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From Mad Men to Mad Machines: Algorithms in Advertising

Posted by Phil Davis

August 11, 2016

algorithims_in_advertising.jpgMarketing and advertising have come a long way since the 1960s. The well-dressed, martini-swilling, creative-driven advertising executives of the mid-century—as portrayed in “Mad Men”—remind us that tried-and-true marketing strategies, like audience-centric messaging, are still the cornerstone of modern marketing. But technology has raised the stakes, allowing marketers to be more data-driven in messaging, targeting and more.

Data-driven marketing has become an important component of advertising campaigns. Today’s customers expect businesses to provide them with a seamless and relevant experience across platforms and media. With more access to data, marketers have an in-depth knowledge of buyers’ preferences, which can influence the messages they use to target customers more consistently and through the channels that align with their purchase behavior.

Here’s how to leverage today’s evolved processes to improve upon age-old, proven strategies:

Developing Data-Based Buyer Personas to Inform Strategy and Messaging

Market research has always been a crucial element for marketers and advertisers looking to better understand a new audience. Traditional research methods, like focus groups and in-depth interviews with customers, are still prevalent and useful for developing buyer personas to help teams better target their marketing efforts.

However, modern marketing consists of more quantitative research methods as well, specifically polls, questionnaires or large-scale surveys. Additionally, professionals in marketing and advertising can leverage the first-party data they already have (such as email addresses) to gain greater insight into demographics, online behavior and more. The insights gathered can provide a more data-driven look at target customers uncovered during buyer persona development.

Personalization Based on Demographic Data and Purchase Behavior

In the past, advertising teams relied on market research and demographic insights to develop slogans and taglines that would resonate with target customers. And while there was a great deal of thought behind ad placement, it was always difficult to determine if you were targeting the right people in the right places—or if specific ads were even driving sales at all.

In recent years, however, brands have relied on algorithms in advertising to ensure ads are being displayed at the right place, right time and to the individuals most likely to buy.

Facebook, for example, allows advertisers to upload email lists, as well as hashed email lists. Facebook will then retarget these same users. And using lookalike modeling and behavioral algorithms, the platform will also show ads to users most likely to be interested in the brand’s product or service. Plus, marketers can use collected data to improve targeting over time and make better ad buying decisions.

Audience Segmentation

Ad execs of yesteryear used their limited data—especially demographic information—to break audiences into segments. But, today, we have much better intel and heaps of data to improve segmentation. And we can track which segments are most active on email, most likely to use various platforms and most likely to be interested in certain products.

Segmenting your email marketing list allows you to narrow the targeted groups you send messages to so you can deliver more relevant content for better results. When MailChimp compared the results of segmented campaigns against non-segmented ones, they found segmented campaigns had a 14.41% higher open rate and 64% higher clickthrough rate.

So while you may covet the trendy suits, boozy lunches and workplace simplicity enjoyed by romanticized 1960s Madison Avenue ad execs, just remember: you have access to more data than any professional before. By using the tools at your fingertips, you’ll quickly rise to the top as your organization’s Don Draper or Peggy Olson—or at least enjoy higher revenue.

Data is the heart of successful marketing, but without the right data your efforts are limited. Get all the data you need to exceed your engagement goals with a free trial of InstantData.

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Topics: Email Marketing

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