Could this be the digital ad industry’s magic bullet? Connecting online ads to offline sales

*Originally posted on VentureBeat

At the heart of digital advertising is a problem that’s existed since the industry began. It’s really a simple issue — the marketing mix is missing a crucial element. But in its simplicity lies its complexity, because that crucial missing element is the consumer.

To a large extent, brands are still advertising to anonymous consumers. Search advertising paved the way for the first major shift in digital advertising: put an ad in front of consumers looking for that particular product at that very moment in time. The second transformational shift came in the guise of contextual advertising where ads matched the content on webpages, enriched by behavioral targeting that shows more relevant ads to consumers based on their interests or what they’ve done in the past.

While these tactics have propelled the industry forward, advertisers still have no idea if they have a relationship with the consumer viewing their ad, and as important,no clear-cut way to conclusively tie online marketing efforts to offline purchase decisions. And so there remains a tremendous amount of inefficiency and waste in media spend today.

This is the crux of the next big transformational shift in the industry: bridging the gap between online ad exposure and in-store sales.

The advertising landscape today

Three letters prevent advertisers from connecting the dots between concrete sales and marketing spend: ROI. At a time when marketers are held increasingly responsible for driving revenue growth, this is a kind of a big problem.

Additionally, while brands are racing to drive meaningful, relevant experiences to their customers, if those audiences are just faceless, nameless collections of demographic, keyword, and behavioral data, that becomes an impossible task.

Companies like Viant are in the process of unveiling the customer behind the data: moving away from anonymity and leveraging the actual identity of the person to drive more customized brand experiences and deliver on ROI.

It’s not just about meeting perceived intent driven by search terms or behavior dictated by browser cookies. It’s about actual identities. “The single data point that transfers between the online and offline world is who the consumer actually is; the identity,” says Viant CEO Tim Vanderhook, “because your identity is linked to your method of purchase, your loyalty card, and when you come online through unique audience-based platforms.”

It’s a simple concept with complex implications. It starts when a consumer registers online and provides their email, arguably the most important piece of data about someone because that then begins to connect everything else, on and offline. Through its ownership of MySpace, Viant has been able to gain direct relationships with what it says is a billion consumers globally. In so doing, Vanderhook says, “We cover 65% of the households in the U.S… [and] our focus has been reactivating those relationships.”

But the goal isn’t just about securing a foundation of prospective customers for ad delivery. Vanderhook is in the midst of solving the challenge of connecting users, and their online identities, to what they do offline.

The biggest challenges to concrete ROI

Several breakthroughs in digital technology have attempted to bridge the gap of online ad exposure to in-store purchases, but actually tying online lead data to offline sales remains the industry’s unicorn. For this unique challenge, Vanderhook explains how Viant’s Advertising Cloud and its Identity Management Platform can help.

Viant’s Identity Management Platform has the ability to match a consumer’s registration data to the client’s database of known customers, and to data in retail POS systems, effectively marrying the star-crossed lovers that are online advertising and offline sales.

Vanderhook illustrates the scenario this way: “Let’s say Tim Vanderhook was shown a Starbucks ad and had never been at Starbucks. When I go in and swipe my card, the name exists inside of the POS system, so you can anonymize that name, and we know Tim Vanderhook’s name because we showed him an ad five hours ago, and we anonymize the name using the same algorithm, so it produces a unique anonymized code that we can match and say, great, it worked: this person we showed an ad to went into the store and made a purchase.” This may be the missing link in how advertisers can connect transactional data to the marketing and advertising department.

The game changes when you progress from buying impressions targeted at anonymous users to reaching out to previous customers, or to leads you haven’t heard from in months or years. “All of that data’s now becoming available to act as triggers for always-on ad campaigns,” Vanderhook explains, “This really leads to the idea of trigger-based advertising; rules-based automation.”

Think of a consumer who’s just purchased a new camera or smart TV and next day is shown an ad showcasing unique ways the product can be used, or valuable accessories that can enhance the customer experience. Or a jewelry store’s customer who receives personalized ads timed for days they’ll be in a buying state of mind: Valentine’s, spouse’s birthday, anniversary. That customer’s marketing experience just got more enriched and personalized.

Vanderhook is already quite optimistic about the future of digital advertising: “Imagine walking into a store and the sales person already knows you, your past purchases, and your sizes and preferences.”

“It’s certainly going to get there,” Vanderhook guarantees, “because in the end, building a brand is about creating a great experience for customers, and a lot of these technologies are going to be continuously applied to business to drive better consumer experience which ultimately increases brand value.”

With the shift towards people-based advertising, there will no longer be a disconnect between ad spend and offline sales. According to Vanderhook, the industry is looking forward to the next biggest transformational shift in digital advertising.

Check out the video below to see Viant’s Advertising Cloud explained.