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Targeted advertising is a way for marketers to present consumers with ads that reflect their specific traits, interests, and shopping behavior. This is generally done by using customer data to segment audiences by factors such as basic demographics, shopping interests, or browsing behavior, and then creating unique advertisements tailored to each audience segment.
For digital marketers and ecommerce brands, targeted advertising is an essential tool for cutting through the noise of ads that internet users constantly experience, serving personalized content where users will see and engage with it. Targeted advertising also includes retargeting, which further hones ad personalization and encourages customers to continue down the conversion funnel.
Ad personalization has become one of the "Holy Grails" of digital marketing, thanks to its well-documented effects on customer acquisition and retention, click-through rate (CTR), and customer lifetime value (CLV). Targeted advertising allows brands to send different messaging to different consumers based on what the brand knows about the customer. The better a brand can demonstrate that it understands what its customers want and need, the more likely customers respond to advertising and engage with the brand. Research bears out the facts:
71% of customers prefer personalized advertisements.
Personalization in digital marketing can boost revenue by 15%.
Personalization encourages repeat purchases, with 44% of customers becoming repeat buyers with ad personalization.
If a brand's ads are generic or poorly placed, potential customers will notice. Filling a customer's browser with ads that don't speak to their interests or offer something personally relevant will only hurt a brand's perception and reputation among consumers. Conversely, brands can improve their reputation by presenting relevant ads and valuable content to the audiences that are likely to appreciate them. This will help boost recognition with high-value customers and establish the brand with strong brand equity in its niche.
Targeted advertising maximizes each piece of creative and content that a brand publishes to the internet. Generic advertising is low-reward and often costly relative to its concrete benefits, but targeting helps focus resources on the most rewarding audience groups. Paired with basic automation to publish ads that fit each audience segment, targeted advertisement takes much of the legwork out of finding high-potential customers and attracting them to the brand.
Targeted advertisements rely on data already collected about customers, using demographics, interest, and behavior trends to approach consumers the way they prefer to be engaged. Leveraging customer data takes the guesswork out of customer acquisition and reduces spending on users who are unlikely to convert.
Contextual targeting helps marketers place ad content alongside other content that is related to the thing being advertised. Instead of pasting ads all over the web in places that have nothing to do with the brand or the product offered, contextual targeting matches the ad's content with the context in which it's placed. This creates a more integrated experience for customers that helps tell them that your product is related to something they're interested in. An example of contextual advertising would be an athletic shoe brand presenting an ad on a blog about running and training. Typically, marketers will create an ad and associate it with specific keywords, which the ad publisher scans to match with relevant positioning.
Behavioral targeting is similar to contextual advertising but considers user behavior and browsing activity when positioning ads across the web. In this type of ad targeting, you can place ads for customers based on their search or browsing history. Other factors that can shape behavioral ad targeting include links clicked, purchases, time spent on web pages, social media follows, and more.
Geotargeting is an essential tool in a marketer's arsenal, especially for brands that operate regionally or in specific locations. Geotargeting simply directs ads to publish for consumers based on their geographical location. This is also useful for brands that sell a location-dependent product or for advertisers marketing an event in a particular place.
Pro tip: Whenever you launch an ad using AdRoll, regardless of format or type, you can set specific audience locations.
Social media has become a hotspot for advertising and ecommerce business, to the point that many shoppers now prefer to make purchases through social media instead of a brand's website or in a retail store. Social media targeting helps brands leverage consumers' behavior on the web, search engines, and social media sites to present ads that reflect consumer interests. Social media targeting can also be considered a kind of behavioral targeting.
Retargeting is an essential tool for digital marketers because it capitalizes on customers who have already demonstrated interest in or engaged with a brand. It works by associating sets of ad messaging (display ads, emails, social media ads, etc.) with given behaviors when a customer is engaging with a brand online. For instance, a customer who purchases a pair of running shoes will likely be retargeted with ads about other running accessories.
In today's digital marketing ecosystem, customers are so accustomed to seeing ads during the course of their browsing that they often stop recognizing the ads entirely. For that reason, brands need to develop marketing strategies that meet customers where they are with personalized content and messaging that reflects an understanding of consumer desires as they relate to a particular product. AdRoll offers several types of audience targeting features to help you engage with your current and future customers wherever they are online.
Now that you know the different types of targeted advertising, let's dive into how to create a strategy:
Originally published on June 13th, 2021, last updated on June 17th, 2022.