Purpose Creates Context

By Dan Ratner

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Recent regulations have driven industry-wide attention to privacy concerns in online advertising and marketing. The passage of the CCPA and GDPR spurred Apple's iOS 14.5 release and Google's impending removal of third-party cookie functionality from its products. In response, some AdTech/MarTech platforms have attempted to cobble together alternative schemes that replicate the promises of cookie-based identity targeting, while others are returning to a previously popular alternative: contextual targeting.

Google's search engine advertising provides the most successful and long-running example of contextual targeting. When a person uses Google to search for a term, the results of that search arrive alongside advertisements selected, for the most part, according to their relevance to the term. Google's contextual ads work so well because many search terms naturally relate to products or services.

However, beyond the case of search advertising, advertisers often face a different challenge: finding relevant context that is effective. Let's consider display advertising for CPG, banking services, or even automotive. If marketers think of a publisher's content as analogous to a Google user's search term, they will often find limited opportunities where ads in those verticals resonate enough to build brand equity and purchase intent. There are exceptions, but for most advertisers there simply isn't a lot of highly valuable brand-, product-, or service-relevant content to target.

But there is a way to create context without incurring the expense of generating branded content or relying on earned media. An advertiser can find in-the-moment relevance beyond the shallow domain of products and services by engaging with something that people deeply care about: purpose.

Research from Edelman and Porter Novelli have shown that people overwhelmingly prefer to buy products from brands that agree with their personal values. More than 60 percent of U.S. consumers identify as purpose-driven, and purpose is now a top three purchasing criterion along with quality and price, edging out reviews and status. "Purpose,"— whether expressed as social good, impact, values, cause, or ESG — is unique in its ability to build trust, increase purchase intent, and develop positive brand equity.

Purpose and context are natural complements. When a brand integrates purpose, the brand can engage in a conversation with its customers about experiences and consequences, not just about its products and services. This can be seen clearly in campaigns by Patagonia, REI, L.L. Bean, and Orvis. The ads clearly project that they are not just selling hats, coats, and boots, but also promoting experience with the outdoors and conservation of nature. This message resonates with the brands' consumers; these brands have eye-popping NPS scores in the 50 to 80 range. These brands can put their message next to any content relating to their purpose, and there is plenty of great content published daily about everything from wildlife to climate change. Many of the outfitters' ads don't feature a product at all.

There are many more examples. Nestlé seeks to eliminate child hunger. Unilever wants to drive a sustainable supply chain. Target is taking a stand on diversity, equity, and inclusion. Each of these purposes unlocks orders of magnitude more inventory of high quality, brand-safe content and placements than traditional contextual targeting could ever make available for an individual product. Not only that, but a purpose-oriented ad in contextually relevant content contributes back to the content, rather than distracting from it, enhancing the consumer's experience with both publisher and advertiser.

Put it all together and it performs. Public Good has measured purpose-oriented, contextually targeted ads for dozens of Fortune 500 companies. The benchmark engagement rates top 1 percent (vs. basis points for programmatic display) with commensurate outperformance in secondary measures including conversion, brand lift, and purchase intent. We've also found that strong purpose-oriented creative can drive results unheard of in programmatic display: above 2 percent ER in many cases.

The bottom line is that traditional direct-response ads don't map very well to contextual targeting, but purpose does, and with it all the benefits of trust, privacy, and compliance. It can also open high-quality content that is less expensive because it's less competitive. Ultimately, the brands that will win with contextual targeting are the ones that realize that the key to unlocking it is to marry context and purpose.

The views and opinions expressed in Marketing Maestros are solely those of the contributor and do not necessarily reflect the official position of the ANA or imply endorsement from the ANA.

Dan Ratner is an entrepreneur, technologist, and writer. He's co-founder and CEO of Public Good, the leader in connecting the news with actions people can take to make a difference in the world. Dan loves explaining technical topics to nontechnical audiences and is the co-author of two books on nanotechnology, a white paper on the importance of social causes to brands, and is flying solo on an upcoming novel about Marco Polo. Dan is also a board member of Cure Violence Global, the world's leading anti-violence NGO. Previously, he was part of the technology leadership team at Obama for America 2012 and CTO of Sittercity, America's first and largest service dedicated to finding quality care online. He serves on the investment committees of RMS Management and Impact Engine Fund IV as is on the board of The Max Collaborative, a national real estate development company. He lives in Chicago with his incredible wife Genevieve Thiers and amazing twin sons Leo and Ari.

Dan's previous speaking engagements include talks at ONA, CUSP, The Bill & Melinda Gates Foundation, Northwestern's Kellogg School of Business, The Brown University Entrepreneurship Center, Microsoft, and The Booth School of Business at the University of Chicago. His writing has been published globally in six languages in outlets ranging from USA Today to The Bulletin of the Atomic Scientists.
Dan is passionate about using technology to make the world a better place by empowering everyone to make a difference.