Last year internet advertising spend in the UK grew to £6.3 billion, and the latest UK Expenditure Report forecasts that this will grow by a further 14.0% in 2014, and rise even further in 2015. But while this is positive news for the industry, is all this budget being spent effectively, asks Harry Parkes, product director for WHY Analytics from VisualDNA. This article is copyright 2014 The Best Customer Guide.

Brands can often focus on how they can increase the overall number of consumers reached by an advertising campaign rather than how to target the right type of consumer. And with online conversion rates remaining as low as 2-3%, compared to in store rates of 20%+, I would argue that online advertising strategies need to be revised if brands are to achieve the one to one engagement and return on investment (ROI) they will be hoping for from this additional budget.

So where should they be focusing their attention? It's widely recognised, even if poorly addressed, that consumers want to be understood. They want to be engaged and feel as though the brand values them on an individual basis, in the same way as they value the individual offline experience. Online advertising should reflect this; it should be about ensuring you target the right customer with the right product, at the right time, based on what that individual's motivations and needs might be. It's not about generalising your audience and basing your campaigns on the online activity of your average customer.

To be able to do this, brands must start looking beyond solely using demographic and transactional information to identify which consumers to target and start to also understand who is actually buying the products and - crucially - why.

The fact is that data captured from a cookie can provide a useful insight into a consumer's online activity; and using this behavioural data as a base for online advertising has its value. However, it doesn't go far enough. This type of targeting, referred to as re-targeting, is based on a level of basic, transactional data and can only go as far as the customer is willing to let it. It also highlights the disconnection between the online and offline customer engagement, where online has become less about "how can I improve the relationship with my customer", and all about "how can I sell more to them".

To understand why a customer behaves the way (s)he does online and more about who the customer is, organisations should look at their personality traits and the motivation behind their purchases, which is vital to align the brand with those customers who most share its values, creating loyalty and engagement. It also allows them to pre-target customers - through all stages of the online experience - with timely and relevant content that has a higher chance of achieving a click through; While pre-targeting is still very much in its infancy, the ability to recognise the psychographics behind a customer's behaviour will help brands to make a vital emotional connection with their online customers. Once they are able to fully embed this motivational insight within their existing digital marketing portfolio, they will also be in a stronger position to make more intelligent and informed assumptions.

The key is embedding a psychometric data layer within the existing digital marketing activity. This is based on the Big-Five personality traits, or OCEAN (Openness, Conscientiousness, Extroversion, Agreeableness and Neuroticism), framework for psychometric evaluation. This rich data set can be tightly integrated with a raft of tools already used by the majority of digital businesses, from Google Adwords and A/B and multivariate testing solutions, to analytics platforms, email service providers and display side platforms. These integrations make it a simple process to plan and deliver campaigns to specific customer audiences based on their emotive, motivational and behavioural data.

Fundamentally, the earlier a brand can interact with a customer, the better and if they can know who they are and why they act the way they do, they can build an engaging and mutually beneficial relationship, as well as realise the vision of a truly engaged digital customer base. And by adding this additional data layer to their existing transactional and behavioural data, brands can prioritise and focus their marketing activity and spend on those activities that are going to deliver maximum value to the brand. Surely the crux for any advertising campaign?

So as brands start gearing up for Christmas, the most competitive time for them, it will be those that start to segment their audience in the next few weeks and base their campaign on who their customers are, who are most likely to win big this Christmas. Furthermore, they are also the ones who are going to learn the most and have a better insight into how their customers are going to behave again next year.