Microtargeting: Great for Obama and Romney, but Good for Consumers?

The Challenge: In the Presidential race, both candidates are sending out highly personalized e-mails to voters, using microtargeting to address individual interests. But what privacy issues does this raise for consumers?

In a recent study, the Interactive Advertising Bureau stated that the use of microtargeting allows marketers to finally "reach out to prospective [customers] with messaging that addresses each person's specific interests and causes."

With the integration of digital political advertising into political campaigns, it's evident that increasingly accurate microtargeting of messages is being integrated into all levels of the marketing spectrum. Microtargeting makes use of online and offline data to find appropriate targets and generate models to further refine the message. But the sensitive data that makes microtargeting effective is also a cause for alarm among consumer advocates.

As seen with Facebook in our previous article, data is gathered through trackers on websites that consumers visit, and then routed through the databases of the trackers' respective companies. The inherent danger is that marketers or third-party trackers might use voter data for purposes the public never thought of, such as preventing someone from getting a job based on their past political affiliations.

And while microtargeting provides an unprecedented level of personalization for marketers, many consumers do not realize the implications that microtargeting has on their individual privacy. Christopher Calabrese of the ACLU (American Civil Liberties Union) says "Individual[s]…may not be aware that the message they are getting is based on information that has been gleaned about their activities around the Web and is precisely targeted to them."

Key Takeaways for Marketers

1. Create a Reciprocity of Value Equation, (as mentioned in our previous article).
As we've stated previously, consumers are willing to opt-in to share increasingly detailed personal preference information in exchange for marketer's promises to deliver relevant information and offers. If marketers want consumer's trust, they must show good faith by proving them with the choice to opt-in.

2. Establish safeguards to protect personal information.
Marketers must earn the trust that comes with the information they collect about consumers. Clearly communicate which tracking companies appear on your sites, and ensure that each company understands the privacy policies regarding the data that they gather.

3. Consumers should have the ability to opt-out.
As mentioned in our previous article on Google Remarketing, "what some will regard as highly relevant ads, others will see as invasions of their privacy." That's why those marketers using microtargeting as part of their campaigns should take care to be proactive about making the opt-out process easy to perform and understand.

SoLoMo Marketers and Multichannel Mix

The Challenge: SoLoMo(Social, Local, Mobile) marketing presents marketers with a chance to reach consumers when they want, where they want, and in the format they prefer. But with so many different elements, can marketers coordinate them properly?

SoLoMo marketing represents a powerful opportunity in the field of social commerce, allowing marketers to better serve today's multi-channel, multi-experience consumer. But with so many moving parts, getting all three areas to coordinate seamlessly can be difficult, especially as mobile marketing technology continues to evolve.

Russ Whitman, chief strategy officer at Ratio Interactive, says "many brands have challenges across all [channels] individually and definitely as an integrated approach...The biggest challenge...is that it's difficult to determine best practices and how to measure results."

When combined, social, local, and mobile channels are incredibly effective at driving customer engagement. But in order to fully take advantage of ever-changing technology, marketers will have to dedicate themselves equally across all channels and ensure a solid multi-channel approach. Wilson Kerr, VP of business development and sales at Unbound Commerce says “retailers and brands should start by asking themselves what their landing zone looks like for the mobile consumers they engage via SoLoMo…there are any number of exciting ways to target by location, engage via social and use mobile to deliver messaging at the exact time and place when consumers are most likely to act.”

L'Oreal is one of the companies that has had some success in gaining local ground with consumers, but like many other SoLoMo users, doesn’t believe that it has perfected its multichannel marketing mix. Beauty products tend to be a very personal purchase, and are often selected based on recommendations from friends or stylists.

With this in mind, L'Oreal created a social and local platform that, according to L'Oreal VP Rachel Weiss, “allows [individual] salons to be marketers with the help and overview of L'Oreal...we want to do real-time marketing so when someone’s...making a purchase decision we can provide an offer to tell them where [a salon] is.”

Unfortunately, L'Oreal suffers from one of the greatest challenges for marketers trying to run integrated SoLoMo campaigns: determining how to transition from strong offerings in one or two channels to seamless integration of all three.

Key Takeaways

1. Accommodate customers' existing shopping behavior.
The key to any good multichannel campaign is convenience, which means integrating your message into your customers' lives at the place, time, and manner that they prefer.

2. Simplify your messaging.
Again, simple, no-nonsense messaging makes it easier for consumers to make choices, which allows them to more easily traverse the purchase path without being overwhelmed by information.

3. Spread your efforts equally across all channels.
The strength of a SoLoMo approach depends on giving equal credence to each channel, and using the synergy of the three channels to deliver a highly concentrated level of engagement and convenience.

Starbucks: Using Online to Enhance Bricks and Mortar

The Challenge: As e-commerce grows in popularity, brick-and-mortar retailers are finding themselves losing more and more sales to online outlets like Amazon.com. But how are some of the most successful brick-and-mortar retailers holding their own against online retail?

According to STORES’ list of the largest U.S.-based retailers, Amazon.com has outperformed most brick-and-mortar retailers to rank 15th in the nation, establishing itself as America’s fastest-growing retailer. Like many successful online retailers, the website achieved success via competitive prices, fast shipping, and personalized offers that leverage a considerable customer database. So how are brick-and-mortar retailers fighting back? By using technology to upgrade customer service and create the same convenience in-store.

Mobile point of service

Retailers are equipping sales forces with smartphones and apps that allow them to reprice items, check inventory for customers, and conduct sales transactions on the spot. This spells a potential increase in employee efficiency and customer convenience at every point of contact. Lowe’s, in particular, has taken this method to heart, distributing iPhones to all 42,000 of its employees,

Precision Retailing

Precision Retailing is a customer service solution created by SAP that anticipates customers’ wants and gives them personalized discounts and offers at the appropriate time. This is accomplished by gathering multi-channel customer data and applying a system of predictive analytics. The technology allows stores to personalize shopping for customers in-store by sending mobile coupons and suggestions to their smartphones as they shop, and rewards customer loyalty by offering discounts based on their most frequent purchases.

Mobile Payments

Starbucks is a mobile payment pioneer, with over 70 million mobile payments made through their app since January 2011. But in addition to the existing Starbucks-exclusive payment app, Starbucks is expanding to support the multi-business Square Wallet app. The Wallet will allow customers to use the Square directory to find Starbucks locations, and will eventually add the ability to tip via smartphone, which will allow Starbucks and other businesses to measure customer satisfaction in real-time.

Key Takeaways

1. Customer service is key
Customers buy from online outlets because it’s often more convenient than dealing with their offline equivalents. Information is easier to come by, product comparison is simpler, and transactions are easier to conduct. The businesses above have shown that if you can streamline those processes offline, you can be competitive with online outlets.

2. Upgrade your sales process.
Regardless of how good an employee is, they can’t be everywhere at once. Arm them with the technology they’ll need to do their jobs to the best of their ability. The more efficiently they can accomplish their tasks, the better they can help your customers at each touchpoint on the purchase path.