Xandr Survey: Ad Industry Turning to Tech for Relevance

Consumers respond to better targeted ads
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Continuing to stake its claim to improving advertising by making it more relevant, AT&T’s Xandr advertising unit has released a study that shows that its technology can make consumers more receptive to marketing messages.

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At the same time, Xandr said it found that the industry is receptive to its message that with consumers tuning out ads, campaigns have to use more data to make them more targeted.

“The industry recognizes that change is inevitable, and that data and technology can solve many of the fundamental problems with the current state of advertising,” the report concludes. “Relevance is the key. Precision-targeting messages directly to the consumers to whom they are personally relevant can reduce the waste of ads going to consumers who instinctively tune them out. It can create elevated, impactful advertising experiences, and in so doing, help to overcome the industry’s defining challenge.”

Related: Ad Views in On-Demand Shows Up 26%: FreeWheel

Xandr is building a system for serving TV ads that fellow AT&T unit Turner plans to take advantage of to increase the value of its ads by making more of them addressable. Xandr also wants other networks to use its technology, which would compete with Comcast’s FreeWheel and Google’s DoubleClick, which earlier this month won The Walt Disney Co.’s digital advertising business.

Xandr’s survey found media and advertising executives frustrated by the performance of their campaigns and looking for a better way to reach consumers.

In the survey, 52% said “I am not confident that currently available media metrics accurately measure my media investment,”46% said “I am often frustrated with poor ROI,” 44% said “My current media-buying and planning infrastructure is dated and not up to the task of effectively operating in the new media landscape.”

Technology may be any answer those advertisers can adopt. In the survey, 76% said “media providers/platforms that offer advanced targeting techniques, delivering the right ad to the right consumer are key in creating a better user ad experience,” the report said. 

According to the survey, 71% said they believe that using advanced targeting techniques would improve advertising ROAS/ROI. And 67% said that “with consumers now viewing content across devices, audience focused advertising is the ideal solution.”

But the industry has been slow to move in this direction. The survey found that 38% of the executives said their company was ahead of the curve versus 62% who said they were either followers, hesitant or laggards when it comes to their ability to adapt to the evolving media landscape and changing consumer media habits.

“But we are now at a tipping point, with the majority of the industry looking to enter the next stage of media distribution,” the report said.

The consumers surveyed said they were more likely to pay attention and respond to more relevant ads.

Xandr said “our research identified relevance as a crucial factor in consumer engagement in the current media landscape. More than half of the consumers we surveyed, 57%, said that ads are not relevant to them and they therefore don’t pay attention. 66% of consumers wish advertisements were more relevant to them and to their lifestyle.”

In an interview, one consumer told researchers that “if an ad is showing something that I’m really interested in, then I don’t mind seeing it. But if it has no use to me, then I mind.”

The report outlined a formula for making ads relevant: Meet a consumer need, meet a moment in time and evoke an emotion.

The survey found that 72% of consumers said they like discovering new products through ads, 76% like when ads tell them something relevant that they didn’t know. And 79% said it’s a great feeling when a brand helps them find a product they didn’t know they wanted.

“The key is knowing whether or not something is in fact new to the consumer. Algorithms tend to rely on past behaviors as predictors of future purchases. But consumers are less interested in things they have already seen or even bought. This approach is reactive rather than proactive, and it is not working as well as it could,” the report said.

The survey found that 71% of consumers said they like when ads make them feel something and 70% said they like when advertising goes beyond selling a product.

“Through the emotional chords they strike, ads can instill the sense that the company behind them has integrity, credibility and authenticity. If an ad gives consumers the right feeling about the advertiser, they are far more likely to want to align themselves with it by buying a product or service. However, customer relationships cannot be built only on a general sense of authenticity. The ad must be relevant to the individual consumer. It must be perceived as authentic to them personally,” the report said.

When ads are relevant, consumers actually enjoy them, the report said. According to the survey, 91% said they appreciate brands that do anything to make their day easier, and 77% say that the best brands improve their lives in ways they didn’t know they could.

Bottom line, the report found that relevance creates memorable advertising experiences. Consumers who had positive experiences with ads were more likely to share them on social media (17%), investigate the brand further (35%), recommend it to friends and family (29%), and ultimately make purchases (27%).

Xandr conducted the survey with Insight Strategy Group and collected survey data from 3,022 consumers nationwide. It also assembled a 16-member panel of consumers who kept attention diaries and conducted ethnographies with people in urban and rural areas.

To get industry reaction, Xandr worked with Advertiser Perceptions to survey 500 brand and marketing professionals who spend more than $1 million on TV and digital video advertising. 

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