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ADDRESSABILITY APPLIED - A USE CASE
The emerging opportunity in Addressability At Scale (AAS) is the
key driver of competitive advantage in the Age of the Customer.
Addressability At Scale (AAS) is defined as the opportunity to create competitive advantage through the delivery of targeted, personalized
experiences to consumers.
AAS is enabled through the application of data and analytics to the massively expanding digital audience platforms.
Addressability at Scale
AAS
AAS is leveraging your greatest asset and your competitive advantage:
Your Customer Data.
To define & target high-value segments in the digital media landscape that will:
Improve Media Efficiency
Expand Funnel & Take Share
Grow More Profitable Customers
AAS The Opportunity
© 2014 Merkle. All Rights Reserved. Confidential 4
AAS & Your Business Model
EFFICIENCY: LOWER FUNNEL OPTIMIZATION
Take existing digital media to next level of performance
through improved targeting, relevance and measurement.
Drive down cost per sale metrics and eliminate wasted spend.
GROWTH: FUNNEL EXPANSION
PROFIT: CUSTOMER RETENTION & ENGAGEMENT New customer programs that leverage all of customer data in all media to proactively
retain and grow the profit from of the customer portfolio.
Pivot from media measurement to customer segment measurement.
1 2
3
Reallocate media savings to enable growth from new addressable individuals.
Through attribution, have the confidence to see their progression through the funnel and increase predictable return/value.
© 2014 Merkle. All Rights Reserved. Confidential 5
The Addressability Spectrum
Anonymous Partially Identified Identified IDENTIFICATION
Unknown Some Knowledge Well Known
CHANNELS & MEDIA
KNOWLEDGE
Mass Segmented Personalized EXPERIENCES
The entire spectrum of data is leveraged with AAS.
© 2014 Merkle. All Rights Reserved. Confidential 6
Addressability At Scale (AAS)
© 2014 Merkle. All Rights Reserved. Confidential
SPECIALTY RETAIL & CPG | STRONG BRAND | CROWDED LUXURY MARKET
Addressability Applied Use Case: Kiehl’s
© 2014 Merkle. All Rights Reserved. Confidential 7
Addressability At Scale (AAS)
American Cosmetics Brand Retailer
Founded in 1851 in NYC
Bought by L’Oreal in 2000
Over 250 Stores Worldwide
Distinguished for their Edgy Marketing & Simple Packaging
Loyal Customer Base & Strong Online Presence
Over 1,000 Points of Sale in Department Stores, Airports, etc.
© 2014 Merkle. All Rights Reserved. Confidential
© 2014 Merkle. All Rights Reserved. Confidential 8
The AAS Customer Experience
CHRISTINA
33 Years Old
Lives in Miami
Social Butterfly
Until May 2013 not widely aware of Kiehl’s
Today: She is a happy Club Member
Keeps Her Life Online: Commerce & Social
Christina & her friends are a core Kiehl’s Segment: CHIC & TRENDY • Single/Married No Children • Urban/Suburban Lifestyle • Incomes $50-75k + • Mostly White Collar Professionals
8 © 2014 Merkle. All Rights Reserved. Confidential
© 2014 Merkle. All Rights Reserved. Confidential 9
The AAS Customer Experience
SEGMENT INSIGHTS & PURCHASING BEHAVIOR
Uses the Internet as primary vehicle for research and purchasing of a wide variety of goods (clothes, home goods, electronics, etc.)
While they like to shop with friends, they use their favorite store apps to browse products and do not buy anything without researching the price and asking their friends on Facebook and Twitter.
NEEDS A cosmetic line that’s got them covered in both skincare and make up. Their lives are busy, so once they commit to a quality brand they won’t continue shopping around.
