From Big Data Promise to Shopper Marketing Success: Part 1

In the first installment of a two-part article, we examine how data has the potential to bring the concept of “customer centricity” full circle for CPG marketers – from offline to online to in-store.Imagine a frozen foods company with a new vegetable product aimed at moms looking to provide easy, healthy alternatives for their families. What if the brand could find out:What other frozen veggie options moms look at while in-store, and which ones they add to their baskets?Why moms purchase that company’s products and what they like or dislike by capturing real-time social media chatter?How its digital advertising campaigns affect the sales of its products in-store?How to use this information to tweak its shopper marketing efforts at individual stores, from assortment to display?These are the potentially powerful promises of “big data,” the large data sets gathered through everything from store transactions, loyalty cards and social media to geo-tracking mobile devices and Internet search indexes. While some consider the focus on “big data as savior” overblown hype, consumer packaged goods companies have been listening closely to the drumbeat. According to the recent IBM/Kantar Retail Global CPG Study of more than 350 top CPG executives, 74% of leading CPG companies now use big data analytics to improve sales decision-making, compared to just 37% of lower-performing CPGs.Brands, of course, are famous for having decades of advanced shopper research experience in the form of surveys and household panels, and many have developed their own large online databases from recipe sites and the like. Historically, though, CPG marketers have struggled to gain direct access to a variety of customer data that could help them dig deeper into shopper habits, which translates into improved targeting and sales. The tantalizing triple-whammy of big data – getting closer to the shopper without a retail intermediary; identifying shopper wants and needs with unprecedented precision; and “owning” the shopper journey from advertisement to checkout – is an exciting prospect.“Ideally, big data helps give CPGs a footprint or time-stamp across the entire customer decision journey as opposed to the final purchase – how the need arose, what made people think they needed to try it, how they searched for information,” says Ravi Dhar, professor of management and marketing and director of the Center for Customer Insights at Yale University. “Most CPG research panels are just a slice of time, but with big data you can get a slice of the journey itself, which is very useful for marketers to understand and helps them to integrate the entire customer decision journey, both offline and online.”The gold-mine possibilities of big data have led many CPGs to increase their investment in data gathering and analytics technologies, but harnessing its vast potential is another matter. After all, we’re talking about mind-bogglingly large volumes of data from a wide variety of sources, in a shifting sea of different formats. However, the technology to analyze big data has improved, third-party data providers have risen in the space, and top advertising publishing platforms including Google, Yahoo, Facebook and Twitter are now offering a powerful combination of offline purchase data and online audience segmentation. This offline/online layering is now helping CPGs begin to bring their customer-centric journey full circle by using shopper transaction data to improve and fuel better-targeted digital advertising campaigns, which are then analyzed to determine their impact on in-store activity.“Every CPG is trying to figure this out,” says Rob Holland, general manager of consumer products at Datalogix, which helps CPG and retail marketers increase their advertising effectiveness by targeting and measuring campaigns based on offline purchase data. The company offers access to data on nearly every U.S. household and over $1 trillion in consumer spending. It works with CPGs to reach audiences across more than 50 media partners, including leading publishers and Facebook.“We’re seeing a combination of increased consumer engagement online with technology that’s emerging to enable brands to find and reach these people,” Holland says. “They’re using data to help fuel the technology so it can drive even richer levels of engagement and even more relevant messaging and marketing.”The Emerging TransformationOne brand getting serious about building big data analytics into its everyday decisions and long-term plans is Frito-Lay. According to Shyam Venugopal, director, portfolio strategy and analytics, not only is big data helping the company understand how consumers perceive their salty snacks, but a four-person analytics team has been on a three-year journey to entirely transform the company’s decision-making toward using quantitative, data-based principles.The fact is, today’s consumer is radically different from the consumer of even a decade. Consumers compare prices using mobile phones while in the store aisle, check peer reviews on their favorite websites, and get recommendations on social networks. Brand marketers must be laser-focused on their consumers’ wants and needs – across channels – to build long-term loyalty.That’s where big data comes in. As it gets harnessed properly and insights get smarter, CPGs can get an increasingly sophisticated understanding of each consumer both online and off, says AJ Resnick, client strategy and solutions at digital advertising firm Rocket Fuel, which works with CPGs such as Kraft and Pinnacle Foods’ Birds Eye.