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CTV vs. linear TV: The decision framework for today's media planner
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You mention to your spouse that you need to pick up a new dog bed, and suddenly you start seeing ads for dog beds in your social feeds. Is your phone or smart home assistant listening? Maybe.
Or it could just be that the marketers for that dog bed know you really, really well.
Regardless of how those ads ended up in front of your eyes, it can be a bit disconcerting. According to Forbes, 75% of consumers find marketing personalization to be a bit creepy. And yet Gartner research shows that brands that don’t personalize (or personalize poorly) risk losing about 38% of their business.
What’s more, Harvard Business Review had this to say in an article titled, “Ads That Don’t Overstep”:
“Research has shown that digital targeting meaningfully improves the response to advertisements and that ad performance declines when marketers’ access to consumer data is reduced. But there is also evidence that using online ‘surveillance’ to sell products can lead to a consumer backlash.”
That’s quite the conundrum. How’s a brand to find the right balance?
Direct-to-consumer (DTC) brands are prioritizing performance marketing over heavy, traditional branding pushes. They’ve excelled with this tactic on digital channels, primarily because they can hone in on personalizing the full experience for the consumer.
To that end, we recently worked with the CMO Club to interview marketing leaders at 14 successful DTC brands on their efforts, and there are a few lessons that any brand can take away from DTCs’ approach. Take a look at how they’re working to personalize their marketing—in ways that don’t creep out their customers and actually add value to the overall experience.
Understanding and segmenting customers based on factors like age, gender, location, interests, browsing behaviors, online and offline buying behaviors, email engagement, employment industry, etc. allows brands to make highly personalized product recommendations. For example, at Proper Cloth, a DTC brand specializing in custom dress shirts and clothing for men, focuses on creating an optimal customer experience as part of their personalization journey.
“To be a successful DTC brand, you must build that relationship with the customer,” says Daniel Zisman, public relations manager at Proper Cloth. “You don’t only want to offer a product but offer an experience. Experience will keep a customer loyal and coming back.”
With this in mind, that personalization experience is both about the product and how the customer experiences the brand. DTC brands do this well by having the right product, often targeted to a niche audience, and then they build an experience that appeals directly to those people.
Kyle Jacobson, CMO at Gobi Heat, explains that his brand focuses on being able to deliver the most relevant product to each individual—at scale—which isn’t an easy task:
"The biggest focus has been finding out where the most profitable segments are, and then really diving into those and breaking them out into sub-segments as much as possible. For example, finding the outdoor enthusiasts, breaking those down into very specific segments of location, age, affluency—and building ad sets that target those individual people as granularly as we possibly can. That’s been able to give us that profitability and that efficiency to be able to grow so rapidly.”
Using data to personalize product recommendations—and even tailor your products themselves—is generally considered helpful rather than harmful as long as the data has been acquired appropriately, with the consent of the consumer and appropriate opt-outs in place.
Another way to personalize your marketing to show how much you understand the person is through tailoring the creative. For example, a sporting goods brand may show winter scenery to users in cold locations and warmer outdoor scenes to those in warmer locales. A shave club may show different imagery to men versus women, or older men versus younger men.
As Greg Shugar, CEO and creative director at DTC brand Beau Ties of Vermont, explains that he likes seeing diverse people and ages in marketing from Bonobos:
“There are guys who still really want to dress well, and they don't feel so comfortable when they see a 25-year-old wearing the clothes that they want to buy. So, I think [Bonobos has] done a great job in reaching out to different age groups. And for a guy like me who's not as skinny as a model, it helps to see a guy with a 35-inch-waist wearing their pants.”
Personalizing your creative based on what you know about you customer helps to make your marketing more relevant.
Not all personalization has to be done online. According to research from Epsilon, 80% of consumers have recently shopped in-store, and half consider it their preferred channel. As a result, more and more DTC brands are creating their own brick-and-mortar presence.
“For some products, there’s an incremental value to a customer seeing it live and for non-commodity products or something where taste or fit plays a role,” says Nate Phillips, CEO and cofounder of NomNom, a high-quality pet food brand that has found success in setting up in-person events for customers to see the quality of their product.
The key to personalization without the “following” factor is using what you know about your customers to add actual value to your interactions with them. You can start by showing them you know which of your products they’re likely to enjoy. Help them to see themselves in your marketing with personalized creative. And create frictionless experiences across devices and channels (no one likes when items disappear from their cart as they move from mobile to desktop shopping).
Check out the full DTC report for more insights from these DTC marketers: Direct to growth: What all brands can gain from the new DTC world.
Melanie Franke is the director of content marketing at Epsilon, where she leads brand-level content marketing strategy and programs. She is also the managing editor for CORE, a biannual publication from Epsilon that tackles CMO-level topics, challenges and solutions.
