The Value and Power of Data-Driven Marketing
By Bill Schild, Specific Media
Bridging the in-store/online gap
While well over 90% of purchases are still made in stores, consumers are spending an increasing number of hours each week shopping for products and comparing goods online. Despite this growing trend, online and offline retail marketing strategies are usually executed in silos. In the digital arena, marketers focus the majority of their ad spend on driving online transactions, which allows for more advanced targeting.
However, this strategy is rooted in driving online behavior and conversion, feeding a culture of direct response that neglects brands’ upper funnel needs. Not to mention, it disregards the notion of device fragmentation, which is predicted to grow to 2.6 devices per consumer by 2017. Combined, these factors make identifying proper attribution a herculean effort.
Digital ad targeting is changing
In order to take advantage of the changing marketplace, companies have started to partner with data providers to better understand consumer behaviors. The information captured greatly informs advertising campaigns, allowing brands to effectively identify, target and message both current and potential customers across multiple devices.
While the concept of consumer segmentation is not new, marketers have never been able to fully take advantage of what I like to refer to as closed-loop segmentation. In today’s ever changing digital ecosystem, recent technology advances make it possible for a select group of companies to move toward a new practice of targeting consumers online based on in-store purchases and tie those back to actual attribution of the advertisement.
It works like this: A person uses his or her credit card to charge a purchase at a national consumer electronics store. Once their card is swiped, data collection companies anonymize the information based on criteria such as age range, geo-location and average monthly expenditures. At that point, the data flows into a large repository that aggregates an estimated four billion monthly transactions. It is finally matched against anonymized online consumer data to create more relevant marketing campaigns.
Once a purchase has taken place, the anonymized data from the retailer is then matched with anonymized data from the company who provided the advertising to close the loop and attribute the sale to the actual marketing campaign.
The advantage of data-driven decision making
There are key benefits in leveraging in-store data to inform online strategy. For one, it allows brands to identify their target audience using retailer-specific purchase data. But more importantly, it enables these brands to effectively manage their marketing investments by bridging the elusive offline-online advertising gap.
Creating the link between in-store purchase data and online activity is complicated. However, for the first time in history, our industry has the technology to apply this method in real time. By using in-store data, brands can now form more meaningful connections with online consumers via relevant messages across multiple devices. And, with digital media expected to be more than a third of all U.S. ad spend by 2018, it stands to reason that this method has most retailers excited.
That being said, this technology provides us not only the ability to reach a brands actual customers, we now have the means to identify the offline sales impact of a brands digital investment with observed in-store sales data.
By focusing on this new type of closed-loop segmentation, brands now have the power to influence both in-store and online shoppers, ensuring what 63% of all CMO’s care most about, return on investment.
Bill Schild, senior VP, global marketing Specific Media, a global media company connecting brands with consumers across one of the largest audiences worldwide. Our exclusive data partnerships, multi-screen and multi-format targeting capabilities, and innovative advertising solutions enable brands to influence purchasing decisions as they are being made.