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Solving the Cross-Platform Targeting Riddle: A Forrester White Paper

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Solving the Cross-Platform Targeting Riddle: A Forrester White Paper

  1. 1. Headquarters Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA, 02140 USA Tel: +1 617.613.6000 • Fax: +1 617.613.5000 • www.forrester.com For Marketing Leadership Professionals Why Read This Report As consumers increasingly embrace personal mobile technologies, the third-party cookie, the most prevalent desktop-based targeting mechanism, is showing its limits at identifying and addressing your target audience — let alone at reaching the same user cross-platform. Today’s targeting challenge for marketers is threefold: 1) reliably identifying, in a persistent manner, an individual consumer; 2) reaching that consumer across an ever-increasing number of devices and platforms; and 3) partnering with vendors whose infrastructure is still built around traditional targeting mechanisms. Read this report to make sense of today’s cross-platform targeting ecosystem, understand the pros and cons of each targeting type, develop your own plan for cross-platform user targeting using this knowledge, and determine where you want the ecosystem to improve — and fast — to meet your specific targeting needs. Solving The Cross-Platform Targeting Riddle Why Marketers Should Not Be Satisfied With Today’s Mechanisms For Targeting Individuals Across Platforms — And What They Can Do About It by Joanna O’Connell with Luca S. Paderni, Samantha Merlivat, and Collin Colburn August 23, 2013 evolving consumer behaviors reveal flaws in TRADITIONAL TARGETING In the past few years, increasing adoption of tablets, smartphones, and other connected devices has driven the growth of perpetually connected consumers (PCCs) in every part of the globe.1 Forrester defines the perpetually connected consumer as one who owns and personally uses at least three connected devices and accesses the Internet multiple times a day from multiple physical locations, at least one of which is “on the go.” Through their everyday actions, these consumers are changing the terms of their relationships with marketers, demanding greater relevance in every interaction. ■ Perpetually connected consumers are mainstream. In the US, by the end of 2012, 42% of online adults met the Forrester definition of PCCs, up from 38% in late 2011.2 Globally, Forrester predicts that by the end of 2013, close to half of online adults will be perpetually connected. This opens up the opportunity for marketers to address consumers at any time and in different contexts and, at the same time, poses a challenge, as interactions at each touchpoint need to be more data-driven and targeted to be relevant. ■ PCCs value utility, personalization, and relevance. These types of consumers want to be addressed by content designed around their needs and wants.3 Forrester’s Mobile Mind Shift Index estimates that 22% of consumers now demand mobile utility: They expect any desired information or service to be available on any appropriate device, in context, at their moment of need.4 These expectations call for individual rather than segmented marketing. Marketers need to develop the ability to recognize and target individual consumers, on whichever device they use, at any point in time.5
  2. 2. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 2 © 2013, Forrester Research, Inc. Reproduction Prohibited August 23, 2013 Cookie-Based Targeting Falls Short In The Multiplatform Era The cookie, a tiny piece of code associated with a computer’s browser and originally designed for very basic desktop functions, has become the core underpinning of much of the audience targeting done today. Our 15-year relationship with the humble third-party cookie is finally showing signs of strain, however, in an increasingly mobile — and privacy-aware — world, throwing the door wide open for alternative solutions. But in the current state of limited market adoption and with new technologies still in early stages of development, there remains no clear winner in the multiplatform targeting game. The three primary options available for user targeting, whether within one channel or across several, are cookie-based targeting; person-based targeting; and inference-based targeting, and each has strengths and weaknesses (see Figure 1 and see Figure 2): ■ Cookies are the most scaled targeting option but the least accurate across platforms. Cookies, typically belonging to third parties such as DSPs, ad networks, or targeting vendors, are a powerful targeting tool for desktop-based audience targeting — they are nimble, easily deployable, scalable, and widely available. Third-party cookies fall significantly short, however, when asked to bridge the gap across a user’s desktop and her mobile device(s), facing serious limitations that hamper their utility for multiplatform marketers. Here’s why: 1) Mobile OS platforms are more