Good data is in the eye of a skeptical beholder, but it can change the way retailers do business.
That is the key take-away from the Advertising Week panel on the future of good data, held here in New York City this week.
The foundation for this outlook is first-party data — the information retailers have about their own customers. In Target’s case, that enabled a migration from an idea of who the customer is; to a customer profile; to a data marketplace accessible to other companies, explained Kristi Argyilan, SVP for marketing. The Target Media Network, as it is called, has been online for the past year.
L’Oréal’s migration began with eCommerce. “It was a natural evolution to…mine data to make it part of our decision making,” said Brigitte King, chief consumer officer. “Massing and blasting” an ad message has given way to “target tracking,” she said.
Indeed, there is value in first-party data. “In the orbs of data, first-party is at the epicenter,” Argyilan said. That does not preclude the use of third-party data from other sources, but here Argyilan argued for precision.
“Not all data is created equal,” added Andy Fisher, chief analysis officer at Merkle, the performance marketing consultancy. You have to know what you will do with the data. Here Merkle makes it a business to help clients take their own “first-party data” and “build it correctly.” he explained.
“Be careful and understand it,” said L’Oréal’s King. This is not a matter of gathering a lot of data and figuring out what to do with it later, but finding deliberate use cases and finding a good fit for the asset, she explained. Be cognizant of how much time and money it takes to crunch the data to gain an insight. “Show results quickly,” she said.
“Good data” can change the terms of a business conversation, Argyilan said. You can talk about “how much money you can make for the company, not how much money is this going to cost.”
Good data can also surprise.
For example, Target saw a marketing challenge with Generation Z consumers. “How do you develop a brand when they to everything online?” Argyilan asked. That pretty much undoes the traditional brand building model.
Fisher recounted work done for a pharmaceutical company, which pursued two marketing tracks aimed at patient and doctors separately. Yet consumer usually consulted relatives who were somewhere in health care to get their information, so that meant blending the two approaches to reach end-users with some technical information that would usually go to physicians, he recalled.
For L’Oréal’s King, the insight was how consumers expressed their disappointment whenever a their favorite product got dropped. Consumers would typically drop the brand, despite suggestions for substitute cosmetics, she explained.
While AI is on the horizon, panelists viewed the technology with acceptance tempered with an understand of its limits. AI is not going to pick up the conversations Target associates will have with customers, which can also prove insightful. “You have to put the human back in the machine,” Argyilan said. “AI looks at the past,” Fisher added. If previous responses are biassed, then this is the data AI will run with., so keep a human in the loop, he explained.
In the end, greater use of data promises to change the metrics used to reach decisions. ROI could turn into “return on customer,” L’Oréal’s King noted. Customer-based KPIs will enable customer-centric decisions. “That’s empowering that you can do that,” King said. “This will create different conversation on how to measure success.”