Tuesday 21 October 2014

Is data the death of the idea? Part 2

No, it's not. But the use of data does beg the question from Part 1: Why do you need to create a memorable idea if you can simply intercept a potential customer right at the point of purchase? 

Talking to a marketing friend, who works for  the biggest loyalty card in Australia, he says the numbers don't lie. When they send out a laser targeted offer to a customer using their data, there is unequivocally and invariably an increase in sales - measured and compared to a control group.  

But here's the rub. For a brand to have data on someone, or for that brand's data-made message to be processed by the someone, that brand has to already be in that person's repertoire. 

This means it only has the power to impact loyalty or repeat purchase (over a determined and measured period of time). Knowing that, here's how it falls down:

There are only so many times people need to buy things (The same limited amount of buying occasions from Part 1). Toothpaste is a great example. When a toothpaste brand sends me an offer for their product and I take it up at the cheaper price. They haven't increased buying occasions. They've simply brought the occasion forward. Now I have a whole tube of toothpaste sitting in my cabinet waiting for when the one I have runs out. Had they not used their data to target me, I probably would have purchased the toothpaste at the regular price and the brand would have made more money. 

Or to revisit the example from Part 1. Had the hair dye brand not sent that customer an offer, that customer, and aggregate of customers who received it, would have still purchased the brand, on aggregate, in accordance with their repertoire and the brand's market share (The duplication of purchase law). 

As you know, repeat purchase is only 1 of 2 ways to grow a brand - and the weaker. The second and more effective way is through penetration. 

To increase penetration and market share you need to reach new customers. Something data by its nature is just not good at. You can't have data on someone who doesn't have you in their repertoire, and if you do (through a 3rd party like Facebook) if you're not in their repertoire, they aren't going to notice you anyway. 

You need to reach and interrupt people who don't know your brand exists or have forgotten about you. That way when they're in a buying situation next, and your brand is readily available in their mind, they choose you over a competitor. 

And how do you interrupt and keep a brand fresh in people's mind? Wait for it... Big, smart and entertaining ideas. 

Data can even help an idea. A lot of feedback I received from Part 1 was how data has opened the door for more intelligent ideas. While this is a type of data, it's not the sort that makes CEO's pants tingle. It's not the data that threatens the existence of the idea. 

In fact, as you can see, it elevates them. The best example was given by Paul Matheson, President of Planning for Ogilvy in APAC. This Cannes Direct Grand Prix winner here: 

So, does data negate the need for an old-fashioned advertising idea? Hardly. Affecting repeat-purchase is predominately defensive. It works at holding your market share. To grow a brand, you need to achieve penetration and that means you need to reach new customers. And, thankfully, that means the big idea lives to fight another day. 

Viva la idea!

Christopher Ott