plentiful than their desktop counterparts and often block third-party cookies by default, as Apple does, and 2) just as in the desktop world, cookies are specific to a browser — they do not travel across devices, making it very difficult to link a mobile user to her desktop persona. And while first-party cookies address the cookie-blocking issue, they are not immune to the cross-browser problem. ■ Person-based targeting brings the highest accuracy at the expense of reach. A whole host of companies have collected personally identifiable information (PII) about users for a variety of reasons: Yahoo creates and maintains users’ email addresses; Apple has customer phone numbers; and marketers have databases filled with customer (and sometimes prospect) data.6 These persistent, user-specific data points can serve as a “key” to identify, map, and ultimately target a given user across channels, formats, and devices. Person-based targeting has a highly promising future but struggles today with: 1) access challenges — marketers must either own the PII “key” directly or find partners that are willing to share it; 2) scale issues — there are simply fewer person-based profiles than cookies today; and 3) privacy concerns — there is a risk of privacy infringement if this is not handled with extreme care. ■ Inference-based targeting shows promise but remains limited in utility and adoption. Several companies — such as BlueCava and Drawbridge — have staked their fortunes on statistical inference to make accurate guesses about both an individual device and that device’s relationship with other devices, using a range of data points about the devices themselves, the user’s browser(s), and more. Other vendors, including several in the data management platform (DMP) space, are aggressively exploring this option, having run into the limitations of the third-party cookie firsthand.7 This method also shows promise but faces very real issues today,
  3. 3. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 3 © 2013, Forrester Research, Inc. Reproduction Prohibited August 23, 2013 including: 1) very limited scalability relative to other options; 2) criticisms about its accuracy; and 3) an air of privacy-unfriendliness — particularly in marketers’ confusion about persistent device-based versus more ephemeral inference-based targeting — that scares many marketers. Figure 1 Marketers Can Choose Among Three Primary Targeting Options Source: Forrester Research, Inc.92561 Cookie-based A small piece of data stored in a user’s browser by a visited website to help the site recognize that browser in the future. There are two types: • Third-party cookies — associated to third-party domains, e.g., a DSP • First-party cookies — associated to the host domain, e.g., the brand website Person-based Inference-based Relies on personally identifiable information (PII). PII is information that can be used on its own or with other information to identify, contact, or locate a single person or to identify an individual in context, such as physical address, phone number, or email address. Relies on statistical inference based on one or more parameters to make a strong“guess”about a unique user. These can include device, cookie, and browser characteristics. What it is: Figure 2 Each Targeting Method Presents A Different Set Of Strengths And Weaknesses Source: Forrester Research, Inc.92561 Accuracy Third-party cookie-based Inference- based Person- based Scalability Persistency Ease of deployment Privacy Display Mobile Cross-channel Performance Strong Moderate Weak Platform
  4. 4. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 4 © 2013, Forrester Research, Inc. Reproduction Prohibited August 23, 2013 marketers need to shift from audience to relationship management Current targeting challenges, however, mustn’t be taken as an excuse not to pursue more targeted communication. It’s time for marketers of all stripes, not just the customer relationship management (CRM) team, to embrace the idea of relationship management — continuously endeavoring to positively engage with users across the customer life cycle from acquisition through retention — and use that to drive their broader approach to targeting. Mastering the consumer data flow (gathering it, making sense of it, and applying it) is the key to this novel approach. In a targeting environment still lacking the perfect solution, successful marketers should enrich their arsenals with new tools and techniques, with the goal of developing new ways to begin and maintain conversations based on high relevancy and a compelling value exchange. Build Your Way Into Data-Driven Relationship Management Marketers who are serious about starting the journey toward more granular multi-touchpoint targeting and, ultimately, relationship management, must look for every opportunity to gather and store user-level data for future targeting purposes. This can come from a variety of first-, second-, and third-party sources: your own website, your offline database, direct