Big Tech privacy prompts companies to collect customer data

by Suzanne Veranica | Updated December 02, 2021 09:49 am EST

Marketers are conducting sweepstakes, quizzes and events to collect personal information and build detailed profiles of people

New privacy protections imposed by tech giants and governments are jeopardizing the flow of user data that companies rely on to target consumers with online ads.

As a result, companies are taking matters into their own hands. In nearly every sector, from brewers to fast-food chains to manufacturers of consumer products, marketers are rushing to collect their information on consumers, seeking to create millions of detailed customer profiles.

Collecting such data has long been a priority, but there is new urgency. Until now, most advertisers have relied heavily on data from business partners, including tech giants and ad-technology firms, to determine how to focus their ads. But all traditional tactics are under attack.

Apple Inc. made a change to its devices this year that restricts how users can be tracked. Google is planning a similar push for its popular Chrome browser. New privacy laws in California and Europe are increasing the pressure on data.

That’s why brands are deploying an array of tactics to persuade users to surrender data to the brand — loyalty programs, sweepstakes, newsletters, quizzes, polls and QR codes, those pixelated black-and-white squares that pop up during the pandemic. have become omnipresent.

Avocados From Mexico, a non-profit marketing organization that represents avocado growers and packers, is encouraging people to submit grocery receipts to earn exchangeable points for avocado-themed games.

It is also holding a contest for a chance to win a truck. To enter, consumers scan the QR code on the in-store display and enter their name, birthday, email and phone number.

“We have a limited window to find out, and everyone is scrambling,” said Ivonne Kinser, Avocado Group’s vice president of marketing. It has managed to capture about 50 million device IDs—numbers associated with mobile devices—and is working to link them to names and email addresses. The group plans to use customer information for ad targeting and to make its ads more relevant to its customers.

Creating detailed profiles of customers can be costly, as it requires sophisticated software and data science expertise. “We can do a little bit at a time, but it will take years,” said Ms. Kinsar.

Consumer packaged-goods companies, in particular, will struggle to obtain meaningful amounts of data, as many do not sell directly to their customers.

No matter how successful the brands are in these efforts, they will have a smaller amount of user data than giants like Facebook, Google, and Amazon.com Inc. Marketers will still spend huge sums of money to advertise on those platforms for the foreseeable future. But having their own robust database can help companies make their online advertising campaigns less expensive and more effective.

Miller High Life ran an online contest this summer to deliver a branded patio set. The lucky winner gets a bar, stool and neon signs. The company’s prize was the personal details of the nearly 40,000 people who signed up, including emails, birthdays and phone numbers. The reason it is asking for a birthday is to validate the age, as it is an alcohol brand.

Molson Coors Beverage Co., Miller’s parent company, said that as more people choose to be tracked by apps, having more customer data could help prevent its advertising costs from rising when it comes to social media channels. Buys digital advertising on and from online publishers using automated advertising. – Purchase system.

Molson has put in more than 300 data-collection efforts this year, including sweepstakes and contests at bars across the country. Many customers who sign up to the contest agree to allow Brewery to store their information and use it for marketing purposes.

Sofia Colucci, global vice president, said, “You might think it’s a bad thing, like, we’re trying to access people’s information, but people really have no problem sharing that information because they have to. It’s getting its benefits too.” Marketed to the Miller family of brands.

The Milwaukee-based brewer currently has more than a million customer profiles and says it expects to grow to at least 13 million by 2025.

Apple’s new privacy policy, introduced in April, requires apps to ask users if they want to be tracked. According to Flurry, a mobile-app analytics provider, US users opt out of tracking only to encounter an Apple privacy prompt 18% of the times. The result is that major apps, including Facebook, will have less data over time so brands can target ads on their platforms. Apple declined to comment.

Reaching the desired audience on Facebook is already becoming more expensive for e-commerce brands. The company, whose parent is now known as Meta Platform Inc., said Apple’s change affected its sales growth in the most recent quarter. Meta said it is working on technology to mitigate the issues.

Buying and targeting online ads has long been facilitated by cookies, small files stored in a browser that hold information about a person’s online behavior. Google, Alphabet Inc. , has said that it plans to pull the plug on third-party cookies within Chrome, in the interest of user privacy, by the end of 2023.

Google recently tested a new form of ad targeting that would let marketers direct their ads to larger groups, such as people interested in travel. In some cases, Google will let marketers use their own customer data to target individuals on Google properties like YouTube — another move that makes it important for companies to collect their own data.

Always important for marketers, developing strong relationships with customers “becomes even more important in a privacy-first world,” David Temkin, Google’s director of product management for ad privacy and trust, said in a written statement.

California’s Consumer Privacy Act and Europe’s General Data Protection Regulation both make it difficult for ed-tech firms and data brokers to collect information that brands can use, placing the onus on companies to collect data themselves .

Companies aren’t just behind a few personal details. Many people aim to log the majority of interactions they have with customers, which is called the “golden record.”

Such high-quality customer records can contain dozens, even hundreds, of data points, including the store locations people visit, the items they typically buy, how much they cost. And what do you do on the company’s website?

Such information not only helps with online-ad targeting, but also allows brands to personalize other parts of their marketing from the offers they send to the people on which products are displayed to online customers. Is.

PepsiCo Inc., which got more serious about data collection several years ago, already has about 75 million customer records and is looking to double that in two years. The data stack has helped the snack and beverage giant save tens of millions of dollars, said Shyam Venugopal, senior vice president of global media and commercial capabilities.

Several marketing executives said that buying ads on platforms like Facebook and Snap Inc. is more expensive if marketers use data from those companies. According to Mr. Venugopal, in North America, most of PepsