Ad budgets moving more to people-based digital ads

According to a new study from eConsultancy and Signal, data-driven and people-based display advertising is increasing in popularity compared to cookie-based models of traditional digital display. The report shows that advertising budgets for addressable media are being increased, as it delivers higher performance and return on ad spend. Two-thirds of those surveys agreed that "...display will be replaced by relevant, data-driven advertising." The report also found that companies need to protect their first-party data, as 86% of respondents said they were concerned with data governance when dealing with "walled gardens."

Data-driven, people-based display advertising is quickly increasing in popularity as an alternative to legacy, cookie-based models of traditional digital display, a new report has found.

The People-Based Advertising report released by Econsultancy, in partnership with data management technology vendor, Signal, found 75 per cent of advertisers surveyed were familiar with people-based marketing. The report, based on an online survey of 358 senior Australian marketers and media buyers with moderate to high online ad budgets, was fielded in the first weeks of 2016, with the vast majority of media buyers polled saying they and their clients were increasing their people-based media buys.

According to the report, advertisers are putting more budget towards addressable media because it removes the guesswork from digital advertising, delivering higher performance and return on ad spend. In addition, 86 per cent of advertisers who have deployed people-based campaigns reported they had outperformed standard campaigns on similar channels.

On top of this, one quarter of respondents noted people-based advertising comprises more than half of their digital ad spend, with an average of 32 per cent.

Two in three Australian advertisers surveyed also agreed with the statement that “the current model for display advertising is broken”. At the same time, two-thirds of advertisers and media buyers agreed that “…display will be replaced by relevant, data-driven advertising”, while most see promise in using data to improve the ad experience for consumers and yield for businesses.

The report stressed that by tying their first-party data together with enduring digital identities, brands can have a much deeper understanding of their customers and prospects. This allows them to have more successful interactions wherever their audiences congregate, the report stated. Study responses further suggested this approach works to reduce waste, increase conversion and improve efficiency.

Importantly, the report revealed companies’ need to cultivate and protect their first-party data is well-established, with 90 per cent stating their effectiveness when using it to target people in their database is either excellent or good. The temptation is to now use one of the high-profile data providers in this space, namely Facebook’s Custom Audiences, Google’s AdWords Customer Match or Twitter’s Tailored Audiences.

Despite this trend, 86 per cent of respondents said they were concerned with data governance when working within these “walled gardens” and 80 per cent said they were troubled by the customer data handled over in the process.

The report follows Signal's recent launch of its independent people-based advertising solution that aims to help brands extend their one-to-one engagement strategy into the digital media realm.

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