publisher relationships, and external vendor data that you license. Marketers leading the charge here are: ■ Deploying a DMP to unify their data-gathering efforts. The past twelve months brought an explosion of interest in DMPs from marketers explicitly looking for a more unified mode of data collection and targeting. With the help of DMPs such as BlueKai, companies such as HP are now capturing a wide range of previously unknown data points on site visitors to use in their site and ad-based targeting efforts, with a long-term goal of making every communication relevant. Unsurprisingly, major advertisers are pushing their DMPs to solve for cross-platform challenges, leading DMP vendors to invest innovation and release new features to address this. ■ Taking advantage of publishers’ direct control of first-party consumer relationships. Premium publishers know that their ability to connect with consumers via their content across platforms is a highly valuable asset. As Lori LeBas, the SVP of business operations, sales, and marketing of ESPN, notes, “Measures are available to publishers like ESPN to target a verified audience (across devices), but few marketers today are ready to pay the price premiums associated with these techniques.” As DMP adoption is increasing, so too are new kinds of business relationships between marketers and publishers, including mutually beneficial data-sharing arrangements that give both parties direct, controlled access to each other’s users. Acxiom, a leading marketing service provider (MSP), is investing in the technology and publisher partnerships necessary to stitch together a massive pool of targetable consumers across platforms, using its Abilitec product, its universal match key for consumers. ■ Working with third-party data providers for a mix of ephemeral and persistent signals. Increasingly, marketers are using third-party data to enrich existing user profiles for more-
  5. 5. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 5 © 2013, Forrester Research, Inc. Reproduction Prohibited August 23, 2013 accurate targeting and more-relevant message delivery. Today, a whole range of data providers are at the ready to round out a marketer’s targeting strategy, from traditional players such as IXI and Polk (in the financial and automotive sectors, respectively), to digital natives such as DataLogix, which offers targeting based on users’ previous shopping behaviors. To keep track of it all at the user level, DMPs such as Adobe Audience Manager are constantly synching with third-party providers to maintain a completely up-to-date read of users’ characteristics for insights and targeting. r e c o m m E N D AT I O N S Push the envelope with what’s available and focus on innovation Ultimately, in spite of the myriad challenges that marketers face with cross-platform user targeting, the real cost will come from not upgrading their targeting strategies. Marketers who continue to use the same old tried-and-true methods of targeting risk driving consumers into the arms of savvier competitors. Not accepting the industry status quo is, in this case, a business imperative — marketers must demand better solutions and push for more innovation from partners while making the most of what’s currently available. In the meantime, as you’re building out your multiplatform user-targeting strategy, don’t forget some basic, but hugely important, principles: ■ Develop your measurement strategy ahead of execution. Thankfully, while the targeting piece still remains a major challenge, multichannel/platform measurement systems have been steadily improving year over year. Advanced attribution companies such as Adometry and Visual IQ use both positive and negative signals from users to understand channel interplay. Before you launch a campaign targeting users across platforms, be sure the relevant tracking is in place — you may not get to a perfectly clean answer, but you’re well served to be prepared in advance to glean meaningful insights post-initiative (or even mid- initiative). ■ Ensure that your privacy policy is in tune with your brand values. Marketers have long ignored the explicit role a consumer plays in the targeting value exchange for fear of rocking the boat, both internally (e.g., with legal teams) and externally (e.g., with a front-page story in the Wall Street Journal). In the age of perpetually connected consumers who are more aware than ever that their data is out there for the taking, this is no longer a viable option. Marketers must focus on trust, transparency, and control in their dealings with consumers and their data. As Ned Brody, CEO at AOL Networks, puts it, “The reality is that many things have been done for the consumer’s benefit but not with the consumer’s choice.” Beyond your own privacy and consumer data-related efforts, be sure you understand any potential partner’s approach to data collection and consumer opt-out, particularly with respect to more cutting-edge techniques such as device fingerprinting.
