Similarly, via its Best College back-to-school campaign, Mr.
Revelle said the retailer did not want to "alienate parents" by its
choice of young talent, but knew it had to change tactics from
years past. "Previously, the ads weren't connecting with the
decision makers, which were the students. So we featured the
student above all else," he said.
Knowing that messaging resonates differently with different
customer segments is important, said analyst Scott Tilghman of B.
Riley & Co. In the case of mobile phones: "The parents want to
know what the deals are. Can my child upgrade? What's it mean to my
bill? Are there any sales?" he said. By comparison, students want
to know what models, colors and cases are available. With Athena,
Best Buy "can hit both with what is essentially the same product,
but with two different types of messages," said Mr. Tilghman.
In another instance, for Best Buy's Labor Day appliance sale,
Athena helped the company create marketing messages that targeted
late-stage millennials or Gen Xers, who are typically more likely
to be moving at that time of year.
"Instead of running one campaign, we run campaigns in parallel,"
Mr. Revelle explained. He added, "We're certainly happy with the
[recent marketing] results and will do a similar thing with holiday
this year."
Athena, which is named after the Greek goddess of wisdom, was
formed several years ago with loyalty program data. It connected
the company's previously siloed departments under one umbrella to
create carefully chosen messages that would hit the right inboxes
or platforms at the right time, Mr. Revelle said. Athena's
capabilities have slowly ramped up, having started with data from
email/CRM, then incorporated a focus on marketing and promotional
messaging during last year's holiday season.
"We can take our real customer base and put them into segments
based on knowledge of activity with Best Buy -- shopping and
purchasing behavior and service consumption behavior. We put it all
together to inform segmentation. We use third-party research to
[further inform] segmentation and then center marketing campaigns,"
Mr. Revelle said, adding that Best Buy employs data scientists who
work alongside the marketing team. "In that regard, we're somewhat
state-of-the-art."
The $40 billion electronics retailer, which saw a 17% jump in
online comparable store sales during the second quarter, has also
"sacrificed," Mr. Revelle said, by not spending money on TV or
print ads it otherwise might have run during back-to-school. "We
invested so many dollars into Athena," Mr. Revelle said. "But we're
seeing good results."
Best Buy spent more than $59 million on U.S. measured-media
during the first six months of 2015, down from nearly $116 million
during the same period in 2014, according to Kantar Media. Overall,
the retailer spent $635.5 million on domestic advertising last
year, according to the Ad Age Datacenter.
The knowledge Athena provides has also created a need for
different messages -- and a lot more of them than in years past.
This shift helped spur the retailer's move away from an
agency-of-record model. Last April, Best Buy parted ways with
Crispin Porter & Bogusky and moved to a
project-by-project model. Mr. Revelle said Best Buy has "more
demand for creative than supply" at this point.
"We're redeploying a lot of the resources we might have put
against a major campaign via an AOR to much more tailored creative
that can be reused across social networks and email banners," among
other platforms, in order to leverage the message over as many
channels as possible, said Mr. Revelle. The depth of its database
allows the retailer to be nimble and test what types of messages
customers connect with, which, he said, produces a wider variety of
creative overall.
Best Buy is also using Athena to improve its new wedding
registry program. After connecting with third-party data vendors to
capture customers that are likely to be getting married soon,
Athena learns what assortments are interesting to people in this
category, then determines how to time promotions for the right
products. It also gathers data on whether or not people who are
already registered want to know when an item has been purchased for
them, and what messaging makes people engage more with the
registry.
Kate McShane of Citibank Global Markets is impressed with
Athena's positive impact on marketing efficiency and is not
surprised by its payoff, which has been visible for other retailers
with similar initiatives. "Like anyone who's making an investment
of this kind for technology, it's one of those things that just
gets better over time," said Ms. McShane.