Intent Lab: Discovering Overlooked Consumer Opportunities

By tailoring advertising only to specific consumer needs, brands are making ads less useful and missing out on sales.

Hyper-relevancy is now prevalent in digital advertising, but may be backfiring for many brands according to a new study by the Intent Lab, a research collaboration between Performics and Northwestern University’s Medill School of Journalism, in partnership with Microsoft Advertising.

In this study, titled Overlooked Opportunity of Goal-Driven Consumers, the Intent Lab and Microsoft Advertising undertook an online experiment of 3000 U.S. consumers that examined whether being relevant to specific consumer needs is too limiting. Marketers strive for relevance, but is relevance only about providing consumers exactly what they ask for? Can marketers provide more assistance by predicting what else consumers may need to achieve their broader goal?

The research examined the likelihood of consumers to select a search ad result based on their mindset (Goal-Driven or Item-Driven) and the type of ad experience (Limited vs. Expanded). A Goal-Driven mindset is when the consumer has a goal in mind (e.g. build muscle) which can require a variety of products and services (e.g. protein powders, yoga mats, healthy recipes, gym memberships) to attain. An Item-Driven mindset entails a specific product or service that the consumer is directly looking for. A Limited ad experience is when the consumer sees specific ads based on an Item searched, while an Expanded experience includes ads associated/related to the Item searched, but not yet specifically asked for.

The study found that:

More than 50% of consumers are in a Goal-Driven mindset. While repeat purchasers search with an Item in mind (e.g. buying the same protein powder every month), new consumers to a category or brand are more likely to be in a Goal mindset. Brands have a 26.7% higher chance of finding a new customer when targeting the Goal mindset vs. targeting the Item-Driven Mindset.
Currently, no matter the mindset, most brands show consumers Limited ad results targeted to specific queries. But, 54% of Goal-Driven searchers continued to search, because they didn’t find what they were looking for. Consumers who are newer to the category are particularly unsatisfied with the digital ads they see (35% satisfaction for new customers vs. 43% satisfaction for consumers with average familiarity and 53% for experts).
When presented with an Expanded set of ad results with associated products related to their goal in the ad mix (vs. Limited), consumer perception of usefulness of ads increased by 10%
New consumers are 1.9X more likely to click on an ad for an associated product/service (vs. consumers with average familiarity with the category) and 3.8X more likely to click than experts in the category