Burton Hohman / Digital Marketing / June 3rd, 2014

Bigger Data Holds the Future for Traditional Advertising

Over the last few years we have seen a continued increase in spending in digital advertising and this shows no sign of stopping – for the first time, online advertising revenues surpassed broadcast TV ad revenues. Digital advertising offers unprecedented reach, narrow targeting and heaps of sweet, sweet data – digital can hit the smartphone in your wallet, the tablet resting on the couch, the laptops scattered around your house, and – if Google gets its way – the thermostat on your wall.

Nest ad, from Slash Gear http://www.slashgear.com/can-google-make-us-want-nest-ads-21329923/

For those of us in digital, it’s hard to imagine how traditional advertisers operate without having access to globs of data to see who is seeing our ads and how they are interacting with our sites. We can see who is actually responding to an ad, what they did and which creative performed best for a particular set of customers. In the meantime, traditional ads rely on reach, ratings and sorts of other mystical numbers without being able to directly tie it to results.

In recent years, the conversation in advertising has been about shifting ad spends and effort to digital because it gives us more data than offline advertising, along with a lower cost to customers that can be tracked. Well, I think the next conversation should be how we can bring this data into offline advertising: to know who our ads reached and why they had a specific impact – not just measuring what a campaign did.

It starts with finding the same data depth in traditional advertising that we enjoy in the digital realm. It’s not going to be easy and some of this technology is still emerging, but here are some things I think traditional advertisers will have to look forward to in the coming years.

Seeing the Big Picture

While digital advertisers benefit from deeper data, they can’t reach everyone. The average American spends 11 hours per day with electronic media – but only 2 hours of that is through a smartphone or the Internet on a PC. So even though digital advertisers can see deeper and clearer into their audience, they don’t have the full picture.

So we need to expand the tools of traditional advertisers to provide the clarity and tracking that their digital counterparts enjoy.

Not only would this allow for significantly more accurate ratings for television and radio programs, but it could offer a way to specifically track who is watching or listening to a commercial. This would give television and radio advertisers significantly more accurate data when making their media buys and offer yet another offline metric to add to a CRM database.

Eventually, we’ll see truly full-circle data for customers across every medium – it’s just a matter of seeing the full picture.

Brick-and-Mortar Stores

Online shopping continues to cut deeper and deeper into the pockets of traditional retailers, but physical retailers benefit from happier customers than online competitors, so don’t expect the death of brick-and-mortar shops in the near future. Despite the fact that many of us buy online, the truth is that online retail makes up 10% of total US retail sales (up from 5% in 2012). Online sales are growing fast, but they’re still a long way from dominant.

Ok, there's some trouble. Image credit: waywuwei
Ok, there’s some trouble. Image credit: waywuwei

If you are anything like me, when you open your wallet you probably have quite a few loyalty or rewards cards hidden in there – while this gives you a personal incentive to shop locally at your favorite store, they’re also a great way for stores to track the purchases that you are making.

Tracking transactions has never been an issues for retailers, but what about visits, or average visit duration, or number of products viewed. Metrics like this sound better suited to Google Analytics rather than a Target show floor, but some companies are looking for ways to get a more accurate understanding of what their customers are doing in their stores.

Shopkick offers retail stores a more accurate way of tracking who is visiting their stores. Shopkick gives retail stores a beacon that transmits an inaudible sound that your smartphone can detect. Unlike Foursquare, where you could be across the street and check-in, people don’t get tracked until they physically step into the building. The phone could also pick up the signal once they leave the store, thus giving store owners an accurate picture of how long a customer stayed.

Retailers would have to match this with a strong rewards system to incentivize shoppers to download and run the app, but rewards and loyalty programs are already ingrained into the retail landscape.

With Shopkick, we can see who is browsing a store – but how do we track what they’re looking at? And which displays are most effective?

The next step would be tracking what products people are looking at in your store. This technology exists, but it’s not being used on a wide scale yet. Imagine you are walking through your local Target and you come across a display for their new summer fashions. As you approach the rack, your phone buzzes. A message pops up that says, “Buy one of our new summer styles, and get 25% off a pair of sunglasses.”

NFC tech could change many industries, from payment to hotel check-in. Image credit: Sam Churchill
NFC tech could change many industries, from payment to hotel check-in. Image credit: Sam Churchill

You look around, but this promotion isn’t on any signs, it’s only on your phone. Target has this deal broadcasting out of a nearby sunglasses rack from a Near Field Communications chip in the display. While this NFC technology isn’t built into most smartphones at the moment, there are rumors that it will be built into the next iPhone.

This would allow retail stores to not only track what products are being purchased, but could tell how many people are coming into stores and what products they look at. The savvy marketer could take this information and match it with their existing CRM database to get a detailed look at what customers are doing both online and offline.

Retailers are already fanatical about reorganizing displays to meet customer flow and expectations, but deeper data would give the ability to arrange displays for specific customers, or even to alert sales associates on the floor to a shopper with known characteristics.

Television and Radio

The television and radio industries are going through an exciting time of change. In 2012 almost 5 percent of cable subscribers decided to cut the cord and get their media only from the internet.  This number will continue grow as the use of Netflix, Hulu and Amazon Prime increases. However, TV ratings are still based off of Nielsen boxes and diaries which are given to a fraction of the population to track the shows that they watch.

Facebook launched a new tool that can determine what TV show you are watching in about 15 seconds (it’s like Shazam, except you don’t want it and it’s always listening – even if it’s optional, for now). This could drastically change the way we track TV ratings.

Rather than Nielsen coming out and installing a box that attaches to an existing cable box it could build an app that uses this technology to simply detect your TV audio.

With more than half of Americans using smartphones, the sample size for TV ratings would increase significantly. Arbitron (now part of Nielsen), the consumer research company, already uses a similar technology in a separate device called a portable people meter, PPM. Why not use this already existing technology with something that most people have on them at all times?

For those keeping track, at this point an advertiser would have a detailed account of a customer’s web and mobile usage of a site, detailed accounts of how many times they have visited a store, how long they stayed, what products they looked at and the purchases they have made. Adding television and radio information as well would allow advertisers to directly see if people seeing a commercial lead to a visit to a website or trip to the store.

The data is out there, traditional advertisers and retailers just need the ability to harness it.

Do you think we will start to see more companies trying to tie their offline and online advertising together?