By: Ronny Golan, CEO and Founder of ViewersLogic
Consumer Packaged Goods (CPG) brands have long faced a challenge in understanding customer behaviour across the entire journey to purchase.
The problem stems from the very nature of how these businesses function and operate. While CPG brands have complete influence over how goods are made, they have very little knowledge or visibility over the end purchase, since third-party suppliers and retailers are responsible for selling these products to consumers.
Consequently, CPG brands are unable to connect the entire journey to purchase, meaning there is often a marked disconnect between media spend, promotions and eventual purchase. In other words, these companies do not have the data to connect the dots and understand what led consumers to purchase a product.
To solve this, CPG brands have accumulated huge, disparate databases in the hope that they can be fused together to reveal customer insights at scale.
This approach seeks to answer fundamental questions such as:
“What are the touchpoints customers go through as part of their journey to purchase our product?
“What do they do in each touchpoint?”
“How can we influence their behaviour? Should we spend more on promotions or on advertising?”
“How does thejourney of our customers differ from our competition?”
Unfortunately, this strategy has failed. Even with all the promises of big data, it’s still not possible for CPG brands to accurately uncover the contributing factors to purchase and consequently understand how to optimise their spend.
But not all hope is lost. Now there is finally a way to connect the journey to purchase with absolute certainty.
The answer is Single Source Data.
Single Source Data is the measurement of TV and other media/marketing exposure, geo-positioning (shop and other location data) and purchase behaviour, over time for the same individual. It allows brands to match an individual’s degree of marketing exposure to a specific advertising campaign and determine his or her equivalent purchasing behaviour.
In short, this means brands can empirically determine how advertising spend and frequency across all touchpoints and channels influences ROI.
Why has big data failed brands?
Big data has failed CPG brands for a variety of reasons – it’s a good attempt at connecting the path to purchase, but it doesn’t go far enough.
Not only that CPG companies have very limited first party data, they have no visibility whatsoever on what happened before the purchase
This means understanding what interactions a customer had across advertising, TV, online, searches andin-store promotions. In other words, what was it – specifically – that ultimately led to the transaction? To get a full picture, marketers also need to know when people buy competitive brands.
All this data is pivotal to informing future campaigns. If it’s unreliable, then this can lead to wastage and poor performance.
Herein lies the problem. Big data cannot measure exposure to target segments across many channels and devices. Moreover, understanding the behaviour in a specific touchpoint without understanding how it is influenced by the other touchpoints, gives a distorted view of the customer journey.
There are numerous challenges that add to the deficiencies of big data, such as increasing GDPR and privacy measurements, the demise of the third-party cookie and other moves by Apple and Google that make it harder to fuse data sets together.
Big data was the best available approach but not what is required. Today, a new solution is needed.
The blind men and the elephant
To illustrate how Single Source Data solves a global problem for advertisers and marketers, let’s consider a simple analogy.
Three blind men walk down a path and meet an elephant. The first man holds its trunk and says the elephant is like a snake. The second touches its leg and says the elephant is like a tree. The third touches its stomach and says the elephant is like a boat.
All are right but all are wrong. Seeing the whole elephantis the only way one can truly understand it.
In this analogy, each blind man is akin to a single silo of one type of data. Collecting the analysis of more and more blind men brings us no closer to understanding what the elephant is. In fact, it pushes us further from the truth as different silos purport different truths.
Single Source Data is the equivalent of opening our eyes to see the whole elephant.
Only when we see the entire customer journey can we understand the needs, wants, preferences and desires of customers. Only then can we understand why, when and how people make purchase decisions, and, crucially, what can influence them.
Single Source Data is the way forward
Single Source Data will soon become the gold standard of data, replacing what big data has set out to achieve yet failed to accomplish.
By harnessing the power of Single Source Data, CPG brands can create In-depth customer profiles that encompass a breadth of actions, from how individuals consume media to what they search for, how are they influenced by price promotions, where they shop and how they behave in the physical and online world.
Because Single Source Data monitors all media exposure of an individual (TV, website, apps) and all resulting actions, both online and offline (website visits, store visits, purchases, etc), CPG brands can understand the actual contribution of each channel, or the combination of channels, that is required to make sales.
A good example of this can be found in the following article where Single Source Data revealed, for the first time, the huge effect TV advertising has on online-ad-clicks. Such data prevents brands from taking wrong decisions which are based on siloed data.
This also adds value to large but thin data sets. It is the map that helps brands navigate between big data sets and finally connect all aspects of the journey to purchase, without needing to fuse or stitch different data sets together.
As we move into 2022, CPG brands that continue to rely on disparate data sets will inevitably face a decline. The same rings true for data providers, whose data will be less relevant than before once Single Source Data becomes widely used. This poses key challenges for issues of trust, value and confidence in the marketplace.
Fully sighted brands, however, those that harness the power of Single Source Data to see the whole picture, will be able to supercharge performance, optimise campaigns and make decisions with absolute certainty.
In a world of doubt and uncertainty, Single Source Data is the key that can unlock a CPG brand’s true potential.