We’re data geeks, and data drives most of our decisions. I think it’s safe to say that we’ve been this way since our company was founded in the early 90s. However, how we use data has changed – and will continue to change. Let’s take a look at how our company has evolved in its usage of data to make strategic advertising decisions, and where the changes in data and technology are continuing to go.
What Data Do We Have Access To?
We have vendor data – a database of thousands of media outlets (e.g. newspapers, mailers, magazines and more) with subscriber data at the ZIP Code level. We have location data – thousands of addresses and geocodes plotted on maps in our system. We have demographic data – over 185 variables of aggregated data. We have sales data – client-specific data collected at various intervals but as finite as day of week and day parting. I could keep going, but I think you get the idea.
How Is Data Used?
All of this data is used in conjunction with each other to help build optimal media buys. How we use this data to make decisions has evolved over the years. The most basic example of this can be shown by discussing Trade Areas. A trade area is the defined area around a location or destination in which that specific brand customers are located. This evolves to identifying drive time patterns, and then expanded into first and third-party data specific segmentations. Even today, the definition of trade area targets continues to evolve based on the type of industry, urbanicity of a market and the degree of competition that exists in the market.
When Should We Use 1st Party & 3rd Party Data?
We typically work with both first and third-party data to help define trade areas around designated locations. We’ll work with our clients to make ideal recommendations based on changes in sales, competition or media consumption. While past performance can be a key factor in our analysis, we believe that anything in a vacuum can be skewed. Therefore, we tend to use third-party data to confirm or contest our hypothesis. It can be a tricky perspective to balance, but we have seen proven results to attract new customer acquisition. If a client becomes too reliant on third-party data, there’s potential for straying too far away from prospecting.
In our media planning analytics, first and third-party data are our primary data sources. However, according to eMarketer and other sources, marketers are starting to rely on zero-party data. Zero-party data is data provided by the customer voluntarily. So, while first-party data might include sales being attributed to a loyalty card (happening behind the scenes), zero-party data would be a customer voluntarily filling out a survey to give you information about their spending habits, or their in-store experience. According to an article by Martech Advisor, zero-party data is the key to building relationships with customers and tailoring your advertising message based on those engagements. We can’t wait to get our hands on that type of data!
Conclusion At NSA, we believe that any data that we analyze needs to be impactful. We know that data cannot be viewed in a vacuum. It’s necessary to keep sample size in mind and develop a process to identify the outliers from the trends (we’re big fans of scatter plots). In our experience, data is the foundation and superglue when building optimal media campaigns. Shopping habits, brand loyalty, household income, sales data, or absence or presence of competition are all indicators of performance, but ultimately the data will guide the story of how-to best target and engage customers. As data transformation continues to evolve, we’ll continue to provide strategic insights to stay ahead of the curve and provide strategic integrated solutions. And while methodologies and client objectives will guide our process, data will always have its place in the beginning, middle and end of each campaign…and our hearts!