Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
There is no point retaining data unless your organisation has the ability to commercialise it, the digital head of FMCG goliath, Reckitt Benckiser, claims.
Speaking during a breakout session at the recent Data Strategy Symposium, head of digital at the company, Andrew Wong, said data is highly important to the future success of brands, but admitted knowing what to do with the wealth of information available today is a huge problem.
The company has been working to define and centralise its big data efforts, as well as put the cultural and operational processes in place, to better utilise data to grow revenue and profit margins through more intelligent customer targeting.
“If you can’t use it [data], it’s just taking up space and will cost you money,” Wong said. “At the end of the day with data and digital, it’s a race for innovation. We are trying to move as a business from mass media models and passive consumers, to a faster-paced world of targeted media and active consumers.”
In his presentation, Wong detailed the challenges the FMCG sector has faced actioning data to drive consumer insight and growth. He then outlined steps being taken to commercialise data at Reckitt, with a focus on better targeting media spend.
“We don’t collect the data for the sake of it; we start by asking what the business will achieve, then go looking for the data,” he commented.
Wong pointed out most of the discussion about data today is on the digital aspect, yet conversions for FMCG brands occur through a partner/retailer and in the physical environment. Defining the target customer of its brands, which include Dettol, Nurofen or Finish, using demographic segmentation or purchase data isn’t clear cut either.
“The reality is everyone gets a headache, has a shower, or has dishes to wash,” Wong said. “Three guys could look exactly the same demographically but won’t use the same soap. And the reason they use a different soap is going to come from 65 different places. So behavioural and purchase data only tells you so much.”
Scalability is another key issue, and Wong said Reckitt is spending the next 12-24 months working out what the ideal ratio between activities and the number of consumers targeted is, in order to ensure programs are worthwhile.
“FMCG doesn’t have a high lifetime [customer] value, so we can’t afford one-to-one engagement,” Wong said. “Yes, you can use your data to get very specific, but that’s often not scalable. We talk about one-to-one communication, but in reality there may only be 7000 people in a segment, and if we sell them a $3 product, it’s probably going to cost us more to get the data.”
Improving media buying
Where Wong is placing a big emphasis is on utilising data in Reckitt’s media spend and targeting. He claimed success comes down to uniting five key areas: Data factors, purchasing segments, media behaviours, distribution channels, and creative.
For example, given the seasonality of many of its products and its marketing activities, Reckitt is looking to data to help better inform decisions on when to go to market, and vary media spend. This could be by looking at ‘cause-based segments’ and contributing factors to a purchase happening, such as a consumer’s location, loyalty program or needs, Wong said.
In addition, Reckitt needs to layer in anonymised audience data to define where consumers buy, what they buy, why and where in order to determine the frequency and messaging needed when communicating with a customer, he said.
“FMCG must also move away from demographic segmentation – it doesn’t tell me if he or she will use my soap or not. We need to layer the purchase and media data over each other,” Wong claimed.
Also important is looking at the whole customer journey, as well as the types of content best suited to address a consumer based on this data discovery, such as promotions in-store or product messages.
“Independently, every single one of these activities is already being done in your business,” Wong told attendees. “The thing that has not been done traditionally is layering these together. What we’re trying to do is start making better decisions on where and how to put information out there. The data tells us this.”
Ultimately, better targeting consumers will help brands drive more accurate promotions and a more direct response style of advertising, Wong said, saving Reckitt money through more optimised media spend.
Better data insight also opens up the ability to bring more buyers into these categories, he said.
“The game here is to both increase the basket size and get more people in the category, as well as get people to trade up and buy more expensive products,” Wong said. “The problem is we [FMCG brands] should be looking for new and more users, but traditionally it’s a fight between brands in that category to steal and protect marketshare. Over time, that doesn’t help anyone because you’re sitting in a battleground, fighting for the same consumers.
“What we need to do is identify how to grow the category and get more people with headaches to use pain killers, for example. That’s where the data and information becomes important.”
More from Data Strategy Symposium 2014
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- Don't use data as a crutch, says FT's head of analytics
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