Informative

An Introduction to Targeted Advertising

Many companies (small, medium and large), are spending more and more money trying to get their messages across and grow their businesses. One of the most effective ways to get your message across is with online advertising. But how do you set up an advertising strategy that will get you the best results with your advertising budget? Check out this blog for an introduction to targeted advertising and find it all out!

Angelina Natividad

Online Marketer at The Next Ad

Apr 06, 2020

An introduction to targeted advertising

Essentially, it’s all about reaching the right audience, at the right time and place through efficient audience targeting. In order to help you out, we’ve written this blog to give you an introduction to targeted advertising!

Before creating any campaign, identifying and understanding who your customers (target audience) are and where and when to find them, is the first and most important step. The more specific your audience targeting strategy is, the easier it will be to create relevant ad creatives and have better campaign performances as a result. 

While there are many ways to advertise your business online, using Google, Facebook and/or Instagram as channels to reach your audience is definitely a must.

The basics of targeted advertising

To make sure you have a solid understanding of audience targeting, we’ll be covering the basics of targeted advertising. You’ll find out what targeted advertising actually entails, why it’s so important to do and how you can apply it to your advertising strategy. 

Let’s say you own a shop that sells all sustainable items. 

You’ve managed to get yourself a great (brick-and-mortar) store somewhere in the city. The shop is doing well and you are looking to grow your business by expanding your online presence with digital advertising. You decide to set up a nice ad on (e.g.) Facebook for your special ‘Bamboo lunchbox’ promotion. You set the campaign live, sit back and wait for all of the new orders to roll in – but that didn’t happen.

So what could’ve gone wrong there?

Even if you followed all of the best practices for creating stunning ad visuals, engaging copies and offered an amazing deal, all your efforts would have gone to waste if you directed the right message to the wrong people. 

If you are offering a (durable) bamboo lunchbox and your ads are targeting people with 0 interest in sustainable lifestyle products or who wouldn’t typically be swooned by cutesy lunch boxes at all, you are basically just burning away your advertising budget.

With targeted advertising, you target your ad campaigns at an specific audience, based on (for example) demographics, location, interests or behaviours. Based on these traits, you’ll be able to create more personalised ads that resonate with your target audiences and lead to higher conversion rates.

If you were to apply targeted advertising to your Bamboo Lunchbox campaigns, you could opt for targeting commuting men and women, ages 18 – 45, that are living in the locations you ship to and have an interest in sustainable lifestyles and travelling.

This way, you can show your ads to an audience that is far more likely to be interested in your offer. A downside of targeted advertising could be, however, that you decrease your audience pool too much by making it too specific. It takes a little practice and some common sense, but you’ll surely get there! 

In short: By serving ads that are targeted, you’ll be more ensured that only those people who are potential consumers will get to view your ads, thus increasing efficiency and decreasing costs. 

An important step in knowing what audience to target is by creating an advertising funnel. Definitely read on if you want to learn more about that!

Building an advertising funnel

So, now that you understand what targeted advertising is and why it’s so important to apply to your online campaigns, it’s time to learn more about one of the most essential steps for advertising in general: funnel building. 

Funnel advertising is when businesses consider the different stages a consumer goes through in their customer journey when designing their advertising campaigns. This allows you to use the right advertising strategy for the right customer at the right time. 

Building a solid funnel is the key to running successful ad campaigns. This applies not only to Google and Social advertising but typically to all sorts of marketing campaigns or activities. Think of a funnel as the foundation of your campaign strategy. It’s basically the way you would want to let your target audience flow to your desired goal. 

If you are looking to (e.g.) drive more traffic to your website, generate more customer signups or sales, building a funnel is definitely a must-have. Building the foundation of advertising strategy is all about:

  • Structure

Building a funnel will help you bring some structure to your audience targeting approach. Think of it as the blueprint for all of the possible audiences you would be trying to reach.

  • Relevance

The structure your funnel provides, allows you to create more tailored and relevant ads to your audience. This is crucial for your campaigns, as relevance is one of the most important drivers of success for advertising on Google and/or Social.

  • Effectiveness 

By creating a funnel, you will be able to spend your ad budget more effectively and based on performance.

  • Measurement

By having this funnel (blueprint) in place, you will be able to quickly pinpoint failures and successes in your campaigns and enable you to make educated decisions and take learnings for future use

How does a funnel work?

Now that you know why building funnels is essential in the process of creating your campaigns, we’ll be going over the following: explaining how a funnel is constructed. 

Usually, a funnel looks like an upside-down pyramid with different layers

You might have already come across the (green) funnel you can see here. This funnel is often referred to as the Decision-Making Funnel. While this is not the funnel we’ll be talking about, it’s good to know what this funnel is and why marketers use it. 

From the initial stages when someone learns about your business (awareness), to realising that they have a need that must be met (consideration), to the purchasing stage(decision), this funnel map routes to conversion and beyond. 

With careful analysis, this marketing funnel lets you know what your company must do to influence consumers at certain stages. By evaluating your funnels, you can potentially drive greater sales, more loyalty and stronger brand awareness

 

Decision-Making Funnel | An Introduction to Targeted Advertising | The Next Ad

 

Alright, on to the advertising funnel we’ll be working with.

Though several versions of advertising funnels can be found online, it usually comes down to a three-layered filter or funnel.

 

Advertising Funnel | An Introduction to Targeted Advertising | The Next Ad
These three layers consist of:

  • a top layer (unaware consumers),
  • a middle layer (aware potential customers)
  • a bottom layer (direct leads).
  • In the top layer, you’ll have ‘potential customers who are not aware of your company but are potentially interested in your product’.
  • In the middle layer, you’ll find ‘people who are aware of your company but currently don’t have any actual need for your products or services’.
  • And the bottom layer is filled with ‘people who are aware of your company and currently looking for your products and services’.

If you want more than just an introduction to targeted advertising and learn what exactly is in these layers and how you can build such a funnel for your business, download our Audience Targeting white paper for free here! 

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