The New 'Co-op' Isn't Retail Ad Budgets, It's Audience Data

Marketing, especially the frequently cutthroat world of retail, has always been a competitive business. But a new form of cooperation is emerging between retailers and brand marketers that is driving more sales and better returns for both sides. Instead of cooperating over advertising, promotion and distribution arrangements to drive consumers into stores or onto commerce sites in search of particular brands, the new “co-op” doesn’t involve the exchange of marketing budgets per se, but consumer targeting data.

In the new data exchange model, brands acquire audience data from consumers searching for information about brands in their category on a retailer’s Web site and use it to target or “re-target” them with explicit offers or appeals. On the other side, retailers are able to target new customers by acquiring data from marketers identifying consumers that visited their brand Web sites in search of products distributed at retail or on their commerce sites.

“We weren’t able to reach our younger consumers,” explains Mike Baron, president of New Hampshire-based appliance retail chain Baron’s Major Brands Appliances. “Just a few weeks into” leveraging data from national appliance brand site visitors, he says traffic to Baron’s site and stores has soared, as has their sales, among elusive younger consumers.

“We are very pleased to say our business is now tracking 7% ahead of the industry,” he says of the program, which was enabled through a unique new audience exchange being powered by Boston-based OwnerIQ.

Since quietly launching the self-serve audience exchange cooperative two years ago, OwnerIQ has cleared more than 1,000 exchanges between 570 national and retail consumer brands. What makes it work, says OwnerIQ Founder and CEO Jay Habegger, is that both sides have complete control over what consumer data they exchange and with whom.

He says that control is crucial, because retailers want to avoid so-called “channel” conflicts in which their consumer data might fall into the hands of another retailer competing in their territory or online. Conversely, he said major national brands need to ensure that data about their site visitors doesn’t lead to conversions for a competing brand’s products.

Those channel conflict controls are enabled through the platform, which OwnerIQ calls the Co-operative Audience Exchange Platform, or a shorter, more tongue-friendly “CoEx.”

The exchange has two immediate values for both consumer brand marketers and retailers. One is that they can make a market out of their audience data by selling it to someone on the other side of the retail marketing process without creating a channel conflict. The other, as Baron’s Mike Baron noted, is they can build their audience reach among new consumers.

“This is moving from a very rare and unusual thing to something that is becoming more of a regular way for business to be done,” says OwnerIQ’s Habegger, citing the platform’s 1,000th exchange milestone.

Currently, he says such requests are growing at a rate of “five times month over month.”
1 comment about "The New 'Co-op' Isn't Retail Ad Budgets, It's Audience Data".
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