“Having access to in-store sales data is allowing CPGs to better invest their digital dollars,” Resnick says. “Smart advertisers will build the infrastructure needed to glean the most granular insights to create stronger brand experiences that increase revenue both for them and for the retailer. We’re trying to answer questions for our clients such as, ‘How can we get consumers to spend $20 at the retailer instead of $5?’”One CPG executive, who asked to remain anonymous, said that her company is using data analytics to rethink marketing mix altogether. A rigorous analytical framework is now used to determine what brands to invest in, as well as advertising mix and channel priorities. As a result, she says, marketing mix assessments are no longer used merely as historical reports, but are considered forward-looking decision-making tools.The Circle of Customer CentricityFor many CPGs, an increased investment in digital advertising campaigns, particularly on large publisher sites such as Google and Yahoo, and widely popular social networks such as Facebook and Twitter, has become a key part of reaching consumers where they are and encouraging them to spend more in the store, where the vast majority of sales transactions still take place. But brands, no longer experimenting tentatively with digital campaigns, want evidence of ROI, particularly tying back to in-store sales. Big data, in the form of retail transaction data – from loyalty cards, retail credit cards and other POS data – has helped publishers provide brands with bottom-line proof.“CPGs need to be more efficient and reach the right consumers online, and offline purchase data is critical in enabling them to do that,” says Fred Leach, head of measurement research, development and partnerships at Facebook, which announced partnerships in February with several third-party data providers, including Datalogix, to match user profiles with store purchase data. “The most powerful aspect of these partnerships is being able to tie what happens online to what happens in the store. It’s absolutely critical for today’s brands, not just in terms of a single campaign but over multiple campaigns, to understand how to do better the next time around.”To dig deeply into how its campaigns are succeeding online and translating into in-store sales, Frito-Lay uses third-party partners such as Datalogix, which provides the company with digital audiences using offline purchase data, from retail loyalty card programs and other transactional data sets, to measure back-to-store sales lift and return on investment.In addition, Venugopal says, Frito-Lay is leveraging big data, particularly social networking data, to understand how consumers perceive snacks. “It’s about insights gathering, not just evaluating sales impact,” he says.In August, Twitter joined the big data game, offering select brand advertisers access to data that will offer insights into whether targeted advertising campaigns led to in-store success. Its partner, Datalogix, did a study of 35 Twitter campaigns and found that Promoted Tweets lifted product sales offline by as much as 12% thanks to consumers who engaged with the ad through retweets and clicks.For data giant Epsilon, the new accessibility of transaction-based big data is a seismic shift for CPGs, which historically have been limited in terms of their ability to become truly customer-centric, especially across offline and online channels.“Data accessibility helps CPGs bridge the gap by turning retail transaction data into customer-centric insights,” says Eric Stein, executive vice president of online solutions, Epsilon. “For example, my first job out of college was as a brand manager at Dove; I would wait for monthly sales data and then break it down by geographies, but we didn’t have the ability to be truly customer-centric that you would have today.”One CPG executive the magazine talked to said that new data sources such as Datalogix have helped her company answer specific questions, such as whether a certain advertisement drove sales due to higher frequency or due to increased penetration, at a more granular level than was ever possible before.For agencies using third-party data providers in their work with CPGs, media targeting based on someone’s purchase habits is the best opportunity to take “light” loyalists and turn them into “medium” or “heavy” loyalists, or introduce loyalists to another product. “We try to figure out with our partners where the data shows the biggest opportunity to generate the most dollars from a targeting standpoint and turn that into audience segments,” says Josh Bock, vice president and group partner, Decision Sciences at agency Universal McCann.Next month: The Challenges AheadAbout the SponsorDatalogix is the big data company connecting digital advertising to offline sales. We build digital audiences using verified offline purchase and activity data on more than 110 million households across CPG, retail, automotive, finance & demographic categories. Our 100% 1:1 offline-to-online matching guarantees advertisers the most accurate digital audiences. We help leading brands reach audiences of buyers across display, video, mobile and social and measure the offline sales lift resulting from digital marketing campaigns.

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