For Retailers, People Are Better than Proxies

By Jeff Collins



With the rise of big data, social media, and mobile communications, retailers should now be enjoying unprecedented opportunities to understand and reach their consumers like never before. The capabilities now available enable retailers to deliver personalized offers and messages based on the totality of the historical interactions they have had with their consumers. Therefore, retailers should now be able to easily answer questions such as: What stage of the buying cycle is my consumer in? Does my paid online activity drive in-store purchases? What combination of device exposure drives the highest return on my investment?



After 20 years of representing some of the world’s largest TV brands, a vertical where the practice of “spray and pray” targeting was commonplace, I was lured to digital by the promise of “addressability.” I was done questioning why TV advertisers would spend millions of dollars on focus groups, market research, and man-hours refining the perfect target audience, only to have their media team dilute all that hard work by settling on a broad demographic group. Digital media, it seemed, held the solution to the age-old struggle of reaching the right consumer at the right time with the right message.



It was not long, however, before I learned that there are massive caveats to digital addressability.



To elaborate, today’s digital advertising isn’t really addressing consumers at all – at least not directly. Rather, it utilizes temporary proxies to address the devices used by consumers. The problem is that these proxies are horribly outdated. We continue to depend on the decade-old cookie to identify devices, and ignore the fact that about 70% of cookies are deleted every month and remain irrelevant on two-thirds of all current IP-connected devices (smartphones, tablets, connected TVs, etc.). The result of this practice: advertisers’ consumer visibility is greatly diminished when a cookie resets or when a consumer moves across devices. Prompting a number of issues, chiefly inefficiency and waste, this practice is has led to as much as a 200% overstatement of reach and a 50% understatement of frequency.



The problems of digital addressability are amplified for retailers as they attempt to utilize the valuable in-store sales data for targeting and attribution. The absence of verifiable online consumers has forced retailers to convert their precise offline purchaser data into inaccurate and temporary cookies across a limited number of devices.



“People-based” addressability, however, offers a solution that will quickly turn these caveats into footnotes in the digital advertising history books. Facebook, Google and Myspace, the three largest registration-based websites, with billions of registered users, hold the key to true addressability. These players enable brands to move away from targeting anonymous devices to targeting real registered retail consumers whose ages, devices, incomes, locations, behaviors and purchase histories can all be linked together to create a single view of each consumer.



So what does people-based addressability really mean for retail brands? Ultimately, it spells the end of targeting anonymous proxies and the beginning of targeting actual purchasers, enabling retail advertisers to truly reach the right person at the right time with the right message – in real time.



Let’s break that down:



• Right Person: Onboarding CRM lists, website visitors and email non-openers, and matching against scaled registration-based data, both enriches retailers’ data and allows them to segment and target their valuable consumers across the open web on all devices. This is all accomplished at match rates previously unimaginable through traditional methods.



• Right Time: Targeting real people and not temporary proxies like cookies allows retailers to control the cadence and frequency of their messages to each consumer across all of their connected devices; finally solving the problems of reach and frequency.



• Right Message: With this now singular online and in-store view of the consumer, marketers are able to deliver a contextually relevant message to their consumers based on the entirety of a consumer’s historical online and in-store purchase history, and inclusive of all paid, owned and earned media. In the end, an effective digital media plan must be able to target real people rather than proxies. People-based addressability offers the solution, and moves us away from a device- centric marketing strategy and into a model that is consumer-centric. Retail brands that pivot quickly to leverage these capabilities will gain an immense advantage in the marketplace, and stand to bolster the loyalty, respect and attention of their existing and prospective customers.

Jeff Collins is chief revenue officer of Viant, a technology company providing marketers the entire digital advertising ecosystem in the cloud. He can be contacted at [email protected].