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Where Are Your Target Consumers?

  |  July 14, 2011   |  Comments   |  

Three reasons why precision marketing fails to take a leading role in China.

In "Arabian Nights", a collection of Middle Eastern and South Asian stories and folk tales, there's a very interesting tale named "Ali Baba and the Forty Thieves", which is thought-provoking with multiple ups and downs. But the most critical moment was when Ali Baba yelled the magic words "Open Sesame" and unlocked the door of hidden treasures and fascinating adventures. Actually, it is the same with marketing. All marketers are trying to find the magic words or the key to the palace hall of marketing and to explore the inexhaustible treasures inside.

For marketers, the magic words have always been "to find the right target, deliver the attractive message, and sell the product or service to customers". Although there might be different explanations of these magic words in different fields, "to find the right target" is always the No.1 that we have to consider. It is also the most important thing in digital marketing – grasp the consumer preference using different technical solutions to enhance the efficiency of the campaign.

More and more 'big players' have joined the precision digital marketing arena. Sixty percent of America's digital marketing budget in 2010 was invested in display, targeting interest/preference, web browsing habits, geographic portfolio, and lifestyle, etc. By , the total number of Chinese Internet users has exceeded 450 million. Undoubtedly, the traditional strategy of 'mass coverage' is no longer feasible. Therefore, the biggest issue for future precision digital marketing is how to screen potential consumers, deliver the most effective communication, and motivate sales.

Now there are many existing ad networks providing precision marketing solutions and still many new players are joining as well. However, it seems the precision solutions still play the supporting role rather than being the mainstream choice. Although, if "to find the right target" is the most important thing for advertisers, why did precision marketing fail to take the leading role?

The reasons might include:

1. Lack of authoritative assessment. Every vendor providing a precision marketing service always describe themselves as professionals owning leading technology (some even sounds like magic) to precisely reach the targeted consumers. The problem is these vendors are the judges of themselves. They say they are precise enough but advertisers and the agencies cannot tell. Under this circumstance, it is really not that easy to let the advertisers rest assured to invest a large budget.

2. Limit of current business model. Most vendors providing targeted marketing services buy wholesale and sell retail; that is, buy in the package of the resources first and then sell them out separately. However, this model might lead to two problems: firstly, some resources cannot be bought or sold in this way (e.g., the home page resources of certain big portals), so this solution cannot offer the matrix that meets exactly the client's requirements; secondly, resources bought wholesale must be sold retail, otherwise vendors cannot cover the cost, thus the selection process of resources could be so trivial that only small websites can afford the patience while big ones cannot.

3. Attitude of advertisers. Many advertisers still think "I invest the money, so I must see the ads". However, the more precisely the ads are targeted, the more puzzled advertisers may feel. For example, a marketing supervisor in charge of baby diapers, 30-years-old, single, should never see any ads of the baby diaper except if he or she is interested in buying diapers for friends' children as gifts. But how many clients can accept this kind of marketing on the condition that he could only read the numbers in the report? The right method is not usually the easily accepted one.

Is precision marketing necessary? Absolutely yes. Advertisers could record the performance of every campaign and gradually build up your own database for precision marketing. Whatever contents you want to include in this database, either clicks, downloads, or sales trend, it would be better to establish a strategic and tailor-made marketing model of your own rather than just invest the budget but without any effective information deposited. The process might be difficult or even complicated, but the outcome will definitely add to the confidence and optimise the performance.

Where are your targeted consumers? Technology is just one way to communicate with them, and the key point is to find a way to find them. That is not to say the current methods are not good, but "knowing what and knowing how" can be a better way to do marketing. Anyway, marketing is not really all about magic.

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James Wu

James is managing director, Digital Operations and Innovation at GroupM Interaction China responsible for social media and creative production, tactical planning, mobile marketing and new business development. With more than 10 years of experience in digital media, he had demonstrated expertise in interactive and technology industries when working on big brand names in Greater China. James started his career in 2000 with United Advertising in Taipei as an interactive account manager. He then moved to Euro RSCG Taipei as interactive business director responsible for blue-chip business like Intel, Microsoft, and MSN. James relocated to China in 2007 to help build and manage the digital team for OMD, servicing clients such as J&J, GE, and Standard Chartered Bank. In 2010, he was promoted to managing partner for continued growth and instrumental in the business success of MediaCom Interaction in the country.

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