When all marketers have universal access to an entire world of third party online segmentation data, advertisers are increasingly turning offline for an edge. Leveraging established and deep CRM data, marketers are matching their customer databases to online cookies for targeting and retargeting, and going beyond basic demographic data by bringing multiple data sets into the digital marketing mix. I recently interviewed Live Ramp’s Auren Hoffman to learn more about how traditional databases are getting matched to online cookies, and made available for targeting.
Offline data versus online data. You hear first-party data talked about like it’s the gold standard. Just how much more valuable is a company’s first party data?
Auren Hoffman (AH): First, some clarification: Offline does not equal first-party data; nor is online equivalent to third party data.
The gold standard is not first-party data. It’s the rich knowledge (and capacity for segmentation) that lies in a company’s CRM database, typically tied to a name/address or an email address (including purchase history, direct mail, email campaigns, and loyalty). That knowledge, which is largely (but not exclusively) first-party data, exists almost exclusively offline.
Oftentimes, this specific customer knowledge – first-party data belonging to a brand or business – is augmented by complementary third-party data (for example, zip code-based psychographic typing). Also added into the mix is certain online data (largely transactional, where the customer is known) that has been taken offline (into the CRM database).
This deep customer knowledge has – before now – really only been usable offline (to manage direct marketing, for example). Customer segmentation derived from CRM data is commonly used to target certain audiences with specific messages. That same knowledge has not been – could not be – used to achieve better targeting online through display advertising… until recently.
Companies such as LiveRamp take the knowledge about individual customers from offline CRM databases to form useful and rich customer segmentation that can be “onboarded” – taken online and used for highly-focused display advertising, in a safe and privacy centric way. For example, catalog recipients (from a CRM-driven direct marketing campaign) whom it is known both purchase online and focus on a particular product line in their purchases can be transformed into an online audience with a very focused marketing message. This is what LiveRamp does: translate rich offline data (first- or third-party, or both) into anonymized online segments that can be used to create highly targeted and therefore more effective display advertising. LiveRamp is the only company focused solely on providing data onboarding that can be used to achieve “CRM Retargeting” (using CRM data to enable highly-targeted display advertising).
It should be emphasized that onboarded data is anonymized – that is, unlike CRM data which is frequently used in its individualized form (specific customers tied to an email or postal), onboarded data is aggregated based on customer segments (e.g. a possible segment could be customers who have not purchased from the brand in more than six months) who receive a specific message (e.g. special incentive to return to the brand). So the customer’s privacy is protected, while the customer is still able to receive an offer or message likely to be of specific appeal. With CRM retargeting, brands can target last year’s shoppers with relevant ads about the upcoming holiday season to remind them about your brand’s offer, regardless of if, or when they’ve been to your site.
What kind of offline data should marketers consider bringing online? What offline data do you consider to be the most valuable in terms of audience targeting?
AH: Marketers should consider any data that allows them to create more targeted – and therefore more valuable – segmentation for use in online display advertising; which will vary depending on a brand’s business and messaging strategy. The most valuable such data is that which, when linked with focused messaging, is most likely to achieve resonance with the audience segment. Onboarded data, as noted above, is anonymized; consequently the objective is not to track down and message individual consumers (which would be intrusive), but rather to develop creative messaging to groups of (anonymized) customers (e.g. lapsed customers, or those with particular product or service requirements – for instance, customers with car leases about to expire might well be interested in incentives for a new lease).
Though the most valuable data is likely to be based on transactional history or product/service preferences, it is by no means limited to this. The most valuable data is that determined by the brand to create segmentation – and the accompanying messaging – needed to elicit a positive customer response and in turn ROI.
How should marketers manage their data? Now that data is so cheap to collect, transfer, load, and store the tendency is to make almost every piece of data available for analysis. Where should marketers draw the line? What about recency? Does the cost of keeping certain datasets (transaction events, for example) recent outweigh their potential value?
AH: We’re agnostic on this. (That is, we’re not in the business of managing the data, just bridging the offline/online divide with onboarding expertise.) Each marketer must judge for him or herself the value of data in relation to its potential use for targeted segmentation.
How does it work? Please describe, in layman’s terms where possible, the various methodologies for matching offline data with an online consumer. (cookie matching, key value pair match, etc)
- A brand (or a brand’s agency) provides LiveRamp with an encoded CRM safely through our secure upload portal.
- LiveRamp matches your offline data keyed off an email address to an anonymous online audience via cookies with extensive coverage and high accuracy.
- LiveRamp places the online audience on a brand’s existing DSP or DMP (or we can suggest one of our partner platform’s) & the display campaign runs as normal with a larger, more valuable, and more targeted audience.
- Your customers see a relevant and timely message from your brand
- LiveRamp does not buy or sell data. We do not collect any data from a site, our cookies do not contain PII, and we do not pass any site audience information to any third party.
This interview, among many others, appears in EConsultancy’s recently published Best Practices in Data Management by Chris O’Hara. Chris is an ad technology executive, the author of Best Practices in Digital Display Media, a frequent contributor to a number of trade publications, and a blogger.
This post also appeared on the iMediaConnection blog on 1/3/12.