Programmatic advertising opens up new possibilities for addressing users with targeted advertising messages throughout the entire life cycle. While experts are still busy debating the theory behind data-driven campaigns with real-time character, IKEA Austria is already delivering practical proof: Programmatic ads can significantly increase both advertising quality and efficiency.
Where digital advertising with traditional approaches like retargeting reaches its limits, programmatic advertising comes in with new targeting models – keyword: customer life cycle management. Advertising works best if it addresses users with individual messages at the right time and place. This sounds simple, but is no trivial matter when it must actually be implemented by advertisers such as publishers.
When Customer Interest Suddenly Turns into Rejection
The logic behind retargeting models is fairly predictable: Users who are interested in a particular product in an online shop are marked with a cookie and repeatedly subjected to advertising messages about the product once they’ve left the shop and visit other sites on the Internet.
Nearly all online users are familiar with this principle from personal experience – and many will agree that this type of advertising simply becomes annoying after a while. Those forced to look at a game console, T-shirt or lawnmower for the umpteenth time begin to ignore the ad. At worst, interest turns into rejection. Studies say that after repeated ad placement, more than half of users are certain not to make a purchase.
Life Cycle Management Starts Where Retargeting Reaches Its Limits
An alternative approach is currently being demonstrated by the largest furniture store in the world. When IKEA Austria began to look into programmatic advertising about two years ago, the subject was being widely praised by ad experts. In practice, however, innovative advertising approaches were rare. IKEA Austria saw the opportunity to focus on the entire customer journey rather than promoting individual products with conventional retargeting models. The challenge: How to reach and appeal to customers with individualized messages?
The goal of IKEA Austria is to keep the interests of users in mind at all times while creating added value. Although the brand is known for its self-explanatory furniture and home accessories, there are still some areas where customers require advice. The kitchen is an area that comes with many different layout and service options. Modern kitchens are more than just a place for cooking – food as well as its preparation and storage play an important role in the lives of Austrians. IKEA Austria knows that this is the point its advertising messages must center around.
Creating Relevance Through Customer Segmentation in Real Time
Buying a kitchen is comparable to buying a car: The purchase requires a certain budget, the expectations for the product are high, there are many suppliers and endless options. Instead of using heavy-handed advertising messages to “stalk” potential customers, IKEA Austria focuses on added value. Whether it’s about measurement service, advice and planning in the store or delivery and installation – there are many touch points along the customer journey at which IKEA Austria can reach its customers with customized information.
To accomplish this, IKEA Austria must be aware of the exact time a particular message is relevant. Programmatic marketing enables the company to move beyond static, traditional targeting based on demographic data. Instead IKEA Austria approaches its customers much more accurately based on their personal interests. User data that is pooled from various sources is segmented in real time, and relevant messages are displayed based on user interests.
Programmatic Advertising as a Joint Learning Journey
Those who wish to pursue programmatic advertising like IKEA Austria embark on a kind of learning journey. When the company began looking into programmatic advertising about two years ago, the approach was still in its infancy. Together with adverserve, IKEA Austria established an own ad server that allowed the company to manage data independently while having full data transparency. Different data sources were linked together to create a common database.
The joint mission of IKEA Austria and adverserve is to quickly develop new strategies without going through long decision-making processes. Trial and error approaches are not only efficient – they also help to learn very quickly, push the performance of campaigns as lessons learned and give detailed insights, which will be incorporated into all future developments.