Maximize Campaign ROI with Predictive Targeting
With all the ‘smart’ technologies and the recent release of other advanced tools and programs, it’s becoming harder to keep up. Especially for small or medium-sized businesses who have a very specific budget to spend on marketing, where do you focus your attention?
Today, we want to discuss predictive targeting. We all know spending on marketing is useless if it doesn’t bring a return, so we’re going to look into predictive targeting and see whether it provides a solution for optimizing costs and growing your business.
What’s Predictive Targeting?
When we look into data and metrics, we’re usually reviewing what’s already happened. With predictive targeting, we’re assessing things like consumer data, statistical algorithms, AI, and machine learning to predict what COULD happen in the near future.
By looking at consumer behavior, we can leverage data and anticipate what will happen with market trends. With this knowledge, it’s possible to adjust our sales strategies and optimize our marketing spend.
Example — When an individual buys a new home, this isn’t the only expense that occurs. Rather than just buying a home and moving in, they also consider things like furniture, electronics, renovation, kitchenware, and bathroom accessories. For new homeowners, we can predict that their spending in these areas will increase. Can we get in front of them and win them as a customer during this transitionary period?
Of course, the changes goes beyond this too because, depending on how far this individual has moved, they’re setting up a whole new life in their home. As well as buying items for the home, they might look for a new gym, cleaning service, gardening team, hair salon, and more.
Rather than aimlessly sending out marketing campaigns, we can use AI to predict the audience to which campaigns are sent. In some cases, we can do this before the consumer even needs our products. Suddenly, we have a head start and we’ve established some groundwork. All that’s required is for them to complete their search, find our brand, and become a customer.
Benefits of Adopting Predictive Targeting
Since we marketers are always trying to optimize costs, we’ve laid out exactly what you need to know when considering whether or not to add predictive targeting to your campaign strategy.
1. Growing Intelligence
The technologies surrounding the artificial intelligence marketing industry are only growing stronger and more intelligent. These days, AI can watch consumers and their behavior in order to forecast accurate predictions. For those wondering why a human can’t do the same equally well, it’s all in the timing. Why spend hours assessing various data points when a machine can do it within seconds? What’s more, AI removes the risk of human error.
We need only review the practices of Netflix and Amazon to see the effectiveness of predictive analytics. Using cluster models to segment audiences, they up-sell and cross-sell by delivering content that’s relevant to every individual customer.
If we stick with the new homeowner idea, machine learning is able to create connections between the behaviors of consumers and products. If someone is looking online for new curtains, they’re likely to come across ads for carpets, lamps, and other decorations for a room. Why? Because machine learning has predicted that they’re decorating a room and will need other products too.
Again, this is something you could do yourself; you could think about related products and keyword groups, but why waste the time when there are specific tools that can do it quickly and accurately?
As the intelligence of AI and machine learning continues to grow, we can anticipate the needs of consumers and deliver ads that boost sales and click-through rates.
2. Big Data is Challenging
With every move a prospective consumer makes online, they leave data and opportunities for us to learn from. Whether it’s engaging with posts on social media, using location services and checking in to businesses, giving permission for apps to collect data, or just browsing the web, they’re leaving a trail of data for us to follow.
This is fantastic… if you know what to do with it. Otherwise, it’s overwhelming and difficult to learn anything. Back in 2017, a Forrester research paper showed that nearly two-thirds of all marketers were concerned about the fact that their data came from too many sources. As a result, they didn’t know how to make sense of it and make an actionable plan.
Even if you are able to gain valuable insights from all this data, the question remains whether you can do it within the appropriate timeframe. In the end, most small businesses would rather invest in AI and machine learning to maximize campaign ROI.
With the right predictive advertising model, the more data, the merrier.
3. Optimize Costs
Whether it’s the Nielsen Digital Ad Ratings service or another marketing report, it’s no secret that we’re wasting billions of dollars in advertising. Here are three of the main problems:
• We target the wrong audience (people who have no interest in our brand or products)
• We reach the right people but at the wrong time
• We spend more than necessary just to generate a lead
With more refined targeting and real-time bid adjustments, predictive advertising is a brilliant solution for increasing ROI. If we look at the automated bidding platform from Google as an example, marketers can leverage data from their network (and even from competitors) to adjust bids. What’s more, the bids are adjusted with a particular goal in mind; this could be conversions, site visits, clicks, or exposure.
Once you introduce predictive advertising, you move from the one-dimensional goals of automated bidding to concentrating on the most important KPIs. You’re getting in front of customers before they even search for a product of your type. Less of your budget is wasted, and you can witness the improved ROI as I rolls in.
4. Proactive Rather Than Reactive
Most businesses follow, the best lead. When you react to changes in consumer behavior and trends, you’re always going to be late to the party. If you can anticipate where the market is going and take a proactive approach, you’re ahead of the competition and ready to take advantage when the consumers eventually start rolling in.
With Facebook, the Lookalike platform is the perfect example of being proactive with your marketing approach. Rather than targeting existing leads, it’s all about finding people who haven’t come across your brand in the past. As time goes on, you can continue to leverage data and get insights into what consumers will need in the near future.
Read More: How to Use Facebook Lookalike Audiences
5. Targeting Micro-Moments
As we all know, we’re living in a time when consumers are demanding information immediately. For marketing, this has made it difficult, especially considering the rise of smartphones. These days, people can show intent in a product and then buy within minutes. Suddenly, our ads are reaching them after they’ve already bought the product, and this is a wasted opportunity.
Since this has become a huge problem in marketing, Google has given it a name and we call them ‘micro-moments’. In total, there are four for consumers;
• I want to KNOW
• I want to DO
• I want to GO
• I want to BUY
But they’re making these decisions so quickly, how do you capitalize before it’s too late? Through automation and predictive targeting. As you anticipate customer needs before they even search, you’ll be in place for when they show intent. Just as we discussed earlier, you’re proactive and will be rewarded when the consumer finally does search. With a reactive approach, it’s too late and they’ve decided on another option.
Of course, we can’t necessarily predict all micro-moments; for example, it’s impossible to know that a car will break down or that somebody will need a last-minute appointment for a haircut. With these sudden searches, we need to analyze the available data in real-time and predictive advertising technologies can help here. With machine learning, we make judgements based on location and intent before sending relevant ads.
Since all of this is done behind the scenes, the marketing team will get leads with little effort.
Predictive Advertising is the Future
To top it off all of these advantages, predictive targeting is also cost effective for businesses of all sizes. For these reasons, it is here to stay. More businesses are adopting predictive targeting, while the tools simultaneously become more efficient. With the right tools, you can make sense of big data and get your name the exposure it needs when customers make the searches you expect.
Bonus! Marketing Tools:
2. Bilbi AI: Daily Marketing Campaign Insights
Don’t follow this year, lead. Be proactive in your approach, leverage data, and anticipate changes in consumer behavior and trends. The proof will be in your ROMI.
