The term "personalization" often evokes bad memories and broken promises from the last technology boom, 10 years ago. You remember when the term was all the rage and marketers promised better customization and increased relevancy in their marketing messages? Well, marketers overpromised and underdelivered, and the idea of personalization revolutionizing the marketing industry just never materialized.
Why has personalization never caught on or become an effective means for advertisers and their agencies to market to customers? Of course the idea of personalization makes sense, especially in the digital world. The potential is there for advertisers to use technology to create thousands of ad variations, and then match data about consumers and preferences to the right advertising messages. Targeting isn't the issue. Online-ad-serving technology is much more advanced than it was 10 years ago, making targeting -- whether it's contextual, geographical or behavioral -- much more effective today. Sure, cost is a factor, but the real issue lies on the creative side.
If agencies want to make personalization relevant again, they should re-evaluate the way they approach the creative process. Advertisers need to make the online environment a more dynamic and interactive experience by enabling consumers to make choices in real time and giving them more control over the content they consume. If consumers are empowered to interact with content on their own terms, they will likely spend more time engaged with the brand.
New market potential
Technology enhancements and the maturation of the online-video industry have created new market potential for the rebirth of personalization. As the industry evolves, advertisers and interactive agencies are constantly evaluating the most effective ways to use various creative elements and video-content variations to successfully reach their desired audiences.
The growth of online video viewing by consumers and the proliferation of TV shows going online demonstrates the market potential for online video advertising. Video advertising in the U.S. makes up only 2% of the online-advertising market but will make up 10% by 2013, according to eMarketer's August 2008 projections.
|ABOUT THE AUTHOR|
Naj Kidwai is CEO of Real Time Content, a leading provider of a personalized online-video-ad-technology platform based in New York City.
Traditionally, online video has been a very passive, linear experience for consumers, and advertisers have targeted them through a one-size-fits-all approach. The concept of personalizing online video shifts the paradigm from contacting the mass market to targeting on an individual level. Audience fragmentation is creating a fundamental need for marketers to make video advertising more relevant, addressable and personalized.Driven by technology
This growing trend toward personalization is being driven by new technology that takes a brand's video-content assets (which tell a linear storyline) and enhances them with alternative creative elements that enable them to appear in different contexts. The video and audio content can be integrated into a number of different technology formats and then segmented and tagged for use in storyboarding. Consumers affect the content that is served to them by providing feedback about their interests based on specific questions presented by the ad.
Agencies that develop this skill will also be better positioned when interactive-TV experiments move into the mainstream. Like online video, some forms of interactive TV enable consumers to influence the content they are viewing. Various companies have successfully applied personalization techniques to broadband cable advertising, and now technology makes it possible to personalize content in the online world.
Brands that already possess repositories of content are sitting on a gold mine that is underutilized. This emerging media platform helps brands with loyal audiences take advantage of that asset and integrate it into their marketing strategy. Brands now have a dynamic way to monetize archived content by customizing story lines and narrative structures in a way the consumer specifies.
Advertisers can deliver a more customized experience for consumers, resulting in greater effectiveness and better return on investment. The result is a win-win scenario for both the consumer and the advertiser. The consumer spends more time with the content that is relevant, while the advertiser gets better monetization opportunities. Recent personalized video campaigns have resulted in more than double the click-through rates and 50% more sales conversions than traditional video campaigns.
Nationwide, a leading U.K. financial-services company with more than $480 billion in assets, recently executed a personalized video campaign to help increase the effectiveness of online advertising campaigns on its website as well as on third-party portal sites. The goal was to generate increased purchase intent through personalization of existing video assets. Consumers who interacted with the ad could experience more than 16,000 different versions based on a broad number of content variants included in the campaign.
The personalized video campaign resulted in a 300% higher click-through rate for product offerings and a 100% increase in sales conversions compared with the standard video campaigns the company had executed. It also resulted in more than 8 million impressions and served more than 100,000 personalized video ads.
A different approach
Personalization isn't replacing the blockbuster 30-second spot anytime soon -- it's just a different approach. Advertising during the Super Bowl or Academy Awards is a great way to reach millions of people to build brand awareness and create water-cooler buzz the following day. Personalization is important, however, when advertisers are seeking a direct-response mechanism that can drive optimal online sales conversions. If you are looking to sell a product, it's natural to think that your conversion rates will be higher if you can target your message based on attributes such as personal preferences, gender, race or geographic location.
Now that we have the technology that delivers on the promise of personalization, agencies have no excuse not to find innovative ways to give their clients personalized campaigns to increase results and spend their media dollars more efficiently. As consumers take more control of the content they are viewing, agencies can make static campaigns work harder and deliver even better return on their clients' investment.