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In the first half of 2016, UK digital advertising expenditure increased by 16.4%, equivalent to £4.78 billion – the highest increase in two years, per new figures from IAB UK.

This was driven primarily by mobile ad spend, which rose by 56.1%, contributing £1.7 billion alone. For every £1 spent on digital advertising 36p now goes to mobile, up from just 4p five years ago.

It’s an impressive growth that reflects just how important mobile devices are to consumers – and thus marketers. Consumers are spending more time than ever before on their smartphones and brands have woken up to the fact that their target audiences are essentially carrying a mobile ad platform in their bag or back pocket wherever they go.

Nonetheless, without a sophisticated and highly personalised strategy to support your digital advertising spend, this is not necessarily money well spent. To use data effectively, and show a positive return on their significant investments, UK businesses should consider the following three factors:

  1. Budget

Instead of spending money on an expensive data modelling project, you should review all the customer data you already have on file. Get to know who your loyal customers are, investigate your existing mobile conversions and assess if your current campaigns are providing any real value.

Your campaigns should always give you cost-effective insights into how your customers are engaging with your brand. Who are they, what are they buying and when are they buying it. This will enable you to communicate with them far more effectively – and ultimately get the most bang for your buck.

  1. Enhance your performance

Your advertising campaigns need to be regularly reviewed and analysed – with customer retention, rather than acquisition, in mind. Loyalty translates into positive results: a customer who shops at your store for their whole life is worth 100 times more than someone who pops in once. It’s your existing customer base who will earn your company more money.

It’s always nice to have a large acquisition budget, but bear in mind that it won’t necessarily translate into higher profits. Split the resources more profitably to also focus on retention and customer experience, and design targeted campaigns that will first and foremost strengthen your existing customer relationships.

  1. Identify your targets

The only way you can truly maximise your ROI is to segment your data and focus all your efforts (and money) on speaking directly to the customers who are most likely to engage with your brand. For example, in the long run, it’s more cost effective to create different versions of a creative to serve up to different segments so that customers always receive the most relevant ad. Digital advertising enables you to specify the frequency, time of day and channel that your customers see your ads, so ensure that you know who your ideal customer is and how best to target them.

Not every customer is worth your attention. Those are who more likely to return items, or use the call centre, could end up costing more in support than they contribute to your business. Focus on the people you want to attract and exclude the ones you don’t.

A spray and pray approach that targets any and all customers is a misguided use of your digital advertising budget. Businesses are under pressure to keep up with their competitors and spend more money on digital, but if their efforts are not reaching the right people – they won’t get the right results.

 

 By Jason Lark, managing director, Celerity