The Benefits of Data-Driven Advertising; Insights and Examples

Data-driven marketing is on the rise as consumer data becomes more and more important. There are a variety of ways to source data in the modern era as businesses continue to find new methods to engage with consumers, such as providing customer loyalty programs and driving relevant social media discussions. With increased accessibility, there is an immense opportunity to better understand your desired audience's needs, preferences and behaviors. Advertisers can achieve this deeper understanding through the process of data-driven advertising. 

Data-driven advertising is an approach to advertising that uses data and analytics to inform and optimize advertising strategies. Using data and analytics to create more personalized marketing campaigns can improve customer engagement, efficiency, and scalability within your brand's advertising efforts.

Benefits of Data-Driven Advertising

Better Customer Insights

One way data-driven advertising provides better customer insights is through data segmentation. By segmenting customer data into different categories based on behavior or demographics, businesses can create more targeted ad campaigns that speak directly to each segment's needs and interests, resulting in higher engagement and conversion rates.

Another way data-driven advertising provides better customer insights is through predictive analytics. By analyzing reliable customer data, you can predict future customer behavior and needs, allowing you to create ad campaigns that anticipate these needs and provide solutions before the customer even realizes they need one. This results in improved customer satisfaction and loyalty.

Finally, data-driven advertising provides better customer insights by allowing brands to track and analyze customer behavior across multiple channels. By collecting and analyzing data from various touchpoints, you can gain a holistic view of the customer journey and identify areas for improvement. This paves the way for you to create campaigns that provide a more seamless and personalized experience for the customer.

For example, Lane Boots, a fashion-forward leather boots and accessories designer, used AdRoll’s Shopify integration to organize all of their customer data points into a single dashboard. Lane Boots then ran relevant campaigns based on data AdRoll has collected from customer engagement, including shopping cart abandonment, product page visits, and previous purchases. Knowing which messaging and creative styles work with each audience segment allows for effective communication both through emails and on their website. More effective communication leads to more happy customers, as Lane Boots learned after this strategy increased their return on ad spend (ROAS) by 6x. 

More Effective Targeting and Personalization

One of the significant benefits of data-driven advertising is the ability to target specific audiences based on demographics, interests, behaviors, locations and more. This targeting allows businesses to reach the right people with the right message at the right time. On the other hand, personalization refers to customizing ads to match these specifications. 

Combining targeting and personalization creates highly effective and engaging ad campaigns that speak directly to customers’ needs and interests. This results in increased brand awareness, customer loyalty and, ultimately, higher revenue. An example of successful targeting and personalization in data-driven advertising is Navigation.com (powered by HERE). This GPS navigation system utilized AdRoll’s Growth Platform to segment, run, and track its digital campaigns. With AdRoll’s support, Navigation.com segmented audience groups by car brand, make and model, while delivering customized messages to returning website users allowing them to identify the channels and conversion paths with the most impact on revenue. Navigation.com was then able to engage with a growing list of potential customers, boost brand awareness and drive business growth, resulting in a consistent ROAS. 

Improved Performance and ROI

Improved performance and return on investment (ROI) are two more significant benefits of data-driven advertising. With the help of data analytics and insights, businesses can optimize their ad campaigns to achieve better performance and higher ROI. One of the ways your brand can achieve this is by reducing wasted ad spending on ineffective campaigns. Data analysis can reveal which campaigns are driving conversions and which ones are not. By eliminating or adjusting the campaigns that are not performing well, you can save money on ad spending and allocate more resources to the strategies that are generating the most revenue.

Furthermore, tracking and analyzing ad metrics can provide valuable insights into how customers interact with ads. You can use the information to improve ad content and placement to maximize engagement and conversions. With the ability to continuously optimize campaigns based on data-driven insights, you can achieve better performance and ROI over time. AdRoll’s customer, Burke Decor, a chic boutique for interior decorators and do-it-yourselfers, saw their ROI increase by 13.4x after centralizing marketing campaign data to identify high-intent customers.

Addressing and Overcoming Data Privacy Concerns

While data-driven advertising offers numerous benefits, businesses need to ensure they are properly addressing growing data privacy concerns while adhering to evolving privacy regulations. 

Data privacy concerns can arise in a variety of ways. For example, over four-fifths of consumers are concerned about how companies use their digital data. Consumers may also be worried about how their personal information is collected and shared or how their online activity is tracked and monitored. Addressing these privacy concerns is critical to maintaining consumer trust and building long-term customer relationships. One way to do this is by being transparent about data collection and usage practices. Offer transparency by providing clear and concise privacy policies and obtaining consent from consumers before collecting their data. 

Another way to address privacy concerns is by partnering with a trusted data-driven advertising platform with a strong track record of compliance with privacy regulations. AdRoll, for example, has built a free cookie consent tool to help customers comply with GDPR regulations and the ePrivacy Directive. Additionally, AdRoll is continuously reviewing the quality of email campaigns to ensure content policies are always adhered to.

Diving Into Data-Driven Advertising

Data-driven advertising has become an integral part of digital marketing. It allows businesses to leverage the power of data to make informed decisions and create targeted ad campaigns that resonate with their customers. Take advantage of the opportunity to optimize your advertising efforts and drive growth for your business — consider implementing data-driven advertising strategies with AdRoll today.

Last updated on April 21st, 2023.