As CPG companies look to eliminate waste in their advertising budgets, many are reluctant to sacrifice the efficiency afforded by programmatic ad buying, an algorithm that serves as a cheap cost per impression (CPM) means of reaching consumers. While it’s affordable, such an approach focuses solely on who views the ad and neglects to consider the likely mindset of the consumer at the time the ad is viewed. This may not be the most effective methodology. Marketers who instead mix in relevant context strategies can bolster sales lift and further increase return on investment (ROI) by up to 30 percent, according to a new IRI® marketing innovation report, “Cookies versus Context: How Contextually Relevant Advertising Drives Consumer Impact.”
According to results from an IRI/The Advertising Research Foundation’s study, which included three major CPG brands across food and non-food categories and analyzed 20 breaks across individual campaigns, digital advertisements placed on websites with higher thematic alignment and high consumer attention result in higher ROI than less-aligned ad buys. Thanks to new innovations in automated advertising — including technology such as IRI Lift™, which allows real-time visibility into the digital media where context is boosting lift — advertisers are now increasingly able to emphasize attention and alignment strategies, to effectively increase ROI.
“For years, marketers have struggled to keep advertising costs down, and impact has all too often suffered,” said Bhanu Bhardwaj, senior vice president and principal of IRI Media Center of Excellence. “Technology has advanced to the point that marketers no longer need to trade efficiency for effectiveness. As context strategies increasingly move toward automation, the programmatic and contextual approaches are beginning to merge and ad buyers are able to reach target audiences with greater precision and at greatly reduced costs in the optimal context.”
“In an environment where we have an increasingly distracted consumer, we are seeing more and more evidence of the role that attention and receptivity can play in improving campaign ROI,” says Paul Donato, chief research officer for The Advertising Research Foundation. “This study plays an important role in advancing our understanding of that and especially the critical part that alignment plays in ad effectiveness.”
As detailed in the report, while content-relevant strategies are important, the fundamentals are still vital, and campaigns should be planned with the understanding that having the right target, message, timing/frequency and creative remain the foundational pillars of any successful digital advertising campaign. Adding context to these fundamental elements is the cherry topping to the mix.
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