Insights from a Conversant ExecutiveJohn Conley, Vice President of Data Warehouse

3 WAYS TO DRIVE GROWTH USING YOUR BIG DATA

INTRO

GETTING THERE

• Unite Offline and Online Customer Data and Associate it with Individual Profiles

• Create One-To-One Personalized Messages and Communication Streams Across Devices at Scale

• Initiate a Best Next Communications Stream

PERSONALIZATION DRIVES REVENUE AND PROFIT

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Table of Contents

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Most marketers believe that programs powered by big data have the potential to radically improve business and drive growth. But understanding the potential value of big data – and actually realizing it – are two very different things.

While many brands have invested millions to collect this valuable marketing intelligence, few CMOs claim to be maximizing their results with it. While leveraging your big data to drive sales isn’t necessarily an easy thing, it is possible – and it doesn’t require years to develop big data strategies and tactics you can count on to deliver higher return. In fact, many can reap the benefits in weeks.

3 WAYS TO DRIVE GROWTH USING YOUR BIG DATA

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There was a time when marketing one-to-one to millions seemed like a pipedream. However, with today’s platform integration capabilities and advancements in technology, you can turn your vast target audience into millions of one-person audiences and actually treat every prospect and customer as an individual. Best of all, you can do all of this by using anonymized profiles that protect consumer privacy.

When you accurately process and transform big data into actionable insights you have the opportunity to create compelling brand experiences and programs that motivate purchase at an individual level. This is all possible today with customized messages tailored to an individual’s needs and preferences.

The following three-step approach has the potential to dramatically grow your sales. Follow these critical steps to deliver personalized marketing using your big data:

THE BIG OPPORTUNITY: PERSONALIZATION

When you unite your brand’s offline and online customer data you can create a more complete picture of your prospects and customers and understand their current needs, buy stages and motivations.

This may seem like an impossible task, but it’s not. And it’s far easier when you leverage the experience and expertise of others. For instance, Conversant spent a decade testing and implementing technologies to meet this challenge. By leveraging advances in data warehousing, we’re able to ingest marketing data from multiple online and offline sources and then associate all of an individual’s actions with a single, anonymized user identity. That process turns enormous amounts of cross-channel marketing information into rich, anonymized customer profiles.

We’ve found great success using a massively scalable database management system from XtremeData. This solution allows us to combine the most granular SKU-level offline and online purchase information, rewards program records, CRM interaction data, e-store activity and more. We can then create a complete picture of a consumer and brand’s relationship surfacing valuable insights into what a consumer needs and how best to motivate their purchases.

UNITE OFFLINE AND ONLINE CUSTOMER DATA AND ASSOCIATE IT WITH INDIVIDUAL PROFILES

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Once you’ve created anonymized profiles from your data, the next step is to make these profiles actionable. Using big data, it’s possible to create personalized ads that reflect a person’s interests, behaviors and lifestyle. These ads together form communications streams that consider demonstrated interest and buy stage so they can most effectively move a consumer toward purchase. A particular ad might reflect imagery and colors that have elicited a positive response in the past or it may feature the products that best meet the immediate needs of the consumer. Because individuals vary widely, personalized creative development produces thousands, or even millions, of dynamic ad variations that enable individual relevance at great scale.

It’s worth noting that personalized ads are very different from retargeting ads that simply feature the last product an individual viewed on your site. For example, two consumers interested in the same watch should in many cases receive two completely different ads. For the

prestige consumer, the ad might feature the watch in context with edgy, luxury-driven imagery, whereas a consumer who is driven by quality would receive an ad that highlights the time-tested reputation and customer ratings of the watch. This degree of personalization is made possible with recent technological advancements that enable rapid analysis of vast amounts of user-level information. Massively parallel data processing is necessary in order to ingest and analyze numerous data sources and channels simultaneously in real-time.

Big data also helps to optimize when and how communication streams reach the consumer. A brand can deliver messages to the same consumer across different devices they use throughout the day – and do so in the most effective format. For example, a consumer who may be best persuaded through the use of video can be reached as they browse on their smartphone at breakfast, their PC during the workday and on their tablet as they browse at night.

CREATE ONE-TO-ONE PERSONALIZED MESSAGES AND COMMUNICATION STREAMS ACROSS DEVICES AT SCALE

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PERSONALIZATION DRIVES REVENUE AND PROFITBy associating big data with individuals, marketers can create robust, dynamically updated profiles that drive extraordinary results. Statistically validated testing across more than 170 leading retailers found that personalized media programs yielded significant incremental sales results. Our research indicates that personalized media can drive as much as 3-6% of total brand sales.

Measurement does warrant some specific attention. When you want to assess the business impact of personalized media,

or any other marketing tactic, you need to understand attribution and the total incremental sales delivered, which can only be measured by evaluating both online and offline channels. Incrementality can only be measured by separating the sales that were caused by the program from those that would have occurred anyway. We recommend a continuous A/B testing methodology that encompasses online, in-store, and other channels, in order to get an accurate read. This methodology uses

statistically validated techniques to determine total incremental sales from all channels.

In conclusion, it’s important to recognize that big data and personalization may help drive growth in your business – and it can do so in such a way that maintains the highest standards of consumer privacy. Don’t wait another year to get your data house in order. Your competition may already be steps ahead on this critical work. This could be a tremendous growth opportunity for your business and the time to act is now.

As a marketer, you’ve likely heard of the “next best” sales opportunity, but with personalization, marketers should be more concerned with “best next.” A “best next” personalized communication stream delivers ads that are dynamically optimized based on both recent and historical consumer actions.

For example, imagine that a consumer goes to a store to buy an overcoat. When that retailer prepares to deliver a new message to that person, it’s likely they’re not in the market for another coat. Instead, an ad featuring a scarf and gloves that match the new coat would be more likely to drive an incremental purchase. And not just any

scarf and gloves, but the set that best reflects the consumer’s lifestyle and brand preferences.

A robust personalization platform identifies the “best next” sales opportunity based upon a near-real-time analysis of a person’s offline and online actions. Our internal client research shows that the near-real-time component is critical because the retailer is more likely to sell him the matching scarf if they send the message right after the coat is purchased.

“Best next” isn’t just about related items. Profile analysis reveals a consumer’s precise stage in the buying process and determines the right set of goods and stimuli to motivate their next purchase.

INITIATE A “BEST NEXT” PERSONALIZED COMMUNICATIONS STREAM

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ABOUT THE AUTHOR

John Conley, Vice President, Data Warehousing, Conversant Media

John is a 1995 graduate of the University of Illinois and has spent his career working in data warehousing, with a particular focus on how retail can leverage big data platforms for improved inventory management, customer engagement and sales optimization. In May 2010, John joined Conversant and managed the transformation of the company’s legacy database formats into the current technology formation, a hybrid Data Warehouse consisting of both Hadoop and massively parallel processing database management systems. Today, he continues to focus on delivering world-class hyper-personalization for Conversant clients based on the latest data platform innovations.

ABOUT CONVERSANTConversant, Inc. (NASDAQ: CNVR) is the leader in personalized digital marketing. Conversant helps the world’s biggest companies grow by creating personalized experiences that deliver higher returns for brands and greater satisfaction for people. We offer a fully integrated personalization platform, personalized media programs and the world’s largest affiliate marketing network – all fueled by a deep understanding of what motivatespeople to engage, connect and buy.

For more information, please visit www.conversantmedia.com.

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