Personalization in Advertising: How to Serve More Relevant Ads
StackAdapt CTO Yang Han describes how dynamic retargeting works, why personalization is so important in today's digital ecosystem, and what lays ahead for the future of personalization technology.
Q: How does dynamic retargeting work?
YH: Dynamic retargeting can identify what a user is browsing for on a webpage, and then in turn use that information to show them a personalized ad.
For example, if a user is looking at flight ticket destinations, an ad can be served that contains the exact destination that user is traveling to including a unique price, image, and other assets in the message (such as: “Fly from Toronto to New York for just $350”).
Q: Why is personalization in native advertising so important?
YH: Each individual is unique. People have different experiences, personalities, expectations, and desires. When it comes to advertising, we ideally want to cater to the individual through content and products that they want and need.
Number one is the message. The message has to be unique to them so that they know what is being shown actually caters to them. Number two is the product. If we personalize the product, we aren't offering the user something they don't need. It's something that they want.
This ensures we are delivering value. If we deliver value to the user by recommending them content and products that matter to them, then they will not feel annoyed or interrupted.
Q: Why do native advertising and personalization go together so well?
YH: Native advertising is ideal for delivering content. With a headline, a description, and an image, it's easier to explain the value proposition to the user. Then leading a user to content allows the advertiser to further explain why what they are promoting matters to the user, rather than shoving something irrelevant in the user's face.
Q: What sort of results have we seen thus far and what do those results tell us about personalization?
YH: We have run dynamic retargeting with a number of brands direct, and they are delivering very high CTRs (1%+) and conversion rates that outperform vanilla retargeting.
Q: What would a marketer be missing out on if he or she chose to forego personalization as a marketing tactic?
YH: What the advertiser is promoting would have the danger of appearing bland and unappealing. It's hard to stand out that way with all the ads that people are seeing, both online and offline. In our tests, the numbers have shown that the rate of clicks and conversions are lower without personalization.
Q: What challenges still lay ahead for personalization in advertising?
YH: Personalization is still a new concept, and it's potential hasn't been fully realized yet. Right now, technology does a good job of customizing things based on actions a user has done before, in a straightforward and systematic way. However, there isn't enough predictive intelligence behind personalization yet. This will be solved with advancements in AI technology that is still undergoing development in the industry.
For example, right now technology is great at recommending me something based on something I wanted to buy, let's say a bike. It may recommend that exact same bike or similar bikes under that category.
However, in the future, predictive intelligence could go a step deeper. For example, if I am a foreign student arriving in Canada to study for the first time, technology should be able to predict that I need a credit card based on my patterns, without me having to browse credit cards and make the obvious signals.
We have to think, how can technology offer me valuable things that I don't already know about? That would be a powerful problem to solve in the near future.