Customer Centricity Unlocks Advertising’s Future

Last summer, Microsoft, Google, Yahoo and AOL invested several billions of dollars to acquire digital advertising firms to help marketers reach people at the moment of interest. Adding to the excitement is the fact that marketing channels like interactive television, online advertising and mobile marketing are becoming as addressable as your physical and virtual mailboxes.

These trends are re-shaping how consumers and businesses interact. Companies that realize the full potential of these trends will understand how to engage hand-raisers and turn them into loyal customers.

Seeing the Opportunity in Data Direct marketing practices will soon become advertising’s new religion—if you know who your best customers are, you can proactively reach prospects just like them through addressable media. Getting there will require collaboration between database marketers and brand advertisers.

Many companies have a wealth of customer information in their marketing databases. The best marketers have a single view of each customer across the organization’s various channels and can predict the offers, media and even creative to which specific customers are most likely to respond. For decades, direct marketers have combined this insight with demographic, attitudinal and lifestage information to reach the best prospects with relevant messages through segmentation and database marketing.

Buying addressable advertising without using database marketing practices is like buying a Porsche and only using its first two gears—you paid lots of money for its performance, but you never touched more than 60% of its power.

The sooner you can create and foster joint projects between the database marketing and advertising teams, the faster you’ll race ahead of the competition with true advertising optimization.

Gain Customer Clarity with Multi-Faceted Insight
Data already residing in your customer databases can provide a lot of historical information on your customers, but it doesn’t really speak to who they are as individuals. You likely have customers who bought the same product but exist on opposite ends of the socio-economic spectrum. Or, you may know that two prospects are interested in the same product based on similar search terms, but you don’t know enough about them to truly tailor your creative or offer.

This is the next plane of advertising optimization, where you not only know prospects are raising their hands with interest, but understand enough about them to truly tailor your approach. This consumer insight goes far beyond age, income and gender to include lifestage information like new home owner, new parent, young urbanite, young family or recently retired. It can include purchase behavior outside of that in your own database, offering insight into product category purchases and media preferences. Comprehensive media and advertising optimization takes place when this kind of information intersects with behavior to zero-in on the population most likely to respond and buy.

Deep Dive: Media Usage
To illustrate the importance of the media preferences of your customers, we examined several media channels utilizing Acxiom’s consumer data assets, including Internet, radio, television, magazines, newspapers, outdoor, Yellow Pages, direct mail and e-mail.

About 6% of U.S. households are more likely to be “heavy users” of five or more media channels than other consumers. They are true media junkies! Another six percent are more likely to include people who are not “heavy users” of any media channels. Think of them as the media channel moderates.

According to Acxiom research conducted with data provider Mediamark Research and Intelligence, media junkies are:

• Twice as likely to buy from www.bestbuy.com and go to Banana Republic
• 76% more likely to have auto insurance with Progressive
• 50% more likely to say they intend to purchase their first house this year
• 77% less likely to be responsive to direct mail than the media moderates
• 20% less likely to be heavy newspaper readers
• 40% less likely to watch prime-time TV

Media channel moderates are:

• 50% more likely to buy pet products and spend hundreds of dollars on video games
• 63% more likely to insure three or more cars and have three or more cell phones
• 40% more likely than average to be dialing Domino’s pizza
• More likely to go on vacation as a family in a towable trailer camper

If you want to drive the future of addressable advertising in your company make certain you know where all the gears are. Your advertising and database marketing teams can show you the way but only if they work together.

Josh Herman is innovation leader for Acxiom.