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Is Programmatic Personalization Living Up to the Hype?

By Caroline Watts

January 14, 2016 at 10:05 AM

featuredimage_personalization.jpgIs display over? Not according to the latest numbers from eMarketer, which indicate that display spending is not only rising but poised to overtake search for the first time ever this year. Mobile, video, rich media and programmatic buying are all fueling the growth.

One of the most talked about trends in programmatic display is the power of personalization. It's the latest big buzzword, but is the promise of personalization living up to the hype?

A Persuasive Promise

Programmatic ad delivery marketers enables marketers to focus ads on the right audiences. Beyond targeting, programmatic delivery mechanisms also make it possible to deliver customize ad content to each member of your target audience.

On its face, this is an exciting prospect and has been used effectively in some arenas all ready. Dynamic creative optimization, for example, makes it possible to show users in your retargeting pool the precise item they looked at on your website. This type of personalization can be a boon for retailers looking to drive consumers to complete a purchase or finish checking out after abandoning a shopping cart.

There are forms of personalization other than user behavior, relying on information like time of day, weather, third-party data from a DMP or first-party customer data. For some marketing efforts, personalization based on either first or third-party data is incredibly valuable. Customized emails including tailored coupons or offers based on previous purchases are signficantly more effective than generic emails, but what are the implications for display advertising?

Where Personalization Falls Short

Personalizing ads based on audience data will almost certainly generate better returns than no optimization at all. But the excitement about this tech segment may be waning, even as personalization technology gets better, cheaper and easier to use. The problem doesn't lie with the pace of technological advancement,  it's how quickly this approach to optimization can reach its upper limit.

When you have a great ad concept that really resonates with your audience, personalizing the ad can help you maximize that ad concept's potential. But if you start out with a weak or suboptimal ad concept, identifying every single user and tailoring each individual ad won't help it much. To really maximize your advertising potential (think performance lifts of 100% to 200%) you need to identify, with certainty, the best-performing ad concept. The only way to do that is through rigorous creative experimentation that identifies, with statistical significance, which creatives drive results, whether your goal is driving online purchases, completed video videos or engagement with rich media units. When you experiment with different ad concepts in live, well-designed tests, you let your audience decide.

That's the real problem with personalization: it's now relatively easy to find a technology that lets you create many personalized versions of an ad programmatically, but it's still just educated guessing at scale. To generate real results, you need personalization and experimentation.

What's Driving Display's Resurgence? 

Display advertising isn't dead, in fact, it's stronger than ever, but if the latest uptick in spending isn't due to the promises of personalization, what's driving it? New, compelling rich media formats, more video inventory, and a growing push in mobile. And within all of those categories, the best way to succeed is to develop great ads and run regular creative experiments to make sure those great ads are perfectly optimized.