Contextual marketing is one of the most disruptive forces to explode into the marketing discipline since the mantra of all marketers – price, product, placement and promotion – came into being. In fact, says Harvard Business Review, it is set to throw the ‘Four Ps’ approach ‘into constant flux’. It’s a technique that takes user information from a variety of sources – web browsing or online location check-in for example – and uses it to deliver precise, relevant, tailored content, to the right people, at the right time.
Today’s marketers may well be digital-savvy analytics experts, but contextual marketing adds an entirely new dimension to customer engagement. Marketers, avoid this at your peril. Here’s why it’s more important, and more relevant, than ever:
- It fits perfectly with a device-driven market and a shift in customer lifestyles
1.3 billion smartphones were shipped in 2014, and we’re not just using them for calls: research1 shows we’re spending more time accessing the Internet using smartphones than via our PCs. There’s no doubt that smartphones and other mobile devices are enabling contextual marketing. The more time we spend connected to the internet through our devices, the more information we’re sharing. Along with the rise in devices, we’re seeing a less community-focused society, now geared towards individual status and achievements. Contextual marketing is a perfect fit: mass marketing, irrelevant and untargeted, has no place in the marketing industry, and it seems even more intrusive when sent to our devices which are personal to us. Conversely, tightly targeted marketing messages, sent to individuals at the right time, in the right place – retrieved from whatever device we want – can be extraordinarily successful, driving customer retention, creating new sales and adding depth to our omnichannel world.
2. It empowers customers and consumers
Contextual marketing puts customers and consumers firmly in the driving seat. Firstly, because they can control their device settings to limit advertising, or choose to opt-in to allowing location-based services on smartphones. And opt-in, they do: research2 has found that 74% of consumers with smartphones choose to use location-based services. Note the word ‘choose’: businesses empower consumers with choice, as they choose to use these services due to their relevancy at that point in time. Secondly, because consumers are freed from restrictive, expiry-date driven marketing. No-one is sending them to a website, or making them wait until the weekend for an online sale. Contextual marketing suits the desire for instant gratification: those companies which respond instantly to consumer demand are rewarded, and pushing content to the customer at exactly the right time is a great way of doing this. And thirdly, because, by sending precise and accurate messages directly to consumers, firms are removing the need for them to sift through the marketing clamour to get to what they really want, freeing them from the noise generated by the Internet.
- It fits with the economic climate
Post-austerity, consumers love a bargain – more so now than ever. Armies of thrifty consumers refuse to buy anything online until they’ve found a coupon to reduce the cost or used a comparison App to secure the best deal. Contextual marketing fits here perfectly, with hyper-targeted messages sent at exactly the right stage of the buying cycle, with offers appropriate to the customer. It’s cost-effective to deliver, and it generates revenue. But don’t worry, it isn’t quite sounding the death-toll for the billboard just yet: yes, expensive, one-size-fits-all marketing might seem crass and expensive by comparison, but clever above-the-line advertising techniques still have their place. Digital marketing teams can integrate above-the-line within a contextual marketing campaign, with cameras embedded in smart interactive billboards to record views, and send reactive messages accordingly.
- It uses location intelligence
Contextual marketing uses data drawn from different sources to create a precise buyer profile and analysis of buyer behaviour. Location intelligence technology is critical to this, as it enables place and position to be worked into the marketing strategy. There is more location intelligence available to us than ever before – points of interest, in-building maps, building footprints. Location data adds value to a customer relationship, and more and more marketers are boosting their success rates by incorporating it into their marketing strategy.
No longer about the marketing ‘four Ps’, location-based intelligence has instead facilitated the ‘four Rs’:
Leveraging location intelligence adds a new dimension to marketing. It’s the reason contextual marketing came out of the marketing departments and into reality.
- It works
Whilst contextual marketing is still in its infancy, businesses sharing their success rates are not hard to come by. Take the Western European mobile phone operator, which generated 64% year-on-year revenue growth and improved customer satisfaction from contextual continuous engagement. Response rates and conversion rates are from five to twenty times higher than the results from conventional online advertising, according to Nathan Hull in The Guide to Internet Marketing.
It’s cost-effective: you’re not shouting with a megaphone hoping someone will respond, but sending a valid and personal message, generating a one-to-one relationship. And it needn’t be complex: now, companies such as SAP are offering Contextual Marketing platforms, so you can benefit from the dynamic nature of contextual marketing and respond in real-time, with accurate content, reaching the consumer at the exact point of need.
It permits businesses to foster a two-way instantaneous dialogue with customers, by using such techniques, combined with devices and technology, in order to more adeptly adjust on a regular basis. This can affect Net Performer Scores and other ways by which a customer’s experience will be enhanced.
With contextual marketing, the physical and digital worlds fuse to boost results and deliver the ultimate in smart marketing. It’s a game-changer – and one that will create impact for your organisation.
1 Nielsen, Digital Consumer Report 2014