Consumer behavior and demand have changed in the post-pandemic world. People look at products differently, leading businesses to rethink how they market them. A few years ago, what worked vanilla in digital advertising might be irrelevant now.

Supporting data highlights stark differences in consumer behavior. According to a McKinsey survey, 75% of US customers tried new shopping behavior in response to store closings, supply chain burdens, changing priorities, and mounting economic pressure that came with inflation.

Personalization has also become a deciding factor in a consumer purchase. The survey revealed that 71% of consumers wanted personalization in their products, while 76% felt frustrated by the lack of personalization.

At a time when digital products purchase has become more customized, the role of digital advertisements and brand recommendations has grown ever more essential. Digital advertising, especially, has to look beyond the traditional bidding-based ad recommendations and devise strategies that rely deeper on user behavior to serve ads that convert while being easy on the advertising budget.

More than just product offerings

Customization and apt recommendation are driving factors behind user purchase intentions. New York-based advertising company Taboola went public in 2021, showing how customized products and ads were the future of advertising. The model has worked well for advertising networks.

Product and brand recommendations are steadily becoming an integral part of digital advertising, with brands such as Google, Facebook, and Amazon spending more time and resources behind further improving their algorithms to enhance customer experience while matching the advertiser's needs.

But product recommendations don't always go right. Products cannot be a smash hit by merely marketing themselves. From a user's point of view, getting a purchase right is essential, which is why the product's value, in addition to consumer relevance, is equally important. For publishers, getting AI-based recommendations saves time and converts well, which could be a wider part of their strategy to promote an industry from the affiliate space.

The market is emerging and ready to accommodate new advertising and brand recommendation technology. Recent research on digital advertising shows that mobile in-app advertising spending will scale to $425 billion in 2026 from $201 billion in 2022. With continuous growth in the digital advertisement space, brand recommendation companies have just the window to tap into the emerging market, riding on the brands' need to secure consumer trust while acquiring leads that convert.

But the journey is not going to be all too easy, as privacy changes in brands such as Apple and Google are narrowing the scope for data collection.

"With recent data collection policy changes by technology giants creating further challenges for mobile attribution, enterprises must adopt a code of best practice to maximize return on advertising spend and support probabilistic attribution models," says the study's author, researcher Scarlett Woodford.

Nonetheless, opportunities exist. For example, Apple's SKAd Network provides a significant opportunity for advertisers to use collected data. Even Google's recent changes to its privacy measures limiting data sharing on its Android software would not be disruptive to advertisers.

Enhancing the customer's purchase journey

Purchasing a product is a digital journey — now influenced and exaggerated by more touchpoints and other deciding factors. Successful digital journeys have one thing in common: the user chooses a brand and decides to go ahead with it and purchase their product.

The digital journey theory is more applicable in language learning, meal delivery, gaming, weight loss, and dating. Brands operating in these industries face high advertising competition — the product offerings are similar, and potential purchasers rely heavily on how well the product is customized to fit their expectations. For advertisers, influencing a user's choice can be tricky. A brand will see lower conversion rates if customers are not pushed towards it for the lack of purchase-driving reasons.

Advertisers use various channels to ensure that this conversion happens. One of the most crucial aspects of the conversion channel is content audience selection, where ads are served to an audience using similar applications or visiting similar websites. Having the same viewpoint influences decision-making as the audience is persuaded towards engaging with the ad.

The importance of location and interest targeting is equally essential in brand or product recommendations. This method works best for brick and mortar businesses that'd want customers to visit or order from their establishments. On the other hand, interest targeting serves ads to users sharing a similar interest. Further down the purchase journey; lies retargeting — where the ad budget is spent on users who have already or recently visited a product's page or website.

Targeting purchase-driven audience

Taboola's success may have used a similar approach — identifying interests and geography to serve ads with higher conversion chances. However, Taboola's reach is still limited. For users driven towards making a purchase, bidding brands must find a channel where they are recommended a product specific to their need and purchase intention, and this is where Berlin-based brand recommendation company Compado is making a difference.

Recommendation platform Compado has grown to become a brand that offers its partners the opportunity to advertise to a highly purchase-motivated audience. The approach to serving recommendations is simple: Users visit Compado's comparison and review websites to look for category-specific brands. Compado's AI then analyzes the user data to identify brands they might be interested in. Ultimately, it takes ranking and data signals to provide results that emerge as ideal brand decisions for customers.

Compado's approach towards improving brand visibility through ranking tables showcases how they stand out against each other - an opportunity for eager brands to enhance their visibility. Their key ranking signal "Customer Value" puts more weight on brands with loyal followership, as brands have more chances of improving their ranking visibility if they offer an industry-leading product. There's barely room for scammers or low-value brands - as they are not able to provide sufficient customer value.

"Brands that generate industry-leading value — that have the best product, loyal users, great mechanisms to retain an engaged user base — can pay high registration prices; because they can afford it, and because they know they will make it back," explains Compado's Chief Strategy Officer Joschka Weltgen.

Compado emphasizes customer value. If a brand gives its users a "great home," they stay with it for a long time and generate much value.

"Think of a Netflix subscription. For example, Netflix gives its users a great home; therefore, users stay with Netflix for long. Netflix, in turn, generates lifetime value with their users in the form of subscription fees," says Weltgen. "Only brands that have loyal users or give users a great product can pay a high price for user acquisition."

Weltgen explains the importance of receiving high-quality leads. Not all traffic is reliable. Bad bots are exploding in number. A 2021 report by IT security company Barracuda found that bad bots made up nearly 40% of all traffic. The quality of leads is also relevant to user experience and how their data is dealt with. "If a brand is willing to pay only $1 per registration, you can be certain that this brand will sell your email address to spam lists or whatnot," Weltgen adds.

The alternative brand recommendation model is seeing significant success. Compado scores several hundreds of thousands of successful recommendations monthly and boasts a portfolio of over 300 business partners in more than 70 countries in over ten industries.

With digital advertising gaining more ground every year, brands such as Compado's business — in the presence of advertising giants such as Google and Facebook — are crafted towards success. The model has already been successful in many subscription heavy industries that rely on consumer decision aid, such as digital language learning courses or meal kits. What Compado achieves in this space and how it lays out its partner-acquisition journey is to mark a milestone in targeting, value-oriented advertising.