I’ve recently been in the market for a ski vacation package. Choosing where to go is a pretty big decision, so I’ve been doing my homework, researching via the various resort websites, travel aggregator sites, and reading online reviews etc.
I’m also a moderate user of social media, primarily Instagram, and to a lesser extent Facebook. So shortly after having begun the process of researching where to go, I began to be bombarded with sponsored posts on both networks, with everything from offers for hotel deals and airline flights, to attractive all-inclusive packages, and no end of travel insurance proposals.
Now I obviously understand the principle of targeting me with this content – makes perfect sense….to a point. And that point for me is reached once I’ve made my decision, and actually pulled the trigger on the deal (BTW I chose a lovely Club Med site in Italy). The problem is that 3 weeks have gone by since I ordered the package deal, and I’m still getting bombarded for deals on every ski site, ski hotel and airline you can imagine…including from Club Med!
And it’s really, really annoying.
I notify Instagram every time it happens via their “Hide Ad” function…but they don’t seem to be listening (or perhaps they just don’t care, as long as the advertisers are willing to pay them for additional exposures, even if they are no longer relevant to me).
In the world of consumer-packaged goods, this phenomenon is preventable, primarily by deploying advanced targeting modules that takes into account past purchases. Advanced systems are updated in near real-time with item level detail of what each customers has purchased up to that point, and by knowing that customer’s purchase cycle for that item based on their purchase history, the system will only be permitted to target the customer with an offer for the same or similar item when it’s nearing repurchase time. The personalization can be even more sophisticated in that individual customer purchases are aggregated with the purchases of other members of their household, preventing a situation where a husband may be targeted with offers for items that his wife purchased the previous day.
Targeting based on the timing of past purchases is just one of the multitude of modules that personalization engines using Artificial Intelligence deploy to ensure the highest possible relevancy of offers at any given time. Other modules take into account brand preferences, seasonality, item affinities, inventory levels at the shopper’s primary purchase location (you don’t want to send an offer for an item that is out of stock at the shopper’s neighborhood store), and much more.
That’s all pretty complex to manage when you take into account that a large supermarket chain could have tens of millions of shoppers. Each one may shop more than once per week via a combination of multiple stores and online, and each one consumes content (and receives offers) via multiple communication channels including email, web, app, direct mail, SMS etc. It gets even more complex when the retailer needs to ensure that targeting efforts meet desired objectives which sometimes compete with one another such as increasing basket lift versus driving frequency. Profitability and lifetime value of each customer also need to be taken into account, based on sophisticated estimation models. And don’t forget that retailers and their suppliers also need to collaborate to optimize marketing spend budgets to mutual satisfaction…. you get the picture.
Given that advanced personalization platforms which include the functionality described above are already in action in some of the more progressive supermarket and drugstore chains, the Club Med example simply doesn’t occur. Retailers and their suppliers who have gone down this road can be sure that they’re distributing relevant, up to date offer content, the effect of which is highly measurable, and constantly optimizing itself in a never-ending machine learning loop.
The supermarket and consumer goods industry has led the way in effective, personalized marketing at scale.
What I want for Christmas is that other industries, and the media that they use to target potential customers, follow their lead.
Wishing all of our friends around the world a very happy holiday season, and a great start to 2020.
Chen Katz
