Homeward bound
Wherever we go we leave data footprints. Our trail extends far and wide – both digitally and offline – reflecting our travel choices, purchasing habits and leisure time. In fact it’s one of the few constants we can rely on in this highly mobile world.
At home we eat and sleep, raise our children and plan our futures. Our households are the building blocks of society and have become the barometer for measuring spending power and economic wellbeing. But for digital marketers, who are trying to understand online behaviour, not being to able to pin customers to their specific households can prove rather problematic, as they are increasingly confronted with conflicting, unstructured and baseless data.
Sharing and privacy – the opt-out conundrum
Direct marketing data companies identified this requirement within the ‘real’ world many years ago and built consumer lifestyle databases – essentially a register of every marketable individual in the country – to meet that demand.
This process has become increasingly challenging: in spite of the general trend for sharing the detail of our daily activities with friends and family on an unprecedented scale via social platforms, ‘opting out’ of sharing our personal data for marketing purposes is still commonplace. Although opt-out rates from the Electoral Roll are slowing, a third of the voting UK population still do not provide consent for their data to be passed onto marketing firms. Additionally, many millions have expressed a preference not to be marketed to via direct mail.
Behaviours, not demographics
To counter this problem, bespoke and extremely high volume surveys and transactional data are often used to fill in the gaps of these “missing” consumers. Some companies also incorporate publically available and anonymised demographic sources, such as the decennial census – although the future of such expensive collection methods is uncertain.
Organisations who have been collecting data for many years will have amassed a huge amount of behavioural information – often in excess of 20 million data points identifying individuals at their current address. By manipulating datasets of this size, the responses of those individuals for whom nothing is known can be accurately predicted. However, extending insight into this ‘unknown’ consumer universe requires a deep understanding of complex predictive modelling techniques.
Ultimately, the aim is to produce a single view of each UK consumer – ensuring all individuals fit into every postal address, without duplication. Most importantly, all lifestyle data linked to a specific consumer (e.g. self-reported financial behaviour, interests, channel choices) remain associated with that consumer; whilst information that pertains to the house in which the individual lives (number of rooms, building type etc.) remains with that building – but can be tied to the next person who moves in. This process has provided the bedrock of offline direct marketing databases for decades.
Scale and personalisation
It took many years for direct marketers to recognise that by the selected application of these individual and household level variables, they could create huge uplift in acquisition or retention campaigns.
The online advertising industry is at the start of this journey. Graduate media planners still create display advertising campaigns based on anonymous behavioural segments that bear no relation to a potential customer’s real life experiences; outdated terms (e.g. social grades) and loose definitions (e.g. age band 18-34) to define an audience are commonplace.
This is partly a result of the reluctance of digital marketers to handle data that identifies specific people as they browse the web, but also the scale required to reach the maximum target audience. It also explains why the vast proportion of advertising spend is wasted across channels. Fortunately, this is beginning to change; there is now broad acceptance that online behaviour is inextricably linked to offline circumstance, and the binding glue is where we live.
Bricks, not clicks
What do your customers and prospects really care about? What do they spend their money on? How many children do they have? How much do they earn? Where do they live and how long have they lived there? These questions can only be answered with knowledge at ground level – a complete and accurate view of a household and the individuals living within it.
More reliable than the ephemeral nature of cookies, emails, mobile numbers or social media handles – the power and relevance of our address should never be underestimated. It clarifies who we are and remains the foundation that ties us into an increasingly complex multichannel world.
