The past: "The virtual gold rush"
If I take you back to the beginning of digital marketing, the first thing that comes to mind is the seemingly Utopian possibilities it offered the advertising industry. As a medium, the internet provided more potential than traditional media like TV and print. People predicted the internet would have immense range, and would allow for the direct and individual targeting of consumers and measurability of results in real time.  A virtual gold rush followed, only to end in disillusionment: the industry concentrated almost solely on one bottom line – measurability. Everything else remained little more than a Utopian dream.

Evaluation of marketing activities via click rate is, undoubtedly, a great thing. Campaign results can be gathered simply, presented quickly and promise to be 100% accurate – which, as everyone now knows, is not the case. Still, it comes as no surprise that the click rate, especially in the still dominant mode of thought focusing on digital response, gained so much momentum, and came to dominate the online industry for years. Even in the targeting industry, clicks set the pace. The user was to be reached primarily in order to increase clicks and conversions of various campaigns – it didn’t matter if that user was part of the target audience or not. Case studies from that time prove this worked perfectly well, as increases in clicks by three-digit percentages became the norm. Nevertheless, it was clear to everyone that this path would soon lead to a dead end.

Disillusionment
Despite the successes of response-oriented campaigns, one had to ask whether this development would translate to success in the marketplace. And this question inevitably led to the realisation that this new tactic was ignoring years of established market reality, and was built on shaky ground. Those who carry the advertising market as a whole, namely the major brands with big budgets, had no motivation to establish online marketing activities in addition to print and TV initiatives. Why not? When it comes to traditional media, it’s all about brand management and branding – not convincing consumers to click on the computer mouse. That is direct marketing, and an application of direct marketing principles to brand management is like comparing apples to oranges. The goal is to establish a lasting presence of brand names in the minds of consumers. But what has led to the demise of the click’s power, aside from all the strategic reasons, is the death of the click itself: studies show that only 15% of all Internet users actually click on promotional material and the tendency to click is decreasing. As we know, Internet users are becoming increasingly digitally savvy and with this, more selective with each click. We aren’t just facing a dead end; we’re facing a chasm.

Rethinking
In order for the online medium to establish itself as a serious and lucrative player in the media world, and to hold on to this position long-term, it has to deliver on what it first promised. But is it actually capable of doing this? By now, yes it is! The goal is to offer major brands the fertile ground where they can flourish, on the condition that digital marketing breaks free of the confines of direct marketing and adapts to the needs of brand management. Anything else is a wolf in sheep’s clothing. The market needs TV-relevant coverage, intelligent target group management and, finally, a means of market research that can measure the branding effect and give media planners the exact tools they already know from traditional media – but with all the added value offered by digital media. What needs to be measured is not the click of the mouse but the “click” in the mind of consumers, just as in the evaluation of TV or outdoor advertising. A comprehensive optimisation of the advertising dosage, faster implementation of a larger range of coverage in the premium portfolios of diverse players, and the adjustment of campaigns in real time – this is what predictive targeting offers.

The process of rethinking is already taking place. Major brands, like Unilever, L’Oreal or Hewlett Packard, are celebrating their first significant successes and increasingly investing in digital media. Predictive targeting aims at “Brand Performance”. That means efficiently reaching target groups in order to establish a brand message through optimal measures of contact. This is accompanied by “Brand Engagement”, which motivates a small but relevant section of the target group to enter into a dialogue with the brand through direct marketing. Here, a significantly greater number of direct marketing elements can be used. When in doubt, this new field of brand communication even seeks out one-on-one communication – but, as already noted, only with a very small portion of the potential target group. This deviation of budgets, values and experience requires trust among market members; this is the prerequisite for future success.

Realism and trust
The good thing about the click rate was its accuracy, unerring measurability and real-time manifestation, driven by the user’s mouse. It’s not easy to give up this golden tool – but in reality it’s also not that difficult. The benchmark is the knowledge learned from traditional media planning. Here, too, things are never 100% exact. It’s about working with panels and market research, and all the measurement errors that come with them. But you can then adapt and learn how to use these tools and achieve excellent results with them. This has been true for decades. Brands that are engaging with consumers online have to get used to the fact that the seeming 100%  ‘accuracy’ of direct marketing measurement must be sacrificed in order to move forward. And cutting loose from this is less painful than one might expect.

The results collected by predictive targeting campaigns are a good example. For instance, if an advertiser books an optimized campaign through nugg.ad that targets men between the ages of 20 and 39, and achieves 40% accuracy within the target group, media planners may react with frustration: the initial thought is that 40% isn’t very efficient. But what if, without predictive targeting, the campaign reached only 12% of the men targeted? As always, it’s necessary to utilise comparisons and experience when measuring the success of such a tool. And this platform must first be built.

A study commissioned by leading media agency Zed Digital recently devoted itself to this point. The results showed that the accuracy of predictive targeting for the aforementioned target group was up to 168% greater than that achieved by conventional methods. That, in my opinion, is very efficient! The practical use of nugg.ad brand solutions is also reflected in a campaign implemented by Zed Digital for the L’Oreal Paris product Garnier PureActive. Over a period of four weeks, the moving-image campaign was delivered to the target group - men between the ages of 14 to 29 - with 6.8 million ad impressions. The focus was on increasing brand awareness. This goal was successfully realised, with an increase of 41% compared to identical comparative campaigns without targeting, fully meeting L’Oreal’s expectations.

The future
The developments described here are being implemented here and now. Just as in the transformation from traditional to digital media, the evolution of online advertising is a learning process and a conscious application of the new. Step by step, we are moving forward. I am confident that we are on the right path, with the golden years still ahead of us.

Ben Humphry is country director UK and Ireland at nugg.ad