Data, Customer Experience and Calculated Risk in the Marketing

When I used to be heavily invested in music, teachers would often say, “The more you put in, the more you’ll get out.” This is equally valid with regard to digital information. For example, the more online digital information I knowingly or unknowingly provide through browsing habits, forms I fill in, subscriptions, purchases, games I play or any corner of the Internet I visit, the more I get back.

Editor’s Note: While this piece was written for the promotional marketing audience, the author’s discussion of data and customer experience is relevant to all marketers.

When I used to be heavily invested in music, teachers would often say, “The more you put in, the more you’ll get out.” This is true with my career, in my relationships and with my health. This is equally valid with regard to digital information. For example, the more online digital information I knowingly or unknowingly provide through browsing habits, forms I fill in, subscriptions, purchases, games I play or any corner of the Internet I visit, the more I get back. And delving a little deeper, it’s interesting to discover that my returns are tangential to my online patterns.

Have you ever noticed that after you’ve been researching a particular product, it “magically” appears as an advertisement on an unrelated website? That marketing tactic is called retargeting. Had I named the tactic, I may well have called it “echo marketing,” because what we “shout” into our Internet browser echoes back at us in fascinating ways. Those of us that shout the loudest endure the most intense echoes.

Not surprisingly, the majority of human beings don’t do a lot of changing in their adult years. For the most part, we create patterns and routines that provide us the comfort of habit as opposed to the discomfort of change. It’s a survival mechanism that must date back to our ancestral days: Repeat what works, or die by repeating what doesn’t. Thus, it’s ingrained in us to perform habits that result in the least amount of hardship. And as the years have gone by and survival has become less of an issue in the technological age, the instinct is still there, but the cost is progress.

What companies inspire you the most? Which individuals motivate you to be your best self? Chances are that the companies and the people that inspire you are evolvers. According to Fortune, the world’s most admired companies in 2018 were Apple, Amazon and Alphabet. Apart from starting with the letter “A,” these three companies embody the spirit of innovation, evolution and change. These are companies that are dismantling the very walls and mountains, whose colossal size create the largest echoes. Unwilling to suffer the same fate as Blockbuster Video or Toys R Us, evolvers aren’t interested in an echo. They’re more interested in following the sweet sound of unencumbered curiosity.

In math, the equal sign is flanked by two expressions that share the same value — a universal concept that’s largely accepted by society. But what’s interesting is that we’ve begun to apply the equal sign to behavioral equations that are becoming shockingly accurate (though never as absolute as in pure mathematics). It is in this fascinating environment in which we find ourselves today. Here’s an example: Someone who visits antique car websites frequently = someone who is interested in antique cars. Though this may be correct or incorrect, we can add to the equation to increase the probability of its accuracy. Here’s the new equation: Someone who visits antique car websites frequently and shops for antique car parts online = someone who has an antique car. Again, though it may be correct or incorrect, the likelihood of its accuracy increases.

When we start to accumulate and add variables such as when this person browses antique car websites, how long they browse for, how often they browse, what specific pages they navigate, and what their age and gender is, the equation becomes eerily precise. What I’m getting at is that we’re now capable of creating a personality profile for every browser. As an advertiser armed with this kind of knowledge, it becomes quite simple to launch appropriate messages to the person behind the profile, thus adding a song to their echo chamber.

We can view this reality in many ways. One way to see it is to accept the efficiency of the system in that the information that interests us now comes to us automatically. In other words, I get what I need. What an amazing time to be alive, right? Or, we can see it a little differently by understanding that our habits, in this technological age, are putting us in a prison in which reality is only what we know. Those who choose to see it this way may contend that this myopic view of the world is potentially quite dangerous and doesn’t encourage open-mindedness and curiosity.

As a supplier (as well as a marketer), I must ask myself, does the possession of data come with a responsibility, not only for the obvious safekeeping of said data but for how I use it? Of course it does! Today, I’m using your precious data to fulfill the needs you already have, and I’m using it to broaden your horizons (and my own as well). What our company is attempting to do with data is to create opportunity. We can do that by highlighting which products your customers are likely to want. We can do that by showing you the evolutionary patterns your customers are exhibiting, which results in new roads, which lead to new destinations, hitherto uncharted. We’re using data to learn what we don’t already know — and I find that exhilarating and exciting. Soon, we’ll be able to move into new products categories that we’d never imagined getting into, catering to the needs of our customers.

