A recent study of eBay ads found that digital brand search ad effectiveness is overestimated up to 4,100 percent. A similar analysis of Facebook ads yielded a number of 4,000 percent.
If those high figures make you wonder if you are wasting far too much of your company’s advertising dollars on targeting the wrong audience, Dr. Jorge Barraza, professor of applied psychology at the University of Southern California, can offer you some solace on doing precisely that.
He agrees with current research findings that many digital advertisers spend too much on targeting an already loyal customer base rather than tapping into new streams. But take comfort. He has a plan to help advertisers reach consumers that would not normally buy their products.
Barraza advocates using the principle of contextual alignment to help companies make the most out of their digital ad spending. His expertise in the psychology behind costly decision-making positions him to know a few things about how digital advertisers can connect with new consumer bases.
Barraza’s work focuses on the neurophysiology of emotional states and decision-making and motivations of costly behavior. He argues that contextual alignment is integral to consumer engagement with new brands.
“We found that contextually aligned ads were 93 percent more memorable than misaligned ads…there is a clear benefit to aligning ads with congruent content, rather than simply placing ads where there are larger audiences,” he told CRM Buyer.
Studying the Studies
Much of what Barraza’s own research confirms is that two principles of traditional advertising do not work reliably well for the rising tide of digital advertising taking place today. In fact, his research puts a pin in the bubble inflated by typical ad sales folks. Two pins, maybe.
Those two bubbles form the basis of advertising jargon and sales rules known as “lift” and “conversion rate.” The explanations are simple. Marketing representatives sell ads with the premise that they will generate behavioral change in buyers called lift. Ad sellers gleefully point out how the sales number increase after customers viewed the display ads, a process called conversion rate.
Barraza last year participated in a specialized research project testing the effectiveness of contextual ads. That research was partnered with Channel Factory and USC’s Applied Consumer Psychology department to survey 354 respondents. The goal was to better understand brand awareness lift and attributes such as shareability, engagement, entertainment, credibility, and believability that contextual alignment creates.
In addition to the significant increase in brand awareness, the study also found that consumers are more likely to consider a brand (4.11 percent) and share (3.24 percent) contextually aligned ads compared to misaligned ads.
All of the research shows a clear benefit comes from aligning ads with congruent content rather than just placing ads where larger audiences congregate, according to Barraza.
Though not involved in any of the psychological underpinnings Barraza’s research unraveled, Callum Campbell, CEO of enterprise commerce automation company Linnworks, finds those results make tremendous sense. It connects to the notion of the need for an effortless economy in the wake of the shopping shift the pandemic is causing.
That shift places more demand from consumers on direct-to-consumer shopping fed by digital advertising. It provides another outlet, he told CRM Buyer.
“So as more brands go direct-to-consumer, they need to sell on their own web store as well as on marketplaces. They also will need to be on social outlets. Brands will be going after customers for different types of experiences on those platforms,” he explained.
This new process, and the success of digital advertising, will impact digital ad spend. They all form part of that holistic strategy, what commerce platform purveyors call total commerce, Campbell said.
“The idea that different channels serve a different customer need and maybe the same customer in a different environment with a different type of posture towards a purchase,” is key to generating better digital ad spend.
Barraza’s area of expertise is the intersection of emotion neuroscience and decision making. Much of the work he has done has focused on consumer behavior.
Knowing how brands communicate to audiences, particularly those audiences that are changing behaviors for their new targets for them. In the process, you see a lot of habits changing. So people are either being introduced to new companies, products, or brands, or they are capable of rethinking about them in certain ways, he explained.
“Advertisers are spending too much time targeting the wrong segment of the audience. We are targeting people who already are tuned into the product, and they (advertisers) need to change the approach on how they are marketing,” said Barraza.
The new field of digital study, in essence, needs to focus on what can advertisers do to get the synapses in the brains of their target audiences to tune into what they are not tuned into. Typically, marketers have only a few goals potentially in mind: to form an opinion of that audience, change an impression for that audience, or to be top of mind, he noted.
“So, in either of those cases involving the elements of attention, memory, and emotion, when advertisers are retargeting in the digital space there has not been much attention to that,” Barraza added.
Refine the Tests
The kinds of tests marketers still use for digital ad effectiveness come from the non-digital knowledge experience. They commonly involve A/B tests where you just throw out content and see how many clicks they get, according to Barraza.
“Well, if you are forming those kinds of advertisements and selecting the advertisements by the number of clicks they get, basically it is getting the clicks from the people who are already selecting those things,” he said.
Instead, what you need to do is really track different data, not in terms of the number of impressions they get in total, but the number of novel impressions things are getting, he countered. This means determining if you are reaching new markets with these particular marketing approaches.
For instance, find out if an advertisement might actually be better when it has fewer impressions, but those impressions are reaching new markets, new sparkling segment groups that may be interested that you failed to reach before with that kind of classical approach, explained Barraza.
Ad Spend Assessment
Marketers should keep in mind certain key questions when they aim their digital ads for the right recipients. Oftentimes they should not target people that do not need to be targeted. Whenever you’re going after new audiences, there should be clear goals in mind.
Barraza suggested this list of things on which marketers should focus when they are targeting your digital ads:
- Are these new audiences?
- Are these people who do not purchase from you or people who do not know of you?
- Are you forming an opinion, or forming an attitude towards your brand or product, or are you changing impressions?
- Is this a group that really is not engaging with you and the brand because they do not have you at top of mind?
Barraza also recommends asking yourself if your digital ad resonates in a way that this audience needs to be engaged. The viewers may be emotional, or the ad can suggest the kind of relationship you want to build with them.
“Getting people’s attention is difficult in this age, and really getting attention may be about resonating with the audience in a particular fashion,” he concluded.