Marketers Get On Board the Offline-to-Online Data Train
Business Potential Is Fueling Acquisition Spree in Sector
Marketers are finally starting to connect their offline data dots to the web, and some of the biggest names in digital and data including Google, AOL and Acxiom, see dollar signs. All three companies made acquisitions this month in the hopes of capitalizing on a burgeoning trend: turning offline consumer data into a tool for digital marketing.
Most marketers with data from retail transactions, call centers and CRM and loyalty programs have yet to take it online for ad planning, targeting and campaign measurement. But it's on their minds.
"This is in every conversation I'm in with a client now. Everybody wants to know what's really driving sales or transactions," said Bob Ivins, chief data officer at media agency Mindshare.
Facebook, Google, Twitter, AOL and data services giant Acxiom are taking notice. Earlier in May, Google purchased Adometry, a company that uses in-store transaction information to measure digital marketing campaigns, for an undisclosed sum. AOL picked up Adometry competitor Convertro for approximately $101 million soon after.
Most recently, data management and services behemoth Acxiom snapped up data middleman LiveRamp for $310 million. The company is one of a handful that operate behind-the-scenes, actually enabling the transfer of data gathered offline to the digital realm. This offline-to-online data process is known as "on-boarding" in the industry.
The attribution connection
Twitter and Facebook helped spark interest in the offline-online data trend by partnering with DataLogix, another on-boarding firm. Like Google and AOL, the social sites want to convince advertisers that digital ads drive in-store transactions. So, both partner with DataLogix to link online ad campaigns to offline data for attribution measurement.
Usually companies want to take consumer data from in-store transactions or customer-service call interactions to the web to retain those customers, or entice them to come back and buy again after a year or two without making a purchase. Customer data can be matched to email addresses for digitized direct-mail outreach, connected to site-optimization systems to customize web pages based on offline purchases, or dumped into DSPs and ad-targeting systems to aim digital ads at customers.
"Relying purely on an online signal to inform how your marketing efforts are driving business for you is a very incomplete picture," said Bob Intarakumhang, senior manager for digital analytics at Allstate. Mr. Intarakumhang led the charge at the insurance firm to begin moving customer data to the web from Allstate's transactional, call-center and agent databases. The offline information will flow to its data management platform X+1 to optimize media buying, and help Allstate fine-tune customer-lifetime-value scores. Mr. Intarakumhang said he also plans to use the integrated data for online ad targeting, campaign measurement and site optimization.
The company is in the midst of on-boarding its data with the help of Adometry, which partners with Datalogix, LiveRamp, Acxiom, Adobe and others to gauge the impact of digital efforts on offline purchases.
"The measurement piece is really, really important. They're going from test budgets to actually moving real dollars from one bucket to another," said Chris Scoggins, senior VP-general manager of Datalogix's digital services.
Data on-boarding services are poised to grow from 22% of Adometry's business in the last two quarters of 2013 to a projected 54% this quarter, according to Natasha Moonka, product marketing manager at Adometry.
Hopes of shifting ad budgets
For a big-box retail client, Adometry worked with LiveRamp to match anonymized store loyalty data to Adometry data to measure the impact of online ads on real-world sales. One campaign report showed 14% of sales were attributable to digital ads, prompting the client to increase budget allocated to online efforts, according to Ms. Moonka.
Marketers are becoming more focused on targeting audiences and measuring campaign results in a holistic way across media, and integrating once-siloed data is key to that mission. In part, the Adometry acquisition is a bet by Google that it can steer more ad dollars online if it helps marketers reach their customers online -- and show advertisers that online marketing promotes offline sales.
"Everybody's talking about, 'How do I get my CRM data into your planning and buying tools?'" said Mindshare's Mr. Ivins.
"We had an idea that this was going to happen," said Datalogix's Mr. Scoggins regarding the popularity of moving offline data to the web. In the past three years, the number of clients using the company for offline-to-online data services has increased tenfold, he said.
LiveRamp has also seen significant signs of growth. According to information provided by the company exclusively to Advertising Age, its client list rose to 223 in 2013 from 116 the year before, representing 92% growth year-over-year. And in that time, revenue grew 143%, said the firm. LiveRamp was spun out of digital data company Rapleaf, whose data matching capabilities sparked controversy following a 2010 Wall Street Journal report highlighting the fact that the firm stored user names in its database.
With new LiveRamp clients came more data to move from offline systems into ad targeting, site optimization and email platforms. LiveRamp said it on-boarded 1.3 billion customer records to the web in March 2013, and around 3 billion in March 2014.
Put simply, companies like LiveRamp and Datalogix match offline databases to online data, often making the connection by using registration information gathered by travel, dating or news sites, or gaming system partners. They can also link cookies representing a user's visitation to a partner site to information in CRM databases. For privacy purposes, personal data is stripped once connections are made, and before data is delivered to ad targeting or site optimization systems.
There are some drawbacks, suggested Anudit Vikram, VP at data consulting and management firm Merkle, who said a 30% match rate of offline data to Internet data is actually considered "good." Companies might choose to bolster audience pools using algorithmic look-alike modeling, which finds other consumers that exhibit similar behavior to the ones in the original matched database.
The data-bridging process isn't always speedy either, though companies are improving systems to reduce wait time.