SEGMENT: CHIC & TRENDY
9 © 2014 Merkle. All Rights Reserved. Confidential
© 2014 Merkle. All Rights Reserved. Confidential 10
The AAS Customer Experience
WE DO NOT KNOW Christine
Her Friends
How to speak to her 1:1 with personalized offers
SEGMENT: CHIC & TRENDY
WE DO KNOW How to target People like Christina
How to target Friends of Christina
The segment’s average value, media preferences & behavior
10 © 2014 Merkle. All Rights Reserved. Confidential
© 2014 Merkle. All Rights Reserved. Confidential 11
The AAS Customer Experience
11 © 2014 Merkle. All Rights Reserved. Confidential 11 © 2014 Merkle. All Rights Reserved. Confidential
Addressability Applied
Christina’s Experience
FROM ANONYMOUS
TO IDENTIFIED
© 2014 Merkle. All Rights Reserved. Confidential 12
Addressability Applied: Christina’s Experience
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
2 3
5 6 7 4
9 10 8
1 Social Display Remarketing
Store Visit GEO Mobile
© 2014 Merkle. All Rights Reserved. Confidential 13
Addressability Applied: Christina’s Experience
2 3
5 6 7 4
9 10 8
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
Social Display Remarketing
Store Visit GEO Mobile
© 2014 Merkle. All Rights Reserved. Confidential 14
Addressability Applied: Christina’s Experience
3
5 6 7 4
9 10 8
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
© 2014 Merkle. All Rights Reserved. Confidential 15
Addressability Applied: Christina’s Experience
5 6 7 4
9 10 8
Christina browses through the website and gets familiar with the products.
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
© 2014 Merkle. All Rights Reserved. Confidential 16
Addressability Applied: Christina’s Experience
5 6 7
9 10 8
Her interest growing, she consults Google Shopping for information about competitive products.
Christina browses through the website and gets familiar with the products.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
© 2014 Merkle. All Rights Reserved. Confidential 17
Addressability Applied: Christina’s Experience
6 7
9 10 8
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
© 2014 Merkle. All Rights Reserved. Confidential 18
Addressability Applied: Christina’s Experience
7
9 10 8
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Already on her phone, Christina clicks the ad and is taken directly to the product’s page on the Kiehl’s mobile-optimized website.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
© 2014 Merkle. All Rights Reserved. Confidential 19
Addressability Applied: Christina’s Experience
9 10 8
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Already on her phone, Christina clicks the ad and is taken directly to the product’s page on the Kiehl’s mobile-optimized website.
She is pressed for time, but sees the option to sign up for email alerts. She submits her address.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
ADDRESS IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
© 2014 Merkle. All Rights Reserved. Confidential 20
Addressability Applied: Christina’s Experience
9 10
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Already on her phone, Christina clicks the ad and is taken directly to the product’s page on the Kiehl’s mobile-optimized website.
She is pressed for time, but sees the option to sign up for email alerts. She submits her address.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
ADDRESS IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
While she running errands the next day, a push notification on her phone indicates that she has an personalized free sample offer from her local store advisor.
Social Display Remarketing
Store Visit GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
© 2014 Merkle. All Rights Reserved. Confidential 21
Addressability Applied: Christina’s Experience
10
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Already on her phone, Christina clicks the ad and is taken directly to the product’s page on the Kiehl’s mobile-optimized website.
She is pressed for time, but sees the option to sign up for email alerts. She submits her address.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Online Conversion
Website
SEGMENT IDENTIFIED
ADDRESS IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Christina goes to the store to meet the advisor, grab the samples and try the products herself.
Store Visit GEO Mobile
Social Display Remarketing
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
While she running errands the next day, a push notification on her phone indicates that she has an personalized free sample offer from her local store advisor.
© 2014 Merkle. All Rights Reserved. Confidential 22
Addressability Applied: Christina’s Experience
SEGMENT IDENTIFIED
Already on her phone, Christina clicks the ad and is taken directly to the product’s page on the Kiehl’s mobile-optimized website.
She is pressed for time, but sees the option to sign up for email alerts. She submits her address.
Armed with a redemption code and a few more online reviews, she makes her first purchase. A relationship with Kiehl’s is born.
INDIVIDUAL IDENTIFIED
Christina browses through the website and gets familiar with the products.
Her interest growing, she consults Google Shopping for information about competitive products.
Targeted Display Paid Search
Paid Search PLAs Mobile Site Email
Store Visit Online Conversion
Website
ADDRESS IDENTIFIED
Brand recognition kicks in. Curious, she searches on Google for “Kiehl’s” and clicks on the ad.
Social Display Remarketing
GEO Mobile
While browsing her favorite website, Christina is served a Display ad through lookalike modeling.
While she is on Facebook later, she is retargeted with an ad for the same products she browsed the day prior. She clicks.
While she running errands the next day, a push notification on her phone indicates that she has an personalized free sample offer from her local store advisor.
Christina goes to the store to meet the advisor, grab the samples and try the products herself.
© 2014 Merkle. All Rights Reserved. Confidential 23
The Purchase Funnel Areas of Impact
Addressability Applied
© 2014 Merkle. All Rights Reserved. Confidential 24
AAS Applied: The Purchase Funnel
EFFICIENCIES: LOWER FUNNEL OPTIMIZATION
Data driven targeting across all media.
Retargeting 2.0 - using customer data to rank and target most responsive and profitable segments vs. just site visits.
Using behavior data including tags, history, types of ads clicked to score cookies based on previous interactions that fire more relevant cookie pools.
Match display to search cookies and prioritize those exposed to both.
Drive down cost per sale metrics and eliminate wasted spend.
The savings drive/enable upper funnel expansion and growth.
1
© 2014 Merkle. All Rights Reserved. Confidential 25
AAS Applied: The Purchase Funnel
GROWTH: UPPER FUNNEL EXPANSION
Expand market share by targeting the right prospects using your customer data-informed segments.
Linking online addressable platforms to offline conversion activity we can map the value of the conversion to the media buy so we can replicate the scenario in subsequent and expansive media plans.
Build attribution models to predict funnel progression and illuminate our path to expand the funnel through more aggressive & diverse media.
2
© 2014 Merkle. All Rights Reserved. Confidential 26
AAS Applied: The Purchase Funnel
PROFIT: CUSTOMER RETENTION & VALUE
Pulling more addressable/known targets of higher value through the funnel via improved targeting/modeling increases the value of your customer portfolio.
Existing CRM program performance improved to increase frequency, AOV and proactively reduce churn/lapse rates.
Now all media can be used for customer marketing (not just email) to onboard new and increase existing customer engagement/purchase.
INTEGRATED CUSTOMER PROGRAMS SEARCH | DISPLAY | SOCIAL | MOBILE | EMAIL
3
© 2014 Merkle. All Rights Reserved. Confidential 27
Your Business Model
Addressability Applied
© 2014 Merkle. All Rights Reserved. Confidential 28
Addressability Applied: Timing
Define Technology
Develop Segmentation
Develop Attribution
Create Media Test Plan
Q1 - BUILD Q2 – TEST/REFINE
Online/Offline Data Targeting
Segmentation Validation
Attribution Refinement
Read/Refine Test Results
© 2014 Merkle. All Rights Reserved. Confidential 29
Addressability Applied: Pro-forma Build
We Build the Business Case w/ You
© 2014 Merkle. All Rights Reserved. Confidential 30
Addressability Applied: Pro-forma Build
We Build the Business Case w/ You
And Summarize It!
© 2014 Merkle. All Rights Reserved. Confidential 31
• 1%-3% increase in customer acquisition over 5 years • Increased response/conversion from digital media efficiency by
connecting Anonymous Data to CRM data for better targeting, measurement and segmentation
• Increased effectiveness of remarketing and personalization (offer/package) in Search, Display, Site and Email
$15MM $43MM $73MM $206MM
Addressability Applied: ROI Summary/Exec Summary
$39MM $104MM $170MM $382MM NPV of Revenue Impact
• Roughly 1bp (~31k subs) reduction in Voluntary Churn YoY over next 5 years
• Combine Customer service, Billing contacts with customer data to improve churn rates
$24MM $61MM $97MM $176MM
YEAR 1 YEAR 2 YEAR 3 YEARS 4+5
AAS Acquisition
AAS Customer Remarketing
Like So…
© 2014 Merkle. All Rights Reserved. Confidential 32
Phase 1 Build
Phase 1 Return
Phase 2 Expansion
Phase 2 Return
Lower Funnel Optimization Upper Funnel Expansion Customer Value Optimization
Addressability Applied: Roadmap
Phase 3 Return
Phase 3 CRM Programs
Efficiencies Fund Expansion to
Take Share with Profit
© 2014 Merkle. All Rights Reserved. Confidential 33
Addressability Spectrum Consumer Experience
Purchase Funnel Impact Your Business
Addressability Applied RECAP
© 2014 Merkle. All Rights Reserved. Confidential 34
Q&A Discussion
Addressability Applied
© 2014 Merkle. All Rights Reserved. Confidential 35
Discussion Questions
Is the AAS opportunity real to you?
Do you and your organization have the ability to address this opportunity?
If not – why?
If so – what would you do differently?
What is clear vs. what is unclear?
© 2014 Merkle. All Rights Reserved. Confidential 36
Ken Geis VP - Retail & Consumer Goods
Merkle Inc. [email protected]
610-529-4599
Thank You!