What Is Tailored Advertising?

Tailored advertising places an emphasis on the needs and wants of a small set of people or an individual consumer, as opposed to a mass audience. Tailored (or targeted) advertising may focus on any number of specific demographic characteristics, habits, identifying traits, behaviors, or contexts of consumers. For example, advertisers will tailor a message or promotion to a target consumer's gender, race, income or educational level, employment, personality, interest, lifestyle, values and more. They may also tailor an advertisement or promotion to an individual's internet search habits, purchase history, or other online activity. Such focus on personal information, enabled by the internet and especially by social media, allows advertisers to better target messages to consumers and reduce waste as compared to traditional print, radio, and billboard advertising.

Key Takeaways

  • Tailored advertising is when companies specifically target and tailor their promotions to a specific type of customer based on their age, gender, or other demographic information.
  • Information used in tailored advertising can come from social media profiles, Internet behavior, and more.
  • Tailored advertising tends to be more effective than traditional advertising, since it reaches potential customers based on research.

Understanding Tailored Advertising

Tailored advertising enables advertisers to serve customers with highly targeted communications to vetted customers. It has become a more common technique with the advent of the Internet since companies are able to track individual consumer behavior more readily. Advertisers readily utilize information culled from social media profiles and usage, search engine use and habits (using cookies), viewing habits on internet protocol enabled televisions, and television viewing and web browsing habits to serve ads. In addition, advertisers can serve ads based on socioeconomic groups, typical behaviors based on the time of day, and a potential customer's location and behavior. With all of this information, advertisers can build a reliable picture of a potential customer's attitudes, opinions, hobbies, and interests. Advertisers may also create tailored advertising based on past product viewing or purchasing habits of consumers in what is known as "retargeting."

Effectiveness of Tailored Advertising

Tailored advertising allows advertisers to reduce waste by avoiding serving advertising to an unreceptive individual (one unlikely to buy an advertised product or service). In addition, content marketing has shown to be more effective than traditional outbound marketing while costing far less. It also may reach more potential customers with a message since most people skip television advertisements and about half ignore direct mail.

Tailored Advertising Examples

Tailored advertising may involve providing a coupon for a specific type of good or service based on the past purchases, using demographic information to present an advertising message to a particular market segment, or running a campaign designed for a specific city or metro area. Because it is more specialized, tailored advertising tends to be more expensive to develop than mass-market advertising.

Another example has a consumer buying milk at a grocery store where he is a member of that store's loyalty program. The loyalty program collects information on that consumer's shopping habits and is able to compare what this consumer purchases with what other shoppers purchase. The information it aggregates suggests that most consumers buying milk also buy bread. At the checkout, the store may print out a coupon for 10% off the price of bread.