JD.com and Alibaba create indexes to identify Chinese shoppers’ spending trends, which help retailers gain insight.
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“Group shopping is a way to enable more consumers that the retailer might not be to reach otherwise to take part in a personalized offer sent to a friend,” explains Ai’s Schmelkin. “Not only does group shopping expand the reach of personalization, it is a way for retailers to move an item in higher quantities.”
By tracking consumer behavior patterns, retailers can identify products they can build incentives around to encourage customers to serve as viral marketing agents. Ai’s clients have worked with invitation-only shopping clubs, such as Gilt.com, to create viral marketing campaigns in which a current member referring a new member receives incentives on products the retailer knows she wants. The value of the incentives is based on the number of referrals made and increases as specific referral thresholds are hit.
“The strategy reaches consumers on a personal level by offering incentives on items they want, while the retailer gets to promote items they may want to clear out of inventory or that still generate a high margin even with a discount,” says Schmelkin. “Retailers need to think about new ways to use personalization strategies and technology to deliver value and differentiate their brand.”
In addition to developing personalization solutions, Ai helps retailers create social networking strategies, provides site design and rich media such as streaming video, and develops mobile commerce applications.
Although personalized ads offer retailers a more cost-effective method of driving traffic and converting consumers, they are often overlooked in favor of paid search ads, which are targeted to the consumer’s interests based on his search query.
But with the cost of pay-per-click ads on the rise, the lower cost of banner and display ads make them a more economical alternative, especially since personalized banner and display ads can generate three to five times more revenue than non-personalized display and banner ads, according to MyBuys Cell.
“Personalized display ads are a potential game changer in online advertising because it means retailers don’t have to create mass market ad campaigns,” says Cell. “The elements of personalization that retailers use on their sites to get products in front of consumers can be used in mass marketing channels.”
MyBuys works with ad networks on behalf of retailers to identify consumers that have visited the retailers’ sites and then moved on to information or entertainment sites. As a consumer arrives at these sites, MyBuys reads the tracking cookie containing the information about where the consumer has been and what she’s done, enabling the retailer to show ads to the kinds of consumers it’s targeting. MyBuys assembles the ad’s content using parameters set by the retailer, such as promoting items based on an individual’s implicit brand or category preferences and writes a headline to entice the consumer back to the retailer’s site.
A shopper that visited a ski equipment site and was looking at ski tuning equipment, such as wax and base files prior to the start of the season, might see an ad saying “Everything you need to get ready for the upcoming ski season is on sale now.” The ad might include a promotional discount on the tuning equipment, plus other accessories, such as gloves and goggles, that were not previously viewed. Ad space can be purchased and ads assembled and shown to the consumer is less than two seconds.
“Personalized display ads are a great way for retailers to remarket items to consumers they have previously viewed but did not buy, or those consumers are likely to be interested in based on their personal profiles,” says Cell. “Personalized ads show a consumer the retailer knows them in the context of his individual product preferences, not the preferences of a group of people with like attributes.”
The more you know
Because data is the driver behind any form of personalization, the more data retailers have about the products and product categories that are of interest to consumers, the better the odds of creating a personalized ad that will result in a sale.
Akamai leverages the data from the retailers participating in its ad network to gather broader data sets about consumers those retailers serve. Consumers are identified by a tracking cookie. The advantage to retailers in the network is they gain deeper insights into consumer preferences.
For example, when a consumer that has recently purchased home furnishings from retailers in the ad network visits an electronics retailer in the network, Akamai can make the connection that the consumer may be in the market for a home entertainment system because of recent furniture purchases, without having information that would personally identify the consumer.
”Anonymous consumer data from retailers across the ad network broadens the opportunities to personalize ads for every advertiser in the network. Online shopping data is the best indicator of when a consumer is in market for a particular type of product. We use this anonymous shopping data from our 550+ participating merchants in our data cooperative to help our advertising clients reach the right users at the right time,” says Matthew Karasick, senior director, product management, for Akamai.
Still, retailers are looking for ways to improve their return on investment with display advertising. Of consumers who respond to display ads, 57-84% navigate to the advertiser’s site on their own, without clicking on an ad. However, most advertisers don’t track or measure this segment of consumers according to Channel Intelligence’s Allums.
The distinctive differentiator behind Channel Intelligence’s Display Advertising Solution is its TrueTag technology. TrueTag is a proprietary and widely adopted tracking beacon that follows a consumer’s movements within a web site, as well as her actions on comparison shopping engines, e-mail campaigns, display ads and paid search ads. Channel Intelligence embeds TrueTag into each display ad placed for its clients.