And this is precisely why so much is being made of customer experience (CX) these days. Cultivate the right experience for your customer and you’re golden. But miss the mark, and you’ve lost a customer. Blockbuster Video failed to understand the changing needs of its customers and ultimately failed to provide the time-appropriate experience that they demanded. Using data in a responsible, ethical and creative manner can both feed the echo chamber and enrich it.

The companies I admire the most in our industry are those that are category designers. They’re not fearful of failure. They take calculated risks and attempt to use creativity and foresight to create positive change, by orders of magnitude. Engineering and reengineering are part of their constitution. They are the masters of their echo chambers because they fill them with winning formulas, and they’re bold when composing new songs. They’re not afraid to transform their chambers by moving and manipulating walls to create new acoustics. Our industry is in the midst of the greatest transformation in its history. Using a combination of technology, experience, insight and curiosity, we’re reading minds. Telepathy isn’t a dream anymore; we’re already doing it. Scary? No way! If you’re like me, you’re building the most beautiful cathedral you can imagine. You’re an architect. You have a voice. Use it.

Why Behavioral Science Is Critical to Marketing and Research

What if we could identify consumers’ underlying emotions or motivations to improve our understanding of whether they were actually going to purchase a product? Over the past few years, marketing and research has been digging into the “why” behind behaviors to get even deeper, below the surface of the insights we deliver. The goal is to help brands better understand the true drivers of consumers’ behavior — and it all starts with behavioral science.

What if we could identify consumers’ underlying emotions or motivations to improve our understanding of whether they were actually going to purchase a product? Over the past few years, marketing and research has been digging into the “why” behind behaviors to get even deeper, below the surface of the insights we deliver. The goal is to help brands better understand the true drivers of consumers’ behavior — and it all starts with behavioral science.

What Is Behavioral Science?

Behavioral science isn’t a new industry, but within the past few years is something of an emerging topic in marketing and research. At its core, behavioral science and the research that results from it, seeks to understand the many aspects related to someone’s habits or decision-making. Most importantly, as we noted, it helps to understand why people make certain decisions.

If you think of that in the context of our marketing and product strategies, it’s clear why behavioral science plays a role in market research. There are a variety of methods that can get close to truly understanding consumer behavior, but much of them can fail to capture empirical evidence — sensory information captured through observations and the documentation of behaviors through experimentation.

As a result, the importance and rise of behavioral science in marketing and research is no small subject. Just in the past year, there have already been numerous events discussing behavioral science specific to gathering and analyzing data to understand why consumers make decisions — but marketers and researchers, by and large, are still figuring out how to leverage it.

Leveraging Behavioral Data

Big data can be used as a possible solution for at least two reasons. First, it gives us access to more data than ever before, including data based on actual behavior from purchasing, web analytics, subscriptions, and more. As a result, big data can reduce the struggles we sometimes have with differences between stated versus observed behavior.

Second, there are big data sources that allow us to understand motivations of our consumers by examining the big 5 personality traits for millions and millions of people. By understanding different personalities, we can begin to realize if being “extroverted” or “conscientious” drives consumers’ purchasing. Some suggest that behavioral science and the resulting data on motivations behind decision making will be the new normal for market research. We agree that understanding what people don’t tell us in surveys is as important as what they do. Together, these two types of data give us a more well-rounded picture of consumer behavior, and with the right methodology, you can gain this knowledge quickly.

In a specific use case, a brand was looking to understand their target audience for a new product innovation. They had hypothesis’ about what this audience would look like, and likely could have gained that knowledge through standard quantitative research. However, by incorporating an approach that combines survey data and big data, they were able to understand who their audience was, but also what would motivate them to purchase this particular new product. The moral of the story? Consumers are more than just the people that buy your product.

Behavioral Targeting Industry Needs Further Delineation

I received an interesting press release the other day from ValueClick Media that recapped a recent behavioral targeting panel that took the stage at the Hard Rock Hotel in Chicago.

