Location Still No. 1 When it Comes to Digital Marketing Spend
JPMorgan Chase is a big company and a household name. Last year, it learned that only 3 percent of websites it was placing ads on were leading to activity beyond impressions. JPMorgan Chase was running ads on 400,000 websites; now it's down to just 5,000 and it's seeing the same results. But how, and why? Something changed when companies started transitioning to digital. They stopped paying attention to where ads were placed, and focused almost exclusively on audience-based targeting. Now, savvy companies like Chase are realizing there's another, possibly more important, piece to this equation.
Location is Still Everything
While “back in the day” marketers relied heavily on location when talking about where to put a billboard or a physical store, now the majority of marketers fail to consider location online while targeting display. Have you ever been browsing a fishing site and see an ad for women’s apparel and wonder, “why in the world are they targeting me HERE?” Marketing Week says that only 9 percent of display ads are viewed for more than one second. For a CEO, this screams “wasted money.”
What if your search ads were that irrelevant? You would probably think Google was broken if you searched for “water bottles” and it showed you a bunch of results for used cars. So why should advertising be any different? CNBC reports that 58 percent of consumer packaged goods ads, and 51 percent of shopping and retail ads aren’t reaching the right audience. You wouldn’t see a billboard for a new convertible while driving through Alaska mid-winter, so why would you want to see something so irrelevant on the websites you’re visiting? And if you’re thinking that you’re getting some traction from those not-a-fit websites, I have some bad news. MediaPost says that 60 percent of website banner ad clicks are accidental. That means 60 percent of the people coming to your website from an ad don’t care about your product at all. In fact, 36 percent of ads are “run in places no human will ever have the opportunity to see.”
Put Your Focus on the Right Funnels
Marketers know all about marketing funnels, and spend a large amount of time deciding which funnel to focus on. Change your way of traditional thinking and consider display not just as part of the marketing funnel, but as its own funnel altogether. When done properly, display ads can be used for top-of-funnel awareness and last-click conversions. Thinking about display in this way helps marketers understand the larger network effect as it relates to the marketing funnel.
Design location targeting to map to your display funnel — the top, middle and bottom. Be pessimistic at the bottom and even middle of your funnels, but optimistic at the top. Websites that convert should be moved to your whitelist for bottom and middle. The problem is that most of the websites you should be using are outside your scope of view.
How Do We Fix This?
Targeting the right customers online is only half the battle. To achieve the highest return on investment, marketers must go beyond simply knowing who to target. Targeting where customers buy online, plus knowing your target customer yields massive lifts in revenue.
Location matters MORE than audience because it represents intent. Start by identifying the right location. Use audience insights, an artificial intelligence-based customer acquisition platform, and a little bit of common sense. Then, identify the right location. Fueled by AI, leveraging a software platform to help acquire customers will help you better understand the “network effect” and make better decisions with your marketing dollars.
Knowing where you’re putting your marketing dollars and having a fluid, not static, marketing plan is the key to increasing performance and cutting wasted spend. Savvy marketers understand this and realize they must leverage new technologies and AI to ensure they're reaching the most highly qualified consumers, when and where those consumers are ready to engage or purchase. By doing this, they're not only eliminating wasted marketing spend on non-converting ads, but are also finding new prospects and growing market share. Quality traffic delivers incremental results and leaves sellers and consumers in a much more desirable place.
Shawn Schwegman is the co-founder and chief strategy officer at DemandJump, a customer acquisition platform that enables marketers to find new customers with precision by locating prospects three steps before they reach you.
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Shawn Schwegman is the Co-Founder and Chief Strategy Officer at DemandJump. Shawn has previously worked with Overstock.com, ChaCha, Sally Beauty, Target, NewEgg, eToys, Cisco, Costco, and more.