Article by Diaz Nesamoney
I have recently spoken to many CMOs and Chief Digital Officers of CPG companies (our friends in the UK and elsewhere call them FMCG). They are fascinated by the concept of data-driven dynamic creative and personalization.
After decades of blasting consumers with one size fits all messaging—not just on TV and print (where you had little choice but to do so)—but also on digital channels. The mantra was “maximum reach for the lowest cost” or, in other words, blast ads to every man, woman and child whether or not they will ever be consumers of the product.
A lot of this kind of thinking was perhaps a holdover from the days when there was really only one Claritin, one Colgate toothpaste and one Coke. Brand managers later figured out that some level of product customization was necessary and important, as different sub groups of the target audience were likely to have different requirements. Then, different products were born: Claritin for Kids, Chewable Claritin, Liquid Claritin, Claritin Grape Flavor (both liquid and chewables), Claritin for 12 hours, 24 hours, and so on. This was a brilliant move because this kind of personalization really got consumers to purchase the products tailored for them.
When Ads Subtract
Advertising, however, stayed the same. So we saw one ad for Coke – the same message to everyone in the world. It was the same advertising approach for almost every big brand out there. As consumer engagement started to fade due to advertising fatigue, the response to boosting more engagement was always “hit them with more ads” – in the name of “reach.”
Along came re-targeting, which many retailers (with strong online sales) realized was a way to offer some degree of relevance by retargeting site visitors with products they had browsed but not purchased. Soon, this evolved into the dynamic creative optimization technology (DCO) that would optimally select products and messaging for the individual.
Now, DCO has evolved into true personalization. Combining first-party data from the brand sites, CRM systems, along with other contextual and third-party demographic data, brands leverage the rich data to build a holistic view of the individual and market to them with precise and relevant messaging and products.
Many CPG brands have only been watching enviously as retailers continue to exert more and more influence on the purchase decision, thanks to treasure troves of data they hold about the consumers and the use of personalized marketing platforms to engage them.
As I work with several large CPG companies on personalization strategies, it has become clear that a critical kind of data that has tremendous capacity to engage consumers is often being ignored—contextual data. Many marketers who have access to first-party or third-party behavioral data flock to it, while often ignoring data about the user’s context: i.e. where they are, what they are doing, what’s happening around them. One of the nice things about contextual data is that it does not require identifying the user personally, which these days is a good thing with the increase in scrutiny around the collection and use of user data. Contextual data is mostly determined without having to identify the user.
Contextual data like weather and location are the most common and easy-to-get, but increasingly there is a lot more out there assembled by specialist vendors. For example, Grapeshot is a tech company that scours websites across the globe and gleans contextual meaning about each site, such as determining whether a website that describes footwear is a fashion site or a site on mountain climbing gear. Such context gathered in real-time enables DCO platforms to change the ad messaging in real-time, and change products and creative designs of an ad based on the context of the site.
This sort of technology is a great boon to CPG marketers, since it does not rely on visits by consumers to their own websites, which are minimal, or to their stores, which are also minimal or non-existent. Having the ability to determine the context of the web page or mobile site the user is on while viewing the brand’s advertisement can enable DCO platforms to precisely fine tune messaging for the optimal outcome.
Several other valuable sources of contextual data include pollen (for allergy medications), UV data such as WeatherAlpha (for skin care products), sports data like SportRadar (many consumer brands like beverages correlate well to sports data), events and holidays (for consumer gift items), or financial data from the likes of Xignite (product messaging based on financial market trends). Even time of day, which doesn’t seem like it would make a big difference, is proving to be a valuable source of user context and can be used to drive messaging—a breakfast food item in the morning, beer just before happy hour, you get the idea.
Personalization, once a tool considered to be only for retailers and brands with rich consumer data, is now showing tremendous benefits in user engagement to CPG brands that have harnessed the power of contextual data. Consumers will appreciate brands delivering advertisements that are tailored to their needs intelligently, rewarding them with consideration, purchase and loyalty. Isn’t that what marketers are supposed to do?