What is interactive marketing?

By IBM Watson Advertising

Interactive marketing is an advertising tactic that is based on user preferences, behaviors and actions, to create a personalized interaction with a brand. Since it centers directly on users, it differs from traditional campaigns, which aim to cater to the masses. Interactive marketing can include tactics such as quizzes, surveys, or conversational marketing.

Why is interactive marketing important in advertising?

Interactive marketing allows brands to personalize their interactions with customers and create a more custom experience. Personalization itself is increasingly becoming a priority for consumers, as customers expect better experiences online. According to Salesforce Research’s fifth edition of State of the Connected Customer (opens outside ibm.com), 73% of customers expect companies to anticipate their needs. 

Due to the pandemic, these online interactions have become the prominent face of a brand. Over three years, digital transaction share increased by nearly 40% (opens outside ibm.com). Despite the reopenings after the lockdown, these trends are not expected to dramatically shift to favor in-person interactions. For companies looking to stay competitive, they must learn how to convert the benefits of the in-person experience to their digital platforms.

Types of interactive marketing

There are many types of interactive marketing techniques to explore. Here are some of the most common.

Interactive content

Interactive content is content that is interactive in nature and used to encourage engagement with consumers. Some examples include blogs with embedded videos, quizzes, gated content and other mixed media elements.

Personalized content

Personalized content is content that has been personalized to meet a user’s unique preferences, demographics, geographic data and more, to create meaningful experiences for them, whether it’s in a brand’s messaging or ad copy. 

Conversational marketing

Conversational marketing is a form of advertising that utilizes AI capabilities to facilitate a personalized conversation with users online. A common type of conversational marketing is a chatbot, which can understand one’s intent and provide answers and recommendations for what a given user is looking for.

Benefits of interactive marketing

Everyone benefits from interactive marketing and it’s no wonder why. Here are some of the top advantages it provides for advertisers and marketers. 

Greater personalization

Interactive marketing is all about creating a personalized experience for your audience which has become increasingly important to consumers when choosing a brand to align with. Forty-two percent (opens outside ibm.com) of companies agree that a personalized approach can positively influence the overall business strategy.

Higher ROI

Having consistently positive, personalized experiences with a brand increases the likelihood of leads turning into conversions and repeat buyers. According to McKinsey & Company, companies that use personalization, report 40% (opens outside ibm.com) more revenue from these tactics. Additionally, 80% (opens outside ibm.com) of brands interviewed by Segment noted that consumers spend more when their experience is personalized.

Brand loyalty

Consumers become loyal to brands whose messaging resonates with them and aligns with their values. By creating a personalized experience, your company can better ensure that consumers return.

Timely and reliable

Interactive marketing is timely in its ability to create messages that are personalized and accurate in a way that traditional marketing cannot be. Consumers can quickly get answers to their questions at any time with information they can trust.

Challenges associated with interactive marketing

Like all marketing techniques, interactive marketing doesn’t come without its challenges which include:

Lacking insights about the target audience

Without the right tools to gain insights into one’s target audience, interactive marketing is essentially impossible. Some of these tools can be costly or hard to get your business to buy into. Forty percent of companies (opens outside ibm.com) feel that getting accurate customer data for personalization is still a challenge for them.

Cookieless targeting

Security and privacy are becoming a huge priority for consumers and brands alike, and if you don’t have a cookieless targeting solution to gain insights, people may not feel comfortable interacting with your brand.

Sixty-five percent (opens outside ibm.com) of consumers worry their data is being collected by brands without their permission. If done incorrectly, personalized campaigns can feel invasive and lead to customer dissatisfaction. Cookieless advertising relies on contextual insights, such as location data, weather-triggered ads, or information shared directly via the customer with a conversational marketing tool or opt-in form.

Additionally, legislation around the globe, such as GDPR and the California Consumer Privacy Act, are addressing these consumers’ concerns. With the increasing pressure from consumers and regulations, finding a solution that can deliver an interactive experience while remaining cookieless is becoming more important.

Extending the reach

Because conversational marketing is about a 1:1 interaction, brands may struggle to get their message out to a larger audience which is necessary for organizations that wish to continue growing.

Getting started with interactive marketing

Getting started with interactive marketing is a process that includes the following steps.

1. Identify your target audience

The first step is knowing who your target audience is. You should find out both basic and detailed information such as age, residency, political beliefs, financial standing and more. Your team can start by building out personas and conducting market research. 

2. Learn what their preferences are

Interactive marketing is all about leveraging a user’s unique preferences, behaviors and actions to create a personalized experience for them. This can include things like shopping behavior, their likes and dislikes, and the amount of time spent before making a purchasing decision. Your team may have some of this data and information already.

3. Optimize AI

Utilizing technology can help automate the process of collecting insights about your target audience and using them to create a better future experience for them. Additionally, by leveraging an AI conversational tool, you can communicate with consumers on a massive scale, while delivering tailored recommendations.

4. Find new ways to reach your audience

Marketers can use the insights collected from interactive marketing techniques to discover new ways to reach their target audience. This increases the likelihood that future interactions are positive and lead to a sale. 

5. Measure results and make adjustments

After testing out different strategies, you’ll want to measure results to see what’s working and what’s not. From there, you can work with your team to revise and adjust your interactive marketing strategy moving forward.

Examples of interactive marketing

A leading entertainment streaming brand uses AI-powered ads to create a custom experience

When Hulu came to IBM Watson Advertising, they had the goal of building awareness of the Hulu brand, educating users on Hulu’s services, and differentiating their brand as the preferred streaming service among competitors.

They collaborated with Watson Advertising on a custom, targeted AI-powered ad experience with IBM Watson Advertising Conversations. They leveraged natural language dialog to ask questions about their mood and viewing habits so they could provide unique Hulu programming recommendations based on the dialogue. Watson was also trained to answer frequently asked questions like pricing, programming and technical issues. The campaign led to excellent results which included:

  • 44 million total impressions served
  • 18 thousand active user sessions
  • 3.5 thousand conversations
  • 14 thousand total button clicks with 3,000 clicks to Hulu.com
  • 3.7x more time spent in the unit versus Google Rich Media interaction rate benchmark

Best Western improves visits with conversational marketing software 

Best Western came to IBM Watson Advertising with the goal of reaching and engaging more customers during peak holiday weekends when they were in travel planning mode. They collaborated with Watson Advertising and utilized Conversations to provide personalized travel recommendations and reduce some of the work that comes with planning a trip. Watson was not only trained on Best Western information but used natural language processing to provide a 1:1 dialogue with each user. They were able to offer travel recommendations, tips, tricks and inspiration for upcoming destinations. This campaign led to meaningful results like:

  • 2.2x higher time spent with Conversations versus Google Rich Media interaction time benchmark
  • 42 seconds average time spent within the Conversations unit per session
  • 48.6% incremental lift in visits to Best Western locations versus those who had already planned to visit Best Western hotel properties

Final thoughts

Interactive marketing is here to stay, and we can expect more businesses to utilize techniques like interactive content, personalized content and conversational marketing to stay competitive. Whether it’s engaging more audiences, improving brand loyalty or achieving greater ROI, interactive marketing can help achieve your business goals.

Ready to learn more about interactive marketing? Discover the conversational marketing solution from IBM Watson Advertising.

As always, we just need to ensure we have Hulu's and Best Western's written permission on file to publish these case studies using their names.