  6. 6. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 6 © 2013, Forrester Research, Inc. Reproduction Prohibited August 23, 2013 ■ Invest in creative strategy as much as in targeting. Marketers who want to deliver on the promise of relevant message delivery will need to drive deeper integration of creative and media-buying decisions to be able to act quickly enough. This may mean developing format- specific executions, building more creative concepts to appeal to a range of very different audience segments, or investing in dynamic creative optimization (DCO) technology — ideally, it means doing all of these things. The payoff is there, says Yahoo’s Peter Foster, vice president of solutions development and mid-market sales, “In early results, we’re seeing that the combination of audience solutions, in addition to data-driven creative that personalizes the ad elements to each individual, can yield up to 100% lift in conversion.” Supplemental MATERIAL Companies Interviewed For This Report Acxiom AOL AudienceScience BlueKai ComScore Digitas ESPN Guthy-Renker Knotice Nielsen Responsys Rocket Fuel Simulmedia State Farm Mutual Automobile Insurance The Trade Desk The Weather Channel Companies Turn X Plus One Xaxis (WPP) Yahoo Endnotes 1 Forrester defines the perpetually connected consumer as one who owns and personally uses at least three connected devices and accesses the Internet multiple times a day from multiple physical locations, at least one of which is “on the go.” For a full discussion of these customers and the addressability framework we use to engage them, see the September 26, 2012, “The Always Addressable Customer” report. 2 At the end of 2012, 42% of US online adults were accessing the Internet multiple times a day from multiple devices and locations. See the February 11, 2013, “2013 Interactive Marketing Predictions” report. Source: North American Technographics® Online Benchmark Survey (Part 2), Q3 2012 (US, Canada).
  7. 7. For Marketing Leadership Professionals Solving The Cross-Platform Targeting Riddle 7 Forrester Research, Inc. (Nasdaq: FORR) is an independent research company that provides pragmatic and forward-thinking advice to global leaders in business and technology. Forrester works with professionals in 13 key roles at major companies providing proprietary research, customer insight, consulting, events, and peer-to-peer executive programs. For more than 29 years, Forrester has been making IT, marketing, and technology industry leaders successful every day. For more information, visit www.forrester.com. © 2013 Forrester Research, Inc. All rights reserved. Forrester, Forrester Wave, RoleView, Technographics, TechRankings, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective owners. Reproduction or sharing of this content in any form without prior written permission is strictly prohibited. To purchase reprints of this document, please email clientsupport@forrester.com. For additional reproduction and usage information, see Forrester’s Citation Policy located at www.forrester.com. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. 92561 3 In 2013, the ultra-connected customer base will grow at a staggering pace, destabilizing marketing as you’ve come to know it. This report identifies the changes you’ll see in your customers’ expectations, your abilities, and the way your organization is structured and explains how you can succeed in this new age. See the February 11, 2013, “2013 Interactive Marketing Predictions” report. 4 Six years into the smartphone transition, customers are making a mobile mind shift. The shifted customer expects that any desired information or service is available on any appropriate device, in context, at their moment of need. To analyze how far people have shifted, we created the Mobile Mind Shift Index (MMSI), which segments people into six categories: Disconnecteds, Dabblers, Roamers, Adapters, Immersers, and Perpetuals. See the April 19, 2013, “The Mobile Mind Shift Index” report. 5 Forty-three percent of perpetually connected consumers are willing to share personal data in exchange for loyalty points, compared with only 28% of US online adults overall. See the April 19, 2013, “Marketing Strategy For The Mobile Mind Shift” report. 6 PII is defined in the NIST Special Publication 800-122 as “any information about an individual maintained by an agency, including (1) any information that can be used to distinguish or trace an individual’s identity, such as name, social security number, date and place of birth, mother’s maiden name, or biometric records; and (2) any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.” A user’s IP address counts as PII, regardless of whether it may or may not on its own be used to uniquely identify a person. Source: Erika McCallister, Tim Grance, and Karen Scarfone, “Guide to Protecting the Confidentiality of Personally Identifiable Information (PII): Recommendations of the National Institute of Standards and Technology,” NIST, April 2010 (http://csrc.nist. gov/publications/nistpubs/800-122/sp800-122.pdf). 7 A data management platform (DMP) is defined by Forrester as, “A unified technology platform that intakes disparate first-, second-, and third-party data sets, provides normalization and segmentation on that data, and allows a user to push the resulting segmentation into live interactive channel environments.” DMPs have risen in popularity over the past year with marketers looking to unify their digital audience data collection efforts and operationalize targeting across a range of addressable channels, both paid and owned. For more information on the DMP space, see the July 25, 2011, “The DMP Is The Audience Intelligence Engine For Interactive Marketers” report.

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