marketing.

nugg.ad recently presented two important elements for the digital brand management of the future, in the form of a branding optimiser and frequency targeting. The branding optimiser makes it possible for the first time to establish the brand affinity and emotional attitude of the user to a brand. As a result, a campaign can be delivered in a targeted manner to the surfer interested in brands or can, in addition, be modified in order to convince sceptical users.

Frequency targeting additionally strengthens the advertising effect of the campaign by delivering advertising material in optimum doses. This means that the nugg.ad system optimises not only the maximum number of insertions, but also solves the common problem of too little contact doses (so-called frequency boosting). In addition, brand performance measurement provides detailed insights into target groups, the attitudes of users to brands as well as the effect of advertising.

A combination of the features described is groundbreaking for high-quality branding campaigns. But these will only really become effective when the mechanisms are used beyond the boundaries of online publishers and ad networks – thus providing agencies with a fitting role.

2. Targeting as a cooperative model

Without a doubt, the future of online advertising is in cooperative models involving many online publishers and ad networks as well as media agencies. Access to the economic commodity that is the target group must be open to all participants in the market. I do believe that targeting can only then develop its full potential when all parties, online publishers, ad networks as well as agencies, make a contribution and meet each other at eye level, while integrated in a flexible platform. This can be introduced in the form of target group knowledge, target group reach, etc.

In the form of an integrated, open system, the industry has a great chance to extend brand performance and digital marketing communication to online advertising, which has, until now, been primarily response-orientated. Branding features and frequency targeting, realised across online publishers and ad networks, fulfil all wishes and needs of the market, such as high net ranges and the opportunity of new budgets for the digital advertising market. At the same time, this model brings all players to the table, complete with their best abilities – the publisher contributes the contact to the audience and introduces content knowledge – and the agency has the opportunity to conduct highly efficient targeting and to incorporate its target group knowledge, without having to operate as an advertiser.

3. Trust and data protection ethics

Predictive behavioural targeting creates relevance and when done well reaches the user emotionally and positively. In numerous case studies, a positive effect for the user could also be proven – clicks and purchases that resulted from targeting mean that the advertising message was obviously more relevant and less of a disturbance. The fact that this added value is recognised, and our technology can emerge from the shadow of monitoring, means that a strict observance of data protection criteria is essential at all times. In addition, trust on the part of the user and also the political committees can only be won by transparency and an openness to dialogue.

By means of solutions such as opt-out and information, users should be given the possibility to recognise the uses of targeting and, where applicable, to remove unwanted cookies. Here, the industry has the responsibility to use the technology in such a way that the trust of the user is not endangered. In our sector, responsibility is particularly called for in situations where limits must be set – limits regarding the inviolability of sensitive segments such as health, political opinions or religion, which should not be allowed as targeting criteria.