Targeted Advertising

WorthingGooner, Going Postal

A little while ago I paid my bill at the Supermarket checkout and along with my receipt I received a voucher for a £1 off Tena Lady pads! I wondered why I had been targeted for a product I had no use for and had never purchased. Then I realised I had just accidentally tendered my mother’s Clubcard instead of my own so the system had leapt into action and misidentified me. In the supermarket I am normally targeted with vouchers for items that I use and so I never usually think twice if I get a voucher for 10% off bacon or a fiver off fuel when I have spent £60. It got me thinking about just how all invasive Targeted Advertising has become.

WorthingGooner, Going Postal

Some of the earliest forms of Targeted Advertising came when you sent off to buy something advertised in a newspaper. Not only did the company selling the item add you to their mailing list but they would share your details with other businesses within their group. Some bright spark realised that there was money to be made here and these mailing lists could be sold to other businesses. Of course it didn’t stop there, if you put all those people into a spreadsheet together with what they had bought you could sort the list by product, gender or whatever other  information you had gleaned and sell a list targeted at say men who bought a shirt. This, of course, saved a fortune in postage and printing by not wasting your effort on people less likely to buy what you were advertising.

When I started working in the Office Fit Out and Refurbishment industry my new employer had a huge mailing list of past customers and companies that had made enquires. This spreadsheet was quite a mess and was mainly used to print out address labels to stick on advertising leaflets to be posted out. Every few months the MD would think it time to do another round of advertising. In a back room there was a “stuffing machine” that stuffed a leaflet into an envelope and sealed it down. A couple of the office girls then had the hated task of sticking the labels on the envelopes and sorting them into bundles by post code. These bundles where then put into Royal Mail sacks and they would send out a van to pick them up. By pre-sorting the Mail the company got a discount on the postage rate.

WorthingGooner, Going Postal
Envelope Stuffing Machine

In my previous job I had had quite a bit of experience using computers, spreadsheets and databases so I hated what I was seeing knowing that it could be done a lot more efficiently. Among the things wrong with the method of advertising my employer was using were the fact that they never seemed to update the list, just add a few names to it, it was only ever targeting people who had already heard of the company and it was not targeted by product. Every time they sent out a mail shot they got a large number of returns from companies that had moved or gone out of business. They also got returns saying the addressee was no longer with the company and of course the occasional request to removed from the list. I also noticed that there were several duplicates and even some triplicate entries. Nobody was designated to keep the list up to date so the same old mistakes kept being repeated. My guess was the method was at best 5% effective. The MD was very adverse to change, when I suggested he should make a few changes he replied that this system had worked for years so he saw no need to alter it.

Two things happened, shortly after I had spoken with him the old MD had a heart attack and on recovery became a half day a week company Chairman, while the new MD was much more approachable and was open to change. I suggested we should try a new approach. If we were to continue with the mailing list it needed a lot of work culling the useless entries and as a minimum adding what products the customer was interested in and e-Mail addresses so that we could try a new medium. The new MD agreed and several new fields were added to the spreadsheet. One of the office girls got the job of culling the list of useless entries. At that time we employed a Telesales girl and she was instructed to glean e-Mail addresses and to update the list when she was talking to leads. I set about the task of converting the spreadsheet into a database as that was obviously a far more flexible product that multiple people could use at once rather than just one with the spreadsheet.



The Chairman got wind of what we were doing and wasn’t very happy, but there was little he could do. He wanted to see the new system in use so we sorted a subset of the new database targeting people who had previously enquired about refurbishing office kitchens and breakout areas. The MD wrote an e-mail specifically aimed at selling this line with images of some past projects. This first run of e-mails brought in a lot of enquires and quite a few were converted into orders a far better result than the scatter gun posting method. What’s more it was far cheaper than posting out loads of leaflets. This was my first real encounter with Targeted Advertising and thank god it worked.

The Chairman wanted to have one last try at sending out a mail shot now that the mailing list had been tidied up (we deleted about 5000 useless names from a 28,000 list). The first improvement was that we were able to use the database to print names and address directly onto envelopes and we decided to test this new system with a subset based on a particular post code and product. The stuffing machine could insert a covering letter as well as the leaflets so we set it running and produced about 700 items as a test. Of course the Chairman thought this was wonderful and suggested that we do a full run, however the ancient stuffing machine had other ideas and failed in a spectacular flash, bang and shower of parts!  A replacement was costed and it was decided that it was just not an economic way to proceed as a new machine would cost about £10,000 to which had to be added the cost of envelopes, printed advertising, producing a covering letter, the girls time in sorting out the post and finally postage. We never sent out another mail shot.

Our new e-mail advertising system worked well, but still did nothing to bring in enquires from customers new to the company. We did do a small amount of advertising in trade journals but here we were up against much bigger companies with much bigger budgets than us. This form of advertising got the company’s name in front of some of the bigger builders who were looking for subcontractors but they were usually looking to get a quote to use to force down the prices of their regular subcontractors. We did get the occasional job but working for these big boys was never easy, especially when it came to payment terms. Talking with the new MD we decided that it would be far better to use our limited marketing budget to try to acquire customers directly. We settled on a three pronged approach. Firstly we would expand our e-mail database and secondly we would use, what at that time was fairly new, Google Adwords and finally we needed a web site to work with AdWords.

