Privacy or Personalization? Why Not Both?
How Segmentation Can Solve the Marketing Conundrum
By: Melissa Chyba, Vice President Strategic Partnerships at Claritas
Russel Shultz, Senior Manager Digital Strategy at Claritas
Personal privacy is having a moment, and it’s not going away anytime soon.
From the tightening of privacy restrictions in Europe (GDPR) and California (California Consumer Privacy Act of 2018) to the shocking revelations that Cambridge Analytica was mining the personal profile information of millions of Facebook users without their consent, marketers are reckoning with a new landscape where strategies that don’t include privacy considerations are doomed to fail.
As consumer backlash unfolds and the focus increases on protecting the public’s online information, marketers must look for alternative solutions to enable the relevancy of content consumers want that is wedded to the privacy that is their right. And this is where segmentation comes in.
What is segmentation? How does it work?
To understand segmentation and why it’s the solution marketers need, you first must understand how segmentation is constructed. To start, segmentation schemas are built using a sample of people for which many of their behaviors and characteristics are already known. For example, married women 28 and older, living in the suburbs. Using surveys and trusted third-party suppliers, privacy compliant information is collected that builds out the segment profile. This includes demographics, attitudes, and offline and online behaviors including shopping preferences, financial behaviors, technology adoption and media use.
At Claritas, we build segmentation (whether syndicated/off the shelf or customized) that incorporates proprietary survey research that digs deeper into actual behaviors rather than the passive observation of digital habits. For example, our survey research incorporates question formats that help marketers understand what is going on in the consumer’s mind as they make different choices between what they buy, how they research, where they buy, and why they select one product or service over another.
Since the objective of survey data is to extrapolate findings to the rest of the population, insuring the sample size of the survey is large enough to be representative is critical. Furthermore, survey research is 100 percent opt-in and respondents are informed that their responses will be used for marketing purposes.
The Segmentation Advantage
Leveraging this data for segmentation and the development of look-alike audiences (modeled audiences) for offline or digital campaigns has distinct advantages for marketers, such as:
Privacy Safe – Only voluntarily shared data is used to create audiences/segments.
Scale Across Channels – Audiences scale up and can be applied online, offline, to radio and television.
Uncover New Opportunities – Look-alikes ensure you’re finding new people, and not just retargeting the same people continuously.
A Holistic View, Without Creepiness – A 360-degree view of an audience is possible with the many behaviors and characteristics that are available for each person or household.
The key to smarter targeting is finding relationships between the many behaviors and characteristics that define a single person (consumer) and extrapolating it across many people and households. Why is this important? Because knowing what drives consumers is an exercise in understanding their motivations, their behaviors and their characteristics. We call this the “why behind the buy,” and these insights have proven to be invaluable as drivers of actual behaviors, with the research often outperforming other market research options.
At Claritas, our segments incorporate a proprietary modeling method that looks for differences across hundreds of key demographic behaviors to create optimal groupings. From this process, we can understand current buyers and enable marketers to find more customers (like their best customers), achieving scale across all channels.
As consumers begin to exercise their personal data sovereignty, marketers will need to find ways of adjusting, while keeping their messaging relevant. Segmentation continues to be a great answer to this problem.
To learn more about Claritas segmentation and offerings, contact us and we will put you in touch with one of our segmentation and solution support experts.