Brands are constantly on the hunt for innovative ways to draw in new customers and engage with current customers. As a result, brand marketing has evolved and now includes social channels and online efforts. The ability to rein in marketing costs and improve targeted advertising can be a differentiator among brands in a digital commerce world.
Commerce Signals, which builds marketing and business intelligence solutions based on U.S. credit card data, thinks it has a solution to the problem. The Verisk Financial company has released Audiences, a digital advertising targeting tool that Nick Mangiapane, chief marketing officer of Commerce Signals, said is far more accurate than current marketing tools.
“[It] allows marketers buying digital advertising to target [users] based on actual purchases,” he told Modern Shipper.
Shift to digital marketing
According to the IAB Brand Disruption 2021 report, physical retail store closings grew about three times in 2020 while e-commerce sales as a share of overall retail grew between five and seven times faster than pre-COVID levels to account for about 23% of sales by December 2020.
In 2020, the top 200 advertisers supplied 88% of all U.S. network television revenue; but on Facebook alone, there are more than 10 million individual advertisers. IAB pointed out that digital channels are clearly benefiting small and midsized brands. To illustrate, it pointed to the cosmetic retail segment, in which 20 manufacturers drove 96% of all traditional retail sales. Conversely, those same 20 only held 14% of the e-commerce cosmetic segment.
To reach this increasingly digital audience, brands are throwing money at the problem. Statista projects the retail industry will spend $35.48 billion in digital advertising this year, up more than $7 billion from 2020 and nearly double what was spent in 2017. Across all industries, digital ad spend is expected to reach $172 billion this year.
A more targeted approach
Commerce Signals believes its Audiences is a more targeted and effective method for brands hoping to reach consumers. Mangiapane explained that Audiences uses data Commerce Signals already collects from its vast set of credit and debit card transactions to create a profile of 162 million U.S. consumers.
“We’re able to join different cards into a wallet view, so think of it as a more holistic view of spending,” Mangiapane said.
While all the data used to build Audiences is anonymized, Mangiapane said it is highly accurate, allowing Commerce Signals to offer its 500 unique Audience databases to brands with a 90% chance that the person that marketing pitch is sent to is a likely, or potential, customer.
“At 90% accuracy, we’re a lot, lot better than random,” Mangiapane said. “I haven’t seen anyone else in their marketing that is doing 90%.”
An academic study in 2018, “How Effective Is Third-Party Consumer Profiling and Audience Delivery?: Evidence from Field Studies” by Neumann, et al, highlighted the difficulty brands have in reaching a specific audience member using traditional methods. The authors concluded that a targeting campaign with the single parameter of gender was only accurate 42% of the time. Adding a second parameter — age range — dropped accuracy to 24%.
“To put that in perspective, that is less than the natural population gender split of 50%. That means a campaign run with the targeting parameter would be 15% worse than a ‘spray-and -pray’ campaign run with no parameters at all,” wrote Augustine Fou in a 2020 Forbes contributor article.
Commerce Signals is able to drive that accuracy rate higher because of the data it collects from 40 million credit card transactions it tracks. Commerce Signals’ patented technology platform leverages permissioned, anonymized transactional data from banks and processors, with the ability to continuously analyze shopper behavior across virtually all retail and direct-to-consumer business categories, down to specific retailers by ZIP code or store location.
Audiences, which represents a one-time buy for each campaign, allows a brand to select the Audience it wants the marketing campaign to be sent to. Commerce Signals then sends that list to the company that is buying the media on the brand’s behalf. Mangiapane said restaurants particularly like Audiences, which launched in stealth mode earlier this year. Audiences examples may be dog food, beer, wine and spirits, or Target shoppers. Category and specific Audiences are part of the set.
Mangiapane said the Audiences available today are at the national level, but custom Audiences can be built down to ZIP code levels.