The panel featured an industry analyst (David Hallerman, senior analyst, eMarketer), a behavioral targeting product expert (Joshua Koran, vice president, targeting and optimization, ValueClick, Inc.), a brand marketer (Julian Chu, Director of Acquisition Marketing, Discover) and an interactive agency executive (Sam Wehrs, Digital Activation Director, Starcom).
 

I received an interesting press release the other day from ValueClick Media that recapped a recent behavioral targeting panel that took the stage at the Hard Rock Hotel in Chicago.

The panel featured an industry analyst (David Hallerman, senior analyst, eMarketer), a behavioral targeting product expert (Joshua Koran, vice president, targeting and optimization, ValueClick, Inc.), a brand marketer (Julian Chu, Director of Acquisition Marketing, Discover) and an interactive agency executive (Sam Wehrs, Digital Activation Director, Starcom).

What I found most interesting about the release was that fact the group discussed and agreed on the need for delineation between the different approaches to behavioral targeting.

“While it is important to understand the difference between retargeting – which Hallerman referred to as “reactive” – and the more complex models, the panel agreed it is also critical to understand the differences within the more sophisticated group of behavioral targeting approaches, and Joshua Koran shared three designations: “clustering,” “custom business rules” and “predictive attributes,” the release said.

The “clustering” approach assigns each visitor to one and only one segment while the “custom business rules” approach offers marketers the ability to target visitors who have done X events in Y days, with Boolean operators of “and.” “or,” and “not.” Finally, the “predictive attributes” approach automates the assignment of interest categories based on the visitor activities that best correlate with performance; thus, the system is continuously learning to identify multiple interest attributes per visitor.

Another notable takeaway was the need for a focus on the customer experience and the corresponding importance of demonstrating value to customers when serving behaviorally targeted ads.

According to the release Julian Chu offered three questions marketers must address to make behavioral targeting a valuable experience for customers instead of merely serving the ads, which would unavoidably become customer annoyance: How are you going to do it? Where is it going to happen? What is going to happen at that time?

Presented as part of ValueClick Media’s ongoing Media Lounge education event series, this event – The Changing Behavioral Targeting Landscape – as well as the discussion itself underscored the importance of education relative to this increasingly important online advertising technique.

Food for thought!

Consumers Know They Are Being Tracked

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

According to a recently released study by consumer privacy organization TRUSTe and global market insight
and information group TNS, consumers generally know that their internet activities are being tracked for purposes of targeting
advertising.

Are they OK with it? Not really. They study also revealed a high level of concern associated with that tracking,
even when it isn’t associated with personally identifiable information.

Behavioral targeting, which enables marketers to deliver customized experiences and improved marketing
metrics, also runs up against consumer privacy concerns and calls for greater
transparency around emerging tracking and targeting techniques.

Based on
the results of the survey, lack of transparency may factor into privacy
concerns. In fact, 71 percent of online consumers are aware that their browsing
information may be collected by a third party for advertising purposes, but
only 40 percent are familiar with the term “behavioral targeting.” In addition, 57
percent of respondents said they are not comfortable with advertisers using
that browsing history to serve relevant ads, even when that information
cannot be tied to their names or any other personal information.

Meanwhile, a majority (91 percent) of respondents expressed willingness
to take necessary steps to assure increased privacy online when presented
with the tools to control their internet tracking and advertising
experience, and this, accoridng to TRUSTe and TNS, suggests a need for added education, transparency and choices
for behavioral targeting. Nearly two-thirds (64 percent) would choose to
see online ads only from online stores and brands that they know and trust
and 44 percent of respondents would click buttons or icons to make that
happen.

To the contrary, a similar proportion of consumers (42 percent) said they
would sign up for an online registry to ensure that advertisers are not
able to track browsing behaviors, even if it meant that they would receive
more ads that are less relevant to their interests.

What these results boil down to is that consumers say they want more relevant advertising, but don’t want
to be tracked in order to get it.

What is the key takeaway here? Transparency, transparency, transparency. Consumers today are more sophisticated and educated than ever before. They understand advertising, and in many cases, respond to it and even enjoy it. So don’t take chances–be a trustworthy and transparent company.