The first problem was how to acquire new company e-mails. We went about this in a couple of  ways, we purchased several lists of people we could target, such as purchasing managers and building managers and merged these into our database. We also picked up a lot of e-mail addresses from the internet, particularly for schools, colleges and universities. In those days these were perfectly legal methods, it is only in more recent years that there has been a crack down in sending unsolicited e-mails. We also made a point of asking anyone approaching us with an enquiry where they had heard of us from. We started a programme of regularly sending out Targeted e-mails and generated a steady stream of enquires. This clearly showed that our e-mail marketing was a very cost effective way of acquiring work.

WorthingGooner, Going Postal
Refurbished Office Kitchen

This was, of course, the early days of internet advertising. Who remembers searching using Yahoo or Ask Jeeves? We needed to spend our small budget on a search engine that would deliver sales enquires and it soon became apparent that Google was beating the rest. We hired a local company to produce and host a fairly basic website. It was cheap and nasty but it was quickly launched and just what we need at the time. Once it was up running we had the power to edit it and add to it, which was just what we did, turning it into a useful resource. Then we started using Adwords, paying Google to direct people who searched using specific words and phrases to towards our listing and then on to our website. In those days the first entry on a page was gained by the number of hits you got. These days the first half dozen businesses shown in search results will be paid for adverts (they all have Ad in the corner) it’s only after this that you get genuine results, With the unfathomable algorithms used by Google these days to decide page ranking, it’s impossible to know how genuine the results are.

If I am right Google now uses several criteria to rank pages that includes the relevance to the enquiry. These include the quality of the eventual web site (it should comply with Google’s latest rules), the click through rate ( the number of people landing on that result who click through to the website), the geographic relevance (if your looking for a local place to eat a place the other end of the country,  no matter how good, is useless) and the device being used (if your ad is designed to run on a desk top it will be useless on a mobile phone so several versions of your site may be needed). But don’t forget Google now works on “pay per click”, the owner of a web site bids for certain a word or phrase related to their business and pays this amount to Google when someone clicks through from the search listing to the website. In my old business if I offered to pay 20p per click every time someone searched on say “office Refurbishment West Sussex” and clicked through to my website from my listing I would be ranked below someone paying 25p per click all other things being equal. There is no arguing that this is Targeted Advertising and it works.



When I retired a few years ago, cold calling had disappeared completely and we were doing about 33% of our business from repeat customers and recommendations another 33% from e-mails and the rest from internet enquires. My understanding is that with the restrictions on just who you can e-mail that side is falling and the internet is rapidly becoming the major means of acquiring new customers.

Of course Targeted Advertising has also taken off in other directions.You only have to look for something on Amazon and you will see it in practice. I was contemplating a cruise and had a look at an online cruise agent. Within hours I was getting adverts from several other cruise agents and cruise lines popping up not only on Google but on many other unconnected websites. Much of this is your search engine, the website you are visiting or possibly your internet suppler using cookies to harvest the addresses that you visit, your IP address, your location and anything else considered relevant. They then use algorithms to gather it all together and use or sell the information on to advertisers. Google are probably the biggest in this kind of operation as they can pull in information from so many sources, Google search, Google Images, Google maps, Google Finance, Gmail, YouTube and partner sites and feed it into their network. If Google don’t actually have a particular piece of information they can often make a good guess at it from the sites you visit. Like football and visit the Liverpool FC site, you are probably male, visit a male clothing site and you are confirming the assumption. Also visit the Saga website and it will assume you are an older man and so on, building up a profile it can use or sell.

WorthingGooner, Going Postal

Social media is another source of Targeted Advertising especially for the likes of Facebook. If you sign up to many of the social media sites they will badger you to supply lots of data about yourself, much of it totally unnecessary to use the site. I tend to only supply the basics but the likes of Facebook will chase you to give them all sort of additional information like your phone number. Why should Facebook want my phone number, age and gender, other than to try to sell Targeted Advertising. Don’t forget Facebook is often used to harvest political information so that you can be targeted come an election.

Watch satellite or digital internet tv? Well some of the adverts you see will be targeted. The modern set top box or internet box is capable of sending information back to base about what you like to watch. Always watch Top Gear or Formula 1 and you are more likely to be fed Car related adverts, watch a lot of travelogues and you a likely to be targeted by Holiday companies. If you have Sky Q then the what you view information is also used to populate the Home page. A few weeks after getting it your preferred programmes will have become evident and it will be offering you programmes similar to those that you normally choose to watch as well as the channels you watch most. The clever bit is the use of the boxes IP address to opt out of some of the adverts broadcast by Sky and instead seamlessly insert an advert previously sent over the internet and stored on the reserved section of the boxes hard drive. Another thing about internet connected boxes like Sky Q is that Sky knows the boxes IP address and who has it and where it is. This can be used in conjunction with the likes of Equifax or Experian who hold lots of information about your credit history, criminal record and educational achievements all of which might be useful to advertisers.

Targeted Advertising can be a real pain at times for the consumer, especially when an advert follows you all over the internet. However there are sometimes things that are useful. I use a Kindle and have purchased books from a number of authors I like. Amazon are very efficient at sending me notifications when one of these authors have a new book out. But they also notify me of similar books by authors new to me and this has enabled me to find several good reads.

Without doubt Targeted Advertising is useful and cost effective for advertisers and its use is increasing. It will be interesting to see how it develops from here.
 

© WorthingGooner 2019
 

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