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It’s not effectiveness OR efficiency; data collaboration enables both

  • Graham Tricker
  • 4 min read

We all know the secret of advertising effectiveness is getting the right message in front of the right person at the right time. In this sixth article in his series on data collaboration, LiveRamp VP of Sales UK Graham Tricker talks about how the approach can deliver effectiveness and efficiency by making your campaigns work harder and smarter.

Effectiveness is defined as the degree to which something is successful in producing a desired result. Efficiency is the ability to accomplish something with as little waste of time and effort as possible. Clearly, the two are inextricably linked.

In an earlier post (Three key areas where data collaboration can unlock business value) I talked about how brands can use data collaboration to avoid advertising to the wrong people. I used the example of British Gas collaborating with its media partners to use its own first-party data to suppress advertising to existing customers. Doing this added an estimated 10% incremental value to the campaign. That’s increased efficiency.

Flip that on its head and by targeting the right people you’re also increasing the chance of them responding to your messaging. Take Jaguar Land Rover for example. Their problem was working out when potential customers were in-market for a new car. The solution was to work with car buying comparison site Carwow. Crucially, people go to the site to configure and price their next car before they go to a dealer. By setting up a data collaboration with Carwow, JLR was able to find out when customers in their target groups were shopping for a new car, in a privacy-compliant way. The result was a 12x increase in ROI. That’s improving your effectiveness.

Beautiful Results for LookFantastic

Just how close the two approaches are was made clear by the work we did for LookFantastic, Europe’s number one online premium beauty retailer. We helped them run a trial customer acquisition campaign, with data collaboration enabling them to suppress advertising to three different groups of existing customers and compare the results. These groups were people who had made one purchase in the last 12 months; those who had made between two and five; and those who had made more than five. Suppressing paid search ads to existing customers resulted in significant savings on media. So far, so efficient.

But the other side of the story was the difference in response rates between the three groups. Paid search advertising made little difference to the brand loyalists in the “more than five purchases” group. But advertising to the “once” and “two-to-five times” groups combined showed a 1.74% lift in incremental revenue. And while targeting those two groups combined delivered an ROI of 4.4, targeting the “two-to-five” group alone increased that ROI to 7.2. Clear proof of increased effectiveness too.

Why Retail Media Works

It’s a similar story with retail media networks. CPG brands tend to be data-poor. They don’t have a direct transactional relationship with the people who buy their products. Working in collaboration with a data-rich retailer can improve their targeting and the relevance of their advertising. That means better results and less wastage, a double-whammy of bottom-line improvement.

This was certainly the case with food and drink giant Danone. Without the data it needed to segment its audience, it couldn’t deliver relevant advertising. So it decided to run a test. It wanted to understand the impact of digital advertising on audience segments and their path to purchase at one large retailer. It also aimed to optimise omnichannel activations based on transactional data provided by that retailer. Danone worked with data marketing experts Numberly to design the test, including campaign strategy and marketing measurement. Numberly also helped identify missing data elements that could be sourced from retailers to complete the analytic work. This data collaboration was enabled by our Safe Haven platform.

At the end of the test campaign, the overall conversion rate had increased by 7.9%. Traffic and engagement on Danone’s product pages on the retailer’s website also increased, while e-commerce conversions increased by 22.4% and total revenue grew 24.7%. What’s more, Numberly discovered two new segments within Danone’s audience, which went on to be the highest performers in the test. That allowed Danone to optimise its media strategy, reducing wastage at the same time as improving results.

Data Collaboration; not just for campaign planning

It’s also worth noting that data collaboration between brands and retailers isn’t confined to the planning stage of campaigns. It’s also crucial for measurement too. Because more shoppers are completing their entire journey from seeing an ad to making a purchase on the same retailer site, brands have access to direct data showing ad performance. This gives them a far better understanding of what’s going on with their advertising. It also allows them to optimise campaigns in real time, delivering further improvements in effectiveness and efficiency.

Of course, the ultimate aim of better effectiveness and efficiency is to deliver revenue growth. So in the next post in this series, we’ll step back and look at that bigger picture.