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June 30, 2021

What is Ad Personalization and When Should You Use It?

As user data becomes more and more prevalent, ad personalization is becoming an effective way of getting the right ads in front of the right people at the right time. However, digital marketers need to be mindful about when to use ad personalization.

What is Ad Personalization?

Ad personalization is the process of using data to predict who a viewer is in order to deliver a more relevant ad to that individual. To determine the best ad for individual users, marketers use data points such as customer wants and needs, geolocation, demographics, interest, buyer’s intent and behavior patterns (i.e. website page visits).

Alternatively, regular or static ads rely generally on a user’s search query. For instance, static ads serve to any and all searchers who are typing in a specific term or keyword string. Because these ad types don’t use any of the above data points, there is no way to control who sees the ad or what ad variant is served. While static ads are still effective to a degree, pairing this type of ad with additional data will ensure it is only served to the users with the highest intent and improve your results.

Coined by Instapage, “ad personalization” can be broken down into a 6 level classification system:

  • Level 0: Need or want paired with a broad geographic location (i.e. country, state)
  • Level 1: Need or want paired with a specific geographic location (i.e. city)
  • Level 2: Need or want paired with micro-geographic location (i.e. zip code) and piece of demographic information (i.e. age or income)
  • Level 3: Need or want, micro-geographic location, demographic information and general individual interest (preferences, skills, technology, etc)
  • Level 4: Need or want, micro-geographic location, advanced demographic information (political party, favorite brands, vehicle), specific niche interest (job titles, company size, etc.) and buying intent (search term)
  • Level 5: Need or want, exact geographic location, advanced demographic information, specific niche interest, buying intent and historical behavioral patterns (search history, buying history, website pages visited)

Ad retargeting (or remarketing) is one of the most common forms of ad personalization.  These types of ads leverage user behavior by capturing which pages, products or website events (i.e. button clicks) individuals engage with. By capturing this type of information, marketers are able to tailor their advertisements based on a customer’s or prospect’s interest. For example, if a user visits your website looking to purchase a camera and they make it all the way through the process up until cart checkout, marketers are able to then push that specific user personalized ads in order to remind/incentivize them to finish their purchase.

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The Benefits of Ad Personalization

Ad personalization is beneficial for brands in many different ways. For instance, personalized ads generally have a higher click-through rate and conversion rate because messaging and offers are tailored towards the individual as opposed to the masses.  

As ad engagement increases, brands are able to achieve a lower cost per acquisition and gain a high return on ad spend for their efforts. Additionally, according to Smart Insights, 72% of customers said they only engage with ads that exhibit some instance of personalization. It’s clear that if this trend continues, companies and marketers who do not leverage ad personalization will soon be left behind by their competitions.

When To Use Ad Personalization

Ad personalization is a great strategy for improving the performance of your ads. However, it should only be used when you can support it with the proper data and reporting.  Additionally, marketers need to be careful that ads don’t go from personalized to creepy when they’re using this strategy.

In order to start with ad personalization, first you need to make sure you have selected the ads platform you want to leverage and have all the necessary tracking pixels placed on your website. From here, you are able to begin collecting the necessary data to leverage the personalization classifications above. 

When you’ve done the necessary tracking setup, you need to ensure the user data you are collecting meets the minimum audience size requirements for your advertising platform. If you create too niche of an audience within your platform your ads won’t be able to be served.

Once your audience is built, you're ready to start serving your personalized ads to prospects and repeat customers. However, before running your personalized ad campaigns, you need to ensure that you’ve generated the necessary ad designs and messaging to speak to the specific audience variables you are targeting.

Steps to get started

  1. Determine which data variables you are going to use in order to structure your personalized ads. For example, funnel stage, where they live, pages they’ve visited on the website.
  2. Determine the intent of the ad and what the most effective messaging/conversion intent will be. For example, if a user visits your website and views a specific page or product, it may be beneficial to send them an ad that drives them back to that conversion point or product page.
  3. Determine how to measure the success of your campaigns. If the goal is to drive as many viewers back to a specific page, you’ll most likely want to measure clicks and page views. However, if your goal is to drive product sales or form submissions, you’ll want to use conversions or perhaps return on ad spend as your main KPI.

The Takeaway

Ad personalization can be a great way to get highly relevant content, web pages, products etc., in front of the right people at the right time. However, before jumping into your campaign you should always determine what data variables will be the most impactful to collect and what designs, messaging and conversion points will resonate with your audience.

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Rider Gordon

Rider Gordon is the Lead Search and Paid Social Advertising Strategist at New Breed. In his free time, he likes to ski, fly fish and brew beer.

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