Big data is a big deal, both in and outside the advertising world. Conventional wisdom holds that there’s unlimited value in data, and marketers are sitting on top of a treasure trove of insights that they didn’t even know about. In the online ad space, marketers are being pushed to bring their offline data online so they can improve their targeting and tap into those insights. This is the data marketers use for making real-time bidding decisions, helping them find those offline customers in online auctions.
Most marketers understand that there’s a benefit in onboarding their customer base and data, but they may not know how to go about it, and what they are supposed to do with that data. What can they do to make it actionable? There are a few things that marketers should know about onboarding, and what to expect once they have their offline data at their fingertips.
Offline data’s value is derived from detailed information about actual customers. This may come in the form of transactional sales information, loyalty programs, and even direct mail data. Much of that is attached to personally identifiable information (PII), so first and foremost, it needs to be anonymized before it can be used online.
Then bear in mind that the kind of data onboarded matters. Just like with online sources, not all offline data is created equally, even if it’s first-party data. There are differences in reach, accuracy and overall efficacy. This doesn’t mean that onboarding isn’t a worthwhile process – all it means is that the ability to market using this methodology may result in a lower yield.
Consider direct mail. Offline campaigns hit nearly 95% of their target because the ad goes straight to the consumer’s mailbox. Put that information online, and it’s not going to hit the same numbers. Onboarding will never result in the same yield as direct mail, largely because of the difference in formats and targeting technology.
We return to the need for anonymity – advertisers may know where a consumer lives and what kind of car they drive, but they can’t (and really shouldn’t) assume they are reaching the exact consumer online. There is a strict need for privacy, so while offline data is filled with PII, online advertising needs to stay on the correct side of consumer privacy protocols.
CRM data can work a little differently. Onboarding can be used to build lookalikes. A healthy offline CRM program likely knows what consumers like to buy, how often they enter stores, and even makes assumptions about other offers or programs that might appeal to different buckets of customers.
If there’s good data that shows, for example, that customers in a certain region of the country make larger purchases in stores, then that’s valuable. Advertisers can geo-target different offers toward online consumers living in that region.
In contrast, the offline data may show that many of the consumers with very large mutual fund accounts are over 60 years old. That’s an interesting nugget of information, but there’s not much you can do with that. Does that mean mutual fund companies should target all people over 60? I’m sure many people in that age group do not have large mutual fund accounts.
The next decision brands have to make is methodological, pertaining to how much visibility they want into their actual customer attributes. Does it make more sense for the brand to have a third party house all the data, and in turn the brand only sees the output that goes into online marketing efforts? Or does the brand want to handle all the data themselves, and then onboard what they feel are the best insights?
Onboarding is about marketers acting on their own data, as opposed to (at best) using a first-party analysis and then using third-party data to find audience online. Onboarding combines visibility and the ability to take action, so on the one hand, a brand that handles this process itself keeps complete control of its data and never allows another party to play, minimizing potential security leaks in the transfer. However, third parties have data expertise that they can offer on the data management and transfer, and can introduce the latest in data hygiene to improve the effectiveness of the data, along with the best of encoding methodologies. Generally, these parties can lower the costs of managing and onboarding the data as well. Some brands may turn to their database manager partner for the role of onboarding, giving them a familiar partner, but not necessarily an expert in onboarding or digital. Regardless of which way they go, it’s important to work with trusted partners and avoid unscrupulous or unknown companies.
Once these key decisions are out of the way, brands need to start messaging with the data. Brands can use onboarded data to prospect new customers and go after new conversions, but that works differently than cross- and up-selling. The prospect pool for most brands is infinite online, but not refined like their customer base. Marketers need methods to apply appropriate third party data algorithmically to identify the best prospects. It sounds simple but in fact can be very complex: identify which aspects of your customer base have similarities and (this is critical) can be assessed in the wild using other data sources.Ultimately, the goal of onboarding is twofold: the communication with an existing customer across channels and the ability to find new customers (with the possibility of reaching inactive customers). The data allows advertisers to build more sophisticated audience profiles, which should shape targeting strategy and results. Onboarding is not a panacea, but a tool to improve online targeting and communication. Once the data is onboard, advertisers have to use it the same way they would any other data source, whether it’s first- or third-party, and continue to monitor the data to find the insights that drive toward their KPIs.