Beyond Personalization: The Rise of Relevance in Modern Marketing

I had the pleasure of sharing insights alongside distinguished panelists Mark Grether from Uber and Ben Weisel from DICK’s at The Ascendant Network Retail Media Network Bootcamp. Together, we explored the evolution of retail media and the necessary shift towards prioritizing relevance over personalization. One key point is that  maximizing customer lifetime value is often best achieved when advertisers capitalize on the moments of peak engagement — when customers are already in the buying mindset.

Today, the average ad campaign runs on 44K sites.  While 44K might sound like an impressive reach, the truth is 64% of that spend could be used inefficiently — on vendor fees, non-viewable ads, bots, and more.

Only 36% of the ad spend actually reaches real customers. So what’s an advertiser to do?

Many maintain that personalization is the right answer to the modern marketer’s dilemma, but that strategy also has its limitations. This approach delivers the right offer, to the right person, at the right time, but does it still work most effectively in a post-cookie-less world where audience data is limited?  Just because a message is personalized with, say, the recipient’s name, and delivered at the right time doesn’t mean it’s the best message to put in front of that particular consumer or that it will lead to the most valuable outcome.

A better strategy is to go beyond personalization and deliver relevance. To engage and convert consumers today, especially with more commerce-driven transactions, marketers must consider  the full context of each person’s current situation and ensure that this consumer is only seeing the most relevant offers. Just because the ad is right does not mean the ad is best.

“More is less” is only part of the story

Twenty years ago, psychologist Barry Schwartz famously promoted the idea that “more is less” in his book “The Paradox of Choice,” arguing that people feel more anxious and less happy when faced with too many choices. The stats suggest digital marketers are failing to keep Schwartz’s paradox in mind. The average consumer spends a quarter of their waking hours online, and many are hoping to dodge the plethora of promotional messages that blanket their journey around the internet. Looking just at popular streaming platforms, nearly two-thirds of consumers (64%) told Nielsen they’ll do whatever is necessary to avoid being exposed to ads.

Consumers in the U.S. also aren’t very enthusiastic about seeing ads on websites for shopping, news, entertainment and media, where favorability hovers at just about 35%, according to Integral Ad Science data from last fall. Other research shows that a whopping 80% of consumers actually go out of their way to avoid ads, while 20% admit that an excessive number of pop-ups from a brand or retailer can lead them to abandon their purchase altogether.

So, what is the winning formula for marketers trying to reach their best audience?

It starts with presenting consumers with fewer ads. And while it’s important to continue to deliver personalized messages, the key is to present only the most relevant messages. Relevance requires understanding the role that both value and interest equally play in making a consumer engage and/or convert—a dynamic that machine learning can scale.

Reduce impressions, raise relevance

Relevance must be the new standard for marketers looking to cut through the noise and spur consumers to engage and convert. Relevance, not reach, is what truly moves the commerce needle today. In fact, the Nielsen research mentioned above also found that consumers respond positively when brands offer relevant content. The majority of consumers say this kind of relevance would inspire them to make a purchase, signaling the possibilities that open up when brands redraw their marketing roadmap to focus on what relates to the matter at hand. That’s literally the dictionary definition of “relevance.”

Data gathered by The Harris Poll supports the idea that consumers are hungry for relevance. Nearly 90% of consumers cite “relevant deals” as their top priority when shopping online, according to the sentiment-tracking survey group’s report on consumer behaviors in the U.K. and Australia. Meanwhile, 34% of U.S. consumers complained of being peppered with ads or seeing irrelevant messages (33%) while trying to check out and complete a purchase.

Some marketers might be inadvertently alienating their audience by serving irrelevant ads that miss the mark. While 52% of consumers form a poor opinion of a brand when they see too many of the company’s ads, another 37% say the ads they do see don’t even pertain to their particular interests. This means that marketers are spending precious dollars just to push their targets further away from the funnel.

The best ads today are the most relevant ads. These speak to the moment and need to become the new standard for marketers. Right ad, right person, right time isn’t necessarily best ad, best person, best time. Marketers that hold their best, most relevant offers for the best, most relevant moment will reap rewards in the form of stronger engagement, higher conversion and healthier ROI. This is how to ensure relevance rules.

Explore Doug’s latest piece in Ad Age here.