The Enduring Performance of Spend-Based Audiences
The best predictor of future purchase behavior is past purchase behavior. For digital advertisers, using spend-based audiences that leverage historical consumer spending data is the best way to achieve their campaign objectives.
The stakes are high for marketers in today’s digital advertising landscape. Quality ad inventories are constrained while CPMs are rising, even as new opportunities open up in retail media and Connected TV. According to Statista, 566 billion U.S. dollars will have been spent on digital advertising around the world by the end of 2022. Statista also forecasts that this number will increase to over 700 billion U.S. dollars by 2025₁.
So with more brands spending more money to advertise online, how can marketers be sure that their digital ads are reaching the right people—the consumers who are uniquely ready to spend with them and drive the best campaign results? The answer lies in leveraging the right data to ensure that their advertising is reaching their ideal audience.
The data sources used to create digital advertising audiences are diverse, but no source is more predictably reliable than individual-level consumer spending data. Intent-based and demographic data have beneficial functions in digital media targeting, but it’s spending data that can best predict what people are actually willing and able to purchase—with a single brand, with competitors, and across categories. Audiences created using historical spending data are the most effective digital media targeting resource for campaigns that drive revenue, not just response. To gain some insight into this topic, we spoke with Wiland’s Vice President of Digital Platform Sales, Kris Mann, about spend-based audiences and why digital marketers should be using them.
What is a Spend-Based Marketing Audience?
A spend-based marketing audience is one that is informed by individual-level consumer purchase data. This data is analyzed using AI-enabled predictive modeling techniques to create an audience tailored to achieve the client’s campaign goals. In the case of Wiland’s pre-built digital audiences, vast spending data is analyzed to create an audience uniquely ready to spend in a specific category or niche within the consumer economy.
The data sources used to create digital advertising audiences are diverse, but no source is more predictably reliable than individual-level consumer spending data.
Why Are Spend-Based Marketing Audiences So Powerful?
A great truth that has proven itself over and over is that the best predictor of future purchase behavior is past purchase behavior. Think about your own shopping and buying habits. You might browse the internet as you envision your ideal vacation, clicking links to check out the best-reviewed resorts at your dream destination or checking the costs of flights to travel there. Or you might add an aspirational “wish list” item to your shopping cart. While these intent signals are useful in their own right, Kris notes that there is a big difference between aspirational shopping behavior and actual buying behavior.
“Spend-based audiences are defined by what consumers are actually purchasing as opposed to what they might be shopping for or even what they may claim they are planning on purchasing,” says Kris. “Making a purchase represents a consumer’s commitment and an indicator of their priorities. So using that spending data—observed across a vast number of American consumers—is the most effective way of identifying an audience of people likely to become your best new customers.”
Kris notes that there are three main reasons why spending data is such a powerful predictor of consumer response:
- It indicates higher potential for future spending behavior because it represents actual purchase data, not just “shopping around” behavior.
- It confirms recent verified interest in a product or category.
- It confirms the capacity of individuals to make a purchase at a given price level.
Of course, spend-based audiences are only as powerful as the purchase data that they use. And the more diverse, detailed, and recent that data is, the more the potential benefits of using spend-based audiences are unlocked.
Here at Wiland, our proprietary data assets cover multiple dimensions of consumer spending, including donations to nonprofit organizations, digital and print subscriptions, purchases across diverse categories, social media engagement data, and more. This vast and diverse data paints a truly comprehensive view of a consumer’s spending behavior.
“By way of example,” said Kris, “even if your brand doesn’t sell skis, it could be important for you to know that a consumer is spending on ski equipment—there could be opportunities to market winter gear, lift tickets, winter vacation packages, or a snow sport publication to them. The purchase data verifies the individual’s commitment to spending both on a specific item and in a specific category, which is very powerful for marketers to know.”
When digital advertisers use audiences based on high-quality, permissioned, individual-level consumer spending data, they are equipped to improve the performance of their acquisition campaigns across all digital channels and achieve their revenue goals.
When to Use Spend-Based and Other Marketing Audiences
Kris notes that the best use for spend-based audiences is in targeted marketing campaigns in which revenue generation is the ultimate goal.
“Even if the scale isn’t as large as when using other audiences for brand-building, spend-based audiences provide much higher click-through and purchase rates,” says Kris. It is also the first step to acquiring new high long-term value customers.
When it comes to increasing the scale of campaigns, using intent-based audiences can be a good strategy. Intent-based audience data can be derived from sources such as website behavior, social media engagement data, and other interest-intensity signals. When used in conjunction with spend-based audiences, intent data can help broaden a campaign’s scope while still providing a beneficial level of targeting. Demographics can likewise be used to either broaden or narrow the scope of a campaign. But spend-based audiences remain the most reliable tool for driving actual campaign revenue and should be the bedrock of any digital advertising program.
The bottom line is that, if revenue generation is the goal, spend-based marketing audiences take the guesswork out of reaching the consumers with the highest likelihood of responding to a given campaign. When digital advertisers use audiences based on high-quality, permissioned, individual-level consumer spending data, they are equipped to improve the performance of their acquisition campaigns across all digital channels and achieve their revenue goals.
₁ “Digital advertising in the United States – statistics & facts.” 2022, Statista.
Tags: custom audiences digital advertising digital audiences on-demand audiences programmatic