Last year, the luxury automaker Lexus launched a single ad campaign that involved more than one thousand individual videos. Using Facebook’s audience segmentation technology, the campaign reached millions of hyper-targeted customers with unprecedented precision: A design-minded female executive living in San Francisco, for instance, would see a different video than a design-minded, vinyl-loving male exec in Los Angeles. The award-winning campaign vastly surpassed its goals, reaching 11.2 million Facebook users with a video view rate 315 percent higher than expected and a 1,673 percent higher engagement rate. Behold the power of personalized video advertising.
Digital display advertising is more popular than ever. In January, eMarketer projected that 2016 will mark the first time display spending exceeds search ad spending in the United States, with $9.59 billion devoted to video—up from $7.46 billion in 2015. That rapid growth in video consumption, expected to reach nearly $15 billion by 2019, is no doubt thanks to the recent premium on mobile experience. Mobile video ad spending climbed 80.6 percent last year, per eMarketer, beating out desktop for the first time. And yet despite video’s primacy, personalized video is still fertile, untested ground—the Lexus “1000:1” campaign, already a year old, remains a gold standard. As marketers may soon discover, however, one thousand videos are merely the tip of the iceberg.
In the broadest of strokes, a personalized video advertisement laser-focuses on a customer’s interests with far greater precision than traditional video advertising. Truly personalized video requires advertisers to offer consumers experiences relevant to their backgrounds, tastes and personalities. And as consumers increasingly turn to digital content over broadcast TV, it’s no longer enough for advertisers to recycle broadcast ads on digital platforms like Facebook, Snapchat, YouTube, Hulu and Amazon.
According to Bryan Cook, executive content producer at Team One, the agency behind the Lexus campaign, “The simplest way to think about personalized video ads is that you take data that you have on individual consumers—where they live, what they earn, what their interests are, etc.—and then create ads that are relevant to those individual consumers based on that data. For example, if you live in Los Angeles and are into music and fashion, we can make an ad that contains all of these things so that you are more likely to pay attention.”
Social networks like Facebook and Twitter allow advertisers to identify smaller and smaller audiences—if they’ve got the chops to handle the data. “Most modern digital platforms can provide rich data to brands looking to be more relevant,” said Alastair Green, Team One’s executive creative director. “Ownership data, browsing and media consumption data, activities and hobbies are all available. In fact, everything that someone posts in the digital world could be used if you have enough assets and the pipeline constructed to create dynamic video ads.”
However, the biggest obstacle in creating effective personalized video ads is probably the logistical one—big data is, well, big, and hyper-relevance requires hyper-diligence. “It takes a huge amount of cross-discipline collaboration,” said Cook. “Media, creative, production, technology, accounts and many other departments will all touch a project like this. Working together in a very organized fashion is a must, as one mistake can decimate the budget and the schedule.” Scaling a campaign of this nature could cost brands hundreds of thousands of dollars in production costs but technology firms, such as Jivox, are making it easier for brands to tap into their first-party data and then dynamically insert personalized ads.
Cook also stresses that “you need a creative approach flexible enough to stretch across thousands of ad units; a production pipeline that is capable of creating all of those units with minimal chance for human error; and a trafficking process that is capable of QC’ing, tagging and then delivering all of those assets in such a way that they can be served seamlessly.”
But the opportunities offered by personalized video advertising are likely well worth the hurdles. Jason Beckerman, CEO of Unified, a marketing intelligence platform that collaborated with Team One on the Lexus campaign, sees game-changing possibilities even in the immediate future. “The 2016 presidential election will see candidates embracing personalized video to reach undecided voters or to sway voters who currently support their opponent,” he said. “U.S. consumers should expect to see a lot of video from both campaigns between now and Election Day.”
It’s a compelling prediction. Suppose a candidate insults veterans during a speech or the family member of a veteran, the opposing candidate could then serve you with an ad that contains the video of the offending speech. The ad could be tailored further to your religious affiliation, career and other personal tastes. According to Beckerman, “the possibilities are really limitless.”
In the long term, he said, “connected television, digital radio, websites and mobile applications, and eventually, the coming wave of virtual reality-enabled devices and applications will all deploy personalized video conjoined with the power of identity graphs.”
With great power, of course, comes great responsibility, and marketers must walk a delicate line when it comes to consumer data. “The growth of personalized videos could have a similar path as mass-media buying habits,” Green predicted. “We move from audience segments of thousands to hundreds, to eventually a segment of one. It’s certainly possible, but does it make sense financially? Will those ads get too relevant and become creepy?”
“Some brands and marketers will also get personalized videos wrong,” he said, “which might lead to backlash on the amount of data that brands have access to. Our industry has a responsibility to be careful with information we can mine and use.”