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You are what you buy

The scanning of a credit card at a terminal outputs a paper dolls receipt.

Illustration by Dave Cole / Getty / The Current

As a marketer, the best way to maximize the return on investment of your media spending is to truly understand consumer behavior. And the best way to attain that understanding is with real purchase data, because what people buy is the best reflection of the things they truly like, use, and do. Other substitutes are often pale proxies that present a highly edited version of a consumer’s everyday life, which can even mislead away from the accurate consumer insights you need.

Take social media. In reality, the Instagram-perfect lives that people share on their profiles are often far from precise representations of their actual purchasing behaviors. Even when they’re not posting highly curated updates of their dream beach vacations, people typically aren’t sharing a lot of posts on their use of everyday staple products such as condiments, toothpaste, underwear, and over-the-counter medications.

Consumer surveys, while valuable, often likewise fall short as a barometer of purchase behavior. If you ask people if they eat healthy or make healthy meals for their children, for example, the response is often yes, regardless of the truth, and that’s before we even get into the imperfection of memory itself. Circana research shows that consumers’ claimed purchases are inaccurate as much as 40 percent of the time.

As marketers fret about the pending disappearance of third-party cookies, it’s important to acknowledge that they too have been far from perfect guides to consumer buying. Online behavior doesn’t even hint at purchase behavior in many categories, especially those still dominated by brick-and-mortar retail. Few head to Ruffles.com for a little internet research before they buy potato chips. On other occasions, people spend time visiting brand sites with zero purchase intent. Many Ferrari.com visitors might just be fans of beautiful high-performance vehicles with neither the means nor the plan to spend more than $250,000 on a sports car. Relying too heavily on data like this in marketing can result in far too many wasted impressions.

Purchase-based data is paramount

In today’s privacy-sensitive environment, real purchase data is more important than ever for learning who a consumer really is, what they buy, and what they care about. Purchase-based data from retailers and the consumer are both important for constructing the most complete consumer view possible. Loyalty card data from retailers can be considered the pinnacle of privacy-conscious, insight-rich data. It’s passively collected with consumer consent and gives you detailed knowledge of the entire basket for every purchase occasion.

But this data isn’t available everywhere. You can’t get it from retailers that focus on everyday low pricing instead of loyalty programs, or from millions of small direct-to-consumer manufacturers. To get these supplementary insights into harder-to-measure retailers and categories, consumer data collected through panels or receipt apps is critical.

"Only purchase data can provide the most accurate picture of what consumers are actually doing to enable the most effective targeting and measurement."

Privacy-safe usage of consumer data for ad targeting and segmentation

Once this purchase data is sourced from both retailers and consumers in a privacy-safe way, it must also be made available for use throughout the advertising ecosystem. This data can be used — also without compromising consumer privacy — to improve both audience targeting and the measurement of ad campaign effectiveness.

Using purchase data, every brand can better target their ads to the people they care about the most. Even if you’re in a product category that’s consumed by everybody, targeting still matters. That’s because the optimal message for your loyal brand buyers is very different from the distinct messages that will resonate best with new consumers, brand switchers, and lapsed consumers.

Measurement matters too

Once you’ve targeted the right audiences, measuring the effectiveness of every message matters. Your target consumer is a TV watcher, a mobile phone user, a reader, a driver who sees billboards, and a social media user too. So it’s important to measure what works and what doesn’t, everywhere and every time. And you can only truly do that by measuring the impact your media has on sales — not by using some other imperfect proxy for consumer purchases.

Purchase data can also be used to measure campaigns in-flight, allowing you to optimize your tactics and reallocate media dollars mid-campaign more effectively. By measuring sales lift, you can understand which campaign elements were effective in driving incremental sales. You can also measure the touchpoints in the consumer journey that led to the purchase to identify the sequence of touchpoints that produces the best results. And you can use data to optimize ROI across your total marketing budget by optimizing your spending by channel, tactic, creative, and audience.

A better way forward

With the anticipated disappearance of third-party cookies, we will soon enter a new, more privacy-focused marketing landscape. The advertisers who continue to rely on them will soon experience a bad case of signal loss in understanding consumer behavior. But that signal loss will be completely blunted for advertisers who are already doing their jobs correctly.

Only purchase data can provide the most accurate picture of what consumers are actually doing to enable the most effective targeting and measurement. An approach built on a foundation of purchase data can boost ROI and enables you to do more with less. You’ll likely reach more of the right consumers for fewer wasted impressions and can measure those efforts with greater accuracy. In the process, this approach can help you build stronger, deeper relationships with consumers that evolve to brand loyalty over time.


This op-ed represents the views and opinions of the author and not of The Current, a division of The Trade Desk, or The Trade Desk. The appearance of the op-ed on The Current does not constitute an endorsement by The Current or The Trade Desk.