Best practices to optimize CPG digital targeting

Digital targeting has evolved That was then Until recently, digital marketing tactics have largely focused on scale and placement: advertisers served content to as many people as possible at a time, and delivered one message to all audiences in a given campaign. Not surprisingly, this shotgun approach consistently missed its mark, as single-message campaigns lacked relevance for the majority of consumers targeted and did little to convert prospects to purchasers. this is Datalogix Smart marketers understand that it takes more than a wide reach and great creative to deepen the level of audience engagement in online campaigns. That s why today, more than half of the world s leading brands partner with Datalogix (DLX) to optimize digital targeting. At DLX, we take time to understand a brand s unique challenges, create custom solutions and measure what matters. Our partners turn to us for pinpointtargeted campaigns served up across any marketing channel, all backed by the richest source of data assets, expertise and proprietary methodologies available in the digital adspace. Let us walk you through how you can drive more in-store sales by integrating our proven best practice strategies into your next campaign. 2

Best practices for optimizing CPG digital targeting 4

Best Practice 1 Leverage the right data at scale CPG marketers have traditionally relied on four options for online targeting: 1. Demographic models based on profiles of websites audiences 2. Look-a-like models built from tiny samplings of brand users with limited purchasing history 3. Behavioral models based on browsing or click behaviors 4. Geographic targeting based on IP addresses DLX shopper-based targeting is simply more effective. We know the best way to predict what a consumer will purchase next is to look at what they ve purchased in the past. Targeting known buyers at scale is a win-win for your prospects and your brand. This way, only the most relevant audiences are served your ads, and you can be as innovative as you like with your marketing messages, then deliver ads with zero waste. Every day, we re helping leading brands reach out to must-have consumers with pinpoint precision never before possible. The DLX database of longitudinal purchasing behavior data consists of millions of known buyers across all major retail channels. It s sourced from major loyalty card programs and traceable tender databases, making it the richest source of consumer purchase data available in the digital ad ecosphere today. This dataset is continuously growing and serves as the foundation for all the audiences we build. DATALOGIX IN ACTION How starting with the right data at scale reduces inefficiencies and drives engagement. A DLX CPG client used an independent 3 rd party to test the sales impact of geo-targeting against the DLX 1:1 purchase-based targeting approach. DLX targeting generated an 11.6x greater return. THE DLX EFFECT 11.6x greater return 5

Best Practice 2 Convert offline data into online target audiences It s a key message that bears repeating: Past purchases are the most accurate predictors of future purchase behavior. DLX pioneered the ability to locate and reach offline buyers online. Connecting brands to their known buyers provides DLX CPG marketing partners a 1:1 marketing capability that shifts the focus from reach to personalization. And that means no more wasted dollars spent reaching the wrong audiences...no more millions of wasted impressions reaching clickers who do not buy. DATALOGIX IN ACTION How converting offline data into online audiences reduces acquisition costs. A major club store historically used direct mail only to acquire members. The tactic was accurate, but it came with a high cost. DLX converted the client s mail files to a digital audience and then served those prospects online ads. The result: a 15% lift in sales of new memberships of those who received the advertising vs. direct mail alone. THE DLX EFFECT 15% lift in sales 6

Best Practice 3 Use segmentation to personalize your message The concept of optimizing messages for purchasebased segments, although a mature practice in the world of direct mail, could not be achieved in online advertising until now. Custom-built DLX audiences allow you to target a wide variety of potential buyers, including: Consumers who purchase similar brands to your brand Consumers who actively purchase within your new-product category Consumers who have purchased your new product or brand Differentiating messages based on known purchase behavior makes for more effective and efficient campaigns. Let s say you re launching a line extension. You ll improve your campaign results when you create distinct marketing messages and product offers tailored to what will best motivate your prospect groups. DATALOGIX IN ACTION How distinct messaging broadens campaign reach with unique ads that sell. A cosmetics brand needed to create high awareness and drive trial of a new product line on a limited budget. DLX built custom audience segments including their brand s most loyal buyers plus heavy buyers of other cosmetics. The client then tailored its ads giving the category buyers a coupon to drive trial and existing buyers a bonus offer. The results? Heavy buyers showed an 8:1 ROI and category buyers a 4:1 ROI. THE DLX EFFECT 8:1 ROI 7

Best Practice 4 Measure what matters Measuring campaigns back to purchase behavior at scale allows brands to drive marketing investment decisions from a ROI perspective. Total media spend can be prioritized from the top down so that a small, high-quality audience receives impressions with the highest bid prices, and exposure is increasingly limited as audience quality drops. DLX delivers greater accuracy and deeper insights because of the unprecedented scale at which we measure. To understand which tactics are actually driving incremental sales, brands must measure ROI across all digital vehicles paid, owned and earned then learn what factors contribute to the results. Which creative is working? What is the optimal frequency of exposure? How do my social ads perform vs. video ads vs. display ads? The key benefit to this approach is the deep granularity of insights gained. Over time, campaign KPIs can be connected to sales by audience to optimize marketing strategies at a campaign level, at a brand level and across all channels. DATALOGIX IN ACTION Why right data at scale delivers better accuracy than panel-based audiences. DLX builds every audience with millions of known purchasers, as compared with conventional solutions that start with only a few thousand at most. And with more verified purchasers, there is a much higher degree of accuracy in targeting and results. THE DLX EFFECT 2,000,000 vs. 5,000 observed buyers measured 8

Best Practice 5 Optimize based on results Having a tight set of useful KPIs creates the foundation for a campaign performance database that can then inform smarter programs in this fast-changing consumer landscape. Key indicators may include: Media exposure/frequency/impact Campaign length Offer impact Targeting impact Purchasing behaviors Demographic variables DATALOGIX IN ACTION Why optimizing to the right metrics is key to long-term campaign success. Clicks vs. sales when given a choice, which do you optimize to? DLX has shown major brands how optimizing to clicks typically optimizes away from customers. A recent test showed 14x higher conversion rates for DLX purchasebased targeting versus click-optimized behavioral targeting. THE DLX EFFECT 14x higher conversion rate To measure the impact of different variables against KPIs, DLX recommends starting out simple: First, establish benchmarks and set up a robust framework. For example, your brand might begin with two audience segments containing simple metrics such as ROI and/or a brand study. Then, add these next steps one at a time, tacking on more audience populations, optimizing media, and varying offers for each audience. 9

The DLX effect: More accurate, accountable advertising Leading CPG marketers choose DLX because they know that with our tools, techniques and expertise on their side, they can reach out with precision to the consumers they most want to win over. With DLX, they get the built-in ability to accurately measure online efforts back to offline results at scale, track ROI in individual campaigns, then optimize future campaigns based on actual sales results. How can we help your brand reach out, connect and grow? The best practices we ve shared here offer real-life examples of how the fastest-growing CPG brands are connecting with buyers online with DLX. Tell us what your brand s biggest challenges are. Our proprietary CPG dataset includes: 70+ M purchasing households 50+ retailers Total U.S. - national coverage Total store - 7,000+ brands & 300+ categories At DLX, we have the tools. The technology. The know-how. See for yourself how partnering with our CPG team can help you uncover solutions that deliver long-lasting results for your brand. 11