Can relevant digital ads be too relevant?
Surveys regularly show that consumers want more relevant digital ads. Yet a new study concludes that being relevant to specific consumer needs is often limiting and may lead to missing out on new customers.
The research from Performics, Northwestern University and Microsoft Advertising examined the likelihood of consumers to select a search ad result based on their mindset (“Goal-Driven” or “Item-Driven”) and the type of ad experience (“Limited” vs. “Expanded”).
The study basically concluded that hyper-relevant ads work for online searchers with an “Item-Driven” mindset, or those looking for a specific product or service. However, they don’t work for searchers with a “Goal-Driven” mindset — those with a goal in mind (e.g. build muscle) which can require a variety of products and services (e.g., protein powders, yoga mats, healthy recipes, gym memberships) to attain.
The study further found:
- Currently, no matter the mindset, most brands show “Limited” ad results targeted to specific queries. Yet more than half of consumers are in a “Goal-Driven” mindset and 54 percent of “Goal-Driven” searchers continued to search, because they didn’t find what they were looking for;
- While repeat purchasers search with an item in mind (e.g., buying the same protein powder every month), new consumers to a category or brand are more likely to be in a “Goal-Driven” mindset. Brands have a 26.7 percent higher chance of finding a new customer when targeting a “Goal-Driven” vs. the “Item-Driven” mindset;
- When presented with an “Expanded” set of ad results with associated products related to their goal in the ad mix (vs. “Limited”), consumer perception of usefulness of ads increased 10 percent.
Ashlee Humphreys, associate professor at Northwestern Medill, recommended to brands, “For consumers in an Item-Driven mindset, give them what they want, but also highlight associated products within your search, social and native site experiences. For Goal-Driven consumers, predict all the ways you can help them achieve that goal by testing a variety of experiences, showcasing associated products and bundles of products. Most importantly, don’t overlook the value of Goal-Driven search queries, which is where you will find new users to the category, one of the most powerful sources of growth.”
- New Intent Lab Study Finds that Giving Consumers Exactly What They Ask For Is Not Enough for Advertising Performance – Performics/Yahoo Finance
- Intent Lab: New Study Finds that Giving Consumers Exactly What They Ask For Is Not Enough (study) – Performics
- Less Than One-Third of U.S. Consumers Say Digital Ads Are Relevant – Civic Science
- Digital Ads Might Be Getting More Relevant (But Not So Much During COVID-19) – Civic Science
- US Consumers Tolerate Ads if They’re Expecting Them or They’re Incentivized – eMarketer
- Five Charts: Why Users Are Fed Up with Digital Ads – eMarketer
DISCUSSION QUESTIONS: What lessons can marketers draw from this study? Do you agree that hyper-relevant digital ads are often not optimal for new consumers to a category or those with a goal-driven mindset?