Over a year ago, we began a partnership with Hearst Magazines to deliver personalized print ads in Hearst magazine titles. Dubbed ‘Project Match’ at Hearst (for the need to match up the ad with correctly addressed magazine package for individual subscribers), the program has delivered 9 interesting ad campaigns for some iconic brands. But there is one major observation that consistently strikes us.

Advertisers and their agencies are not currently configured to do personalized advertising.

From compensation to expertise, the system is misaligned and the losers from that misalignment are… everyone! In survey after survey, consumers consistently indicate that subtle but accurate content customization in advertising is welcomed. And publishers and agencies could easily garner a premium for the work involved in production and delivery of these targeted ads. But an industry trained in pricing, conceptualizing and delivering advertising that garners ‘eyeballs’ and is priced on a CPM basis is consistently conspiring to crush the potential of the technique.

Interestingly, on the digital front, ad targeting and customization (albeit not on a personal level from a creative perspective) is integral to the technique, and agencies have quickly adapted to the varying demands of the medium. But in print, the classical brand build mentality or broad-brush direct response strategy is rooted deeply.

What makes personalized ads so difficult to execute? Here are four critical issues:

1. CPM Mentality:  Personalized ads are produced using digital print which makes them significantly more expensive on a CPM basis. Advertisers recoil from the pricing when they are buying media in bulk. Oddly, this is a perceptional issue that should be easy to change. (Not!)
2. Ad/Direct Mail Wars:  Face it…in both clients and agencies, the direct response and advertising teams are usually separated. Until a program becomes an ‘integrated, 360’ execution, mixing the techniques does not happen. And, in principle, while personalized ads are ‘ads’…they are priced and they perform more like direct mail. The creative strategies and disciplines needed for success are strategies and disciplines using in direct mail. This wall need to come down if advertisers are to every yield the full potential of this technique.
3. Compensation:  An industry veteran, Thad Kubis, noted that the work effort required on these ads is much higher. For most agencies, they are better rewarded by placing a run-of-book ad in the magazine. In fact, the same is true for the publisher! While no industry insider would want to admit this, the advertising community is trained to be ‘coin-operated’ …. that is, compensation often influences final decisions in an outsized way.
4. The Data Gap:  For all the talk about collecting data these days, most publishers and advertisers are far from ready to apply data in intelligent ways to make this technique really work well. This will change over time, but in many cases, we simply lack depth in relevant areas to be able to really vary ads in relevant, actionable ways for readers.

Certainly there are issues of expertise and comfort with variable content execution that are issues…but I know a lot of brilliant ad professionals in NY, none of whom I believe would find personalized ads to be ‘rocket science’. These are ultra-savvy creatives who would revel in the dazzling opportunities created by personalized ads. But mentality, compensation and better data all need to evolve before the true potential of this technique can shine through.