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After studying this section, students should be able to do the following:
TargetingDefining who customers are in order to increase the cost-effectiveness of advertising. increases the cost-effectiveness of advertising. Most advertising channels have a cost that is a strong function of the amount of exposure (e.g., the number of people who see the ad) regardless of whether audience members are potential customers or not. Targeting helps define who the customers are. This section explores how the advertiser can:
In 2007, Japanese auto maker Suzuki began aggressively targeting a new segment: female car buyers in India who now have the income to buy their own vehicles due to India’s economic boom. The carmaker’s Zen Estilo (Estilo means “style” in Spanish) sells for less than $8,000 and comes in eight colors, including “purple fusion,” “virgin blue,” and “sparkling olive.” For a more modern look, Suzuki gave the car a two-tone dashboard and a front grille design that makes the little car look like it is smiling. Style-conscious drivers can also add rear spoilers, side skirts, and extra colors to the body. Many of Suzuki’s foreign competitors ignored this market because they chose to focus on selling mid- to high-end vehicles.Eric Bellman, “Suzuki’s Stylish Compacts Captivate India’s Women,” Wall Street Journal, May 11, 2007, B1.
While a lot of readers visit msnbc.com, not all are News Explorers. Remember, the News Explorer is the target that msnbc.com and SS+K determined was the best target for the branding campaign.
The STP process is evolving rapidly as new advances in technology enable advertisers to identify and reach consumers where they live, work, and especially surf (online).
Today, companies define and manage finer and finer segments. In the past, segments had to be broad because it was difficult to reach finer-level segments and because such fine-grain data were not available. Now, companies can process terabytes of data on customers, and new ad channels (such as keyword advertising on the Internet) allow companies to reach smaller segments, down to segments of one (yes, like you).
These three factors fuel the accelerating trend of targeting small, very well-defined segments:
Behavioral targetingPutting ads in front of people customized to their Internet use. refers to putting ads in front of people customized to their Internet use. It’s become fairly easy for marketers to tailor the ads you see based on prior Web sites you’ve visited. The logic is inescapable: you’re more likely to respond (and probably appreciate) an ad for an idea, product, or service that’s relevant to your needs.
Obviously, privacy concerns arise as advertisers learn more about the sites we visit. But many consumers seem more than happy to trade off some of their personal information in exchange for information they consider more useful to them. More than half of respondents in one recent survey said they’re willing to provide demographic information in exchange for a personalized online experience.“Consumers Willing to Trade Off Privacy for Electronic Personalization,” Marketing Daily, http://www.mediapost.com (accessed January 23, 2007). While the ethics of gathering personal information are still being evaluated, behavioral targeting is the next frontier for many advertisers.
Starwood Hotels increased its spa business when it used behavioral targeting.
© 2010 Jupiterimages Corporation
Behavioral targeting allows advertisers to identify our consumption practices so that they can tailor ads to our precise interests. They argue that this technology increases efficiency, saves money, and reduces advertising bloat because we won’t be bombarded with commercial messages for products we don’t want. On the other hand, critics of this practice argue that we’re “making a deal with the devil” because we’re giving companies access to our personal behaviors. This controversy has surfaced on Facebook, which is now sharing data about users’ online behaviors with advertisers. What is the current status of this conflict? How can advertisers do a better job of targeting while respecting the privacy of consumers—especially those who don’t want to be targeted?
Targeting the msnbc.com User
SS+K was charged with two goals for the new msnbc.com campaign: increase the number of unique viewers who visit the site, and increase the number of clicks per visit among current msnbc.com users.
To refine their understanding of how to develop the msnbc.com proposition, SS+K enlisted the aid of Energy Infuser, a market research company in Chicago that specializes in unearthing consumer insights through qualitative methods such as focus groups, projective techniques, and consumer diaries. A number of “triads” (groups of three consumers) were recruited and agreed to offer their time and consumer experiences of online information seeking. Through analysis of the group’s transcripts, the SS+K team developed a better sense of why a user might choose msnbc.com over other options: relative to competitors like bland news aggregators and “cold” and “serious” CNN.com, msnbc.com virtually sparkled with energy and personality. The site was inviting for users who enjoyed browsing for news and tidbits, including lighthearted information on entertainment, fashion, and sports.
Michelle Rowley: The Research Epiphany(click to see video)
Choosing One from Among Many: Target Defined
Michelle describes consumer insights and how one triad participant helped to clarify just who the client’s key user is and how the brand should speak to its target.
You can see media coverage of consumer focus groups at Energy Infuser here: http://www.energyinfuser.com/video/InfuseronNBC.wvx).
Ultimately, the target audience—now called the News Explorer—reflected observations about the typical msnbc.com user and what the site had to offer that set it apart from its primary competition. The profile was developed in dialogue with consumers through research approaches and, finally, through negotiation of research findings among client/agency team members.
Targeting is the process of selecting the customers whose needs you’re likely to satisfy. Targets need to be easily identifiable and measurable. As technology continues to develop, behavioral targeting that allows advertisers to customize messages and products to the needs of each individual will become a more central part of advertisers’ strategies.