Source: Open clip art Pixabay

Time to Pay the Piper

First of all, we’ll call back Eve and Steve from our last article. They gained a lot of value, information, and power to communicate with brands by being always on. They were pampered with convenience and customization for everything they bought online.

Now, they pay for these apparently free services by revealing themselves and giving marketers virtually unlimited information about themselves.

This article will be about how this information is stored and analyzed for Consumer Segmentation. How marketers gain these detailed data. And then how they use it to come up with targeted marketing campaigns.

What is always-on Consumer data?

Source: Pixabay

Eve and Steve have an online lifestyle. They interact with social media. They generate content and emotions online. They visit pages, search for information and share everything about themselves.

Every time they click “I agree” or “I accept” without reading anything, they are actually creating a network of information hotspots about themselves.

Data collection from their Social media and phone apps is just the tip of the iceberg. From what they search, what pages they go to, where they click, how much time they spend on each page, what they like, what they don’t, their reactions to the posts and advertisements, to their own posts reveals their online behavior. Everything is collected by at least one entity.

Source: Pixabay

Social media data is collected by social media companies. App data are collected by respective apps, for example, Amazon will have data on their buying preferences, Netflix will have their entertainment preferences and Domino’s will have their pizza preferences. The pages they visit record their behavior on that page in the form of cookies.

Cookies are simple codes sent from a website and stored on the user’s web browser while the user is online. They enable websites to remember information about what they click on, their user data, their log-ins, and their credit card information if they have used it on the website.

Source: Pixabay

They’re connected to the “always-on” infrastructure. Every device that they use and every way they interact with the internet will have some information about them. Their GPS will record their location, their fit-bits will record what kinds of activities they do, their home assistants will record their grocery buying behavior and their smart fridges will record their eating habits.

All of it forms Consumer engagement data.

What happens with this “Consumer engagement data”?

Let's first introduce the game. Then we’ll introduce the players.

Source: Author’s own

The Global online Advertisement Industry is expected to grow over $600 billion USD. More than 80% of the sum will be directed towards phone advertising. US, China, UK, Japan, and Germany are among the biggest online advertisement markets. India and Russia are reported to be one of the fastest growing online advertisement markets.

Source: Author’s own

Now, meet the “minions”: The web crawlers. These are simple programs that collect all engagement data from respective sites and platforms.

There are data broking companies that collect these data from web crawlers. They also buy data from other data sources. Social media companies and other apps with high engagement numbers either sell their data to data broking companies or to the marketers directly.

Source: Geralt Pixabay

Data brokers or “aggregators” take this huge chunk of data and cross-reference it to verify with other sources. Then they find segments in the market. The main purpose of this analytics is to divide the consumer market into segments according to their online lifestyle.

Eve just posted that she’s traveling to London. Data aggregators have segmented Eve and tagged her with 1000 similar other people as “Ones who are traveling to London”. This batch of consumers will be sold for almost $200 per thousand to advertisers.

The first thing that Eve does after she lands is that she checks her phone. No matter what site she goes to, no matter what app she opens, she’ll get ads about hotels in London. If her consumer data suggests that she likes going to concerts, she’ll be seeing ads about concerts in London all over her phone.

Source: 200 degrees Pixabay

Whenever Eve clicks on a page or opens an app, by the time the page loads, Eve becomes available as an inventory in ad exchanges such as eXelate, BlueKai, Google, and DoubleClick.

Data brokers have pre-determined segments of consumers that they sell to advertisers. Now, advertiser places bids on the spaces available for advertisement against other advertisers and data brokers competing for the same space. Let’s say “Hotel Turquoise” won the bid.

After the page loads, Eve will see an advertisement for “Hotel Turquoise”. This is an example of how “Real-time bidding” happens when advertisers buy inventories of consumers through automized instantaneous auctions.

Why Segment the Consumer Market?

Source: geralt Pixabay

All consumers are not alike, they have different needs, different backgrounds, different levels of understanding and experiences. So marketing to everyone in incoherent ways can’t be effective. To target one market segment, there has to be a highly focused campaign based on their identity. It needs to nudge them to buy.

Source: jm exclusives Pixabay

Consumer engagement data not only helps in the segmentation of the consumer market but also in the predictive analytics for future consumption of that particular segment of consumers.

Tailored ads are powerful because they allow advertisers to zero in on the users that already have an interest in their products. Marketers put together content and advertisements based on topics that are making the buzz among their potential consumers. They adapt their campaigns on the basis of what’s making the buzz.

The adaptation of such campaigns in response to what consumers care about makes it possible for marketers to gain consumer loyalty.

Steve and Eve are in their homes watching the same show on their respective smart TVs. When it’s time for an ad, they’ll see different ads. Eve’s phone will show the same ad that her TV is showing but it’ll not be the same ad that Steve sees on his TV and his phone.

Source: Andrea Piacquadio Pexels

Marketers take a cross-screen marketing approach while targeting consumers on basis of their market segments.

So it doesn’t matter if Steve is playing candy crush on his phone while watching an episode of walking dead on his smart TV linked to his Youtube, ads will be the same on both his devices.

The consumer gets convenience and empowerment. Marketers get insight into consumer behavior for targeted marketing. Everybody gets what they want. This is terrific!

It’s all about value exchanges right?

It sure is, till it’s not.

In the next article, we’ll talk about the evils surrounding consumer engagement data, its analytics, and its security. We’ll also address topics related to consumer well-being and sustainable green marketing.

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