Why Every Advertiser Needs Retail Data to Reach the Right Audience
Mass reach advertising isn’t cutting it anymore. Radio voiceovers and commercial breaks in between TV segments might be the easiest way to reach large audiences, but it's no longer the most effective.
Today, the way advertisers reach customers is constantly evolving with the emergence of new channels and innovations. In this fragmented digital landscape, it's extremely important that advertisers across industries not only deliver the right messages, but deliver them to the right people.
Consider this: toothpaste brands are, in theory, seeking to reach everyone that's mindful of dental hygiene. However, not all consumers have the same needs and preferences. Some might have sensitive teeth, prefer a whitening element, or seek children’s products. As a toothpaste brand, a targeted advertising approach can drive more customer adoption and retention by delivering specific messages based on consumer preferences. Retail data can help achieve this.
Why Retail Data Matters
Retail data provides information from verified purchases and loyalty programs. Advertisers can use this information to reach people who are most likely to buy their products with the right messages, all while maintaining precision and scale.
Personalization has become more challenging as customer touchpoints expand. By necessity, the pandemic popularized e-commerce. While the channel has endured as a reliable way to reach consumers, many still prefer the in-store experience. This new, blended shopping norm requires advertisers to think more holistically in order to achieve a comprehensive view of the customer journey.
Retail data is helping brands reach the right consumers at each step of the way. For example, an advertiser might discover that certain audiences who are exposed to ads on connected TV and then retargeted on their mobile devices are more likely to buy products.
In addition to evolving brand-consumer interactions, advertisers are also contending with shifting privacy standards. With retail data, advertisers can rely on information collected through verified, consented methods to strike a balance between targeted advertising and consumer-conscious practices.
The Impact of Retail Data on Advertising
In addition to adherence to new privacy standards and consumer expectations, advertisers that activate retail data can expect to achieve more precision and efficiency across media channels.
Specifically, retail data allows advertisers to get very granular about the audiences they're targeting. For example, it can help to differentiate between a customer who purchased a baby toy as a gift vs. one who is expecting a child, allowing advertisers to use that information to tailor messaging.
It also allows advertisers to be very intentional about who they're targeting. With years (or even decades) of data and rich e-commerce signals, retailers can create hyper-relevant, durable audience segments with information about customers’ life stages, shopping tendencies and more. By taking a data-driven approach, advertisers can use these segments to reach the right audience and reduce wasted media spend to drive growth for their brands.
Not only does this unlock business benefits, but it also improves the customer experience by delivering the tailored experiences that consumers demand. For example, a survey by digital performance marketing agency Adlucent found that 71 percent of respondents would prefer ads that are tailored to their personalized interests and shopping habits.
In sum, retail data allows advertisers to uphold an advertising ecosystem that's mutually beneficial, delivering positive brand interaction while driving results for the business.
Best Practices for Leveraging Retail Data
To reap the full benefits of retail data, there are several best practices advertisers should implement.
Importantly, advertisers should leverage retail data to enhance existing advertising campaigns driven by first- and third-party data. With first-party data, advertisers can build relationships with current customers through CRMs, pixels and more. Third-party data provides additional signals like demographics or behavior from other data partners to further increase scale. Retail data allows advertisers to differentiate beyond these existing datasets, reaching new customers to increase market share.
To reach the right balance of precision and scale, advertisers should create ad groups for each targeting strategy with a combination of each relevant dataset. Importantly, these segments should be layered on across retailers to drive the most incremental reach.
These audience targeting strategies should be applied across media plans and channels. Consumers are now discovering, researching and making purchase decisions about products in multiple ways. It’s important for brands to engage with shoppers wherever they consume media.
With these best practices, advertisers can future-proof their businesses against shifting consumer habits and privacy policies to deliver the right messages to the right people at the right time.
Bene Lochtenberg is a senior manager of product marketing at The Trade Desk, the leading independent demand-side platform that enables advertisers to plan, execute and measure digital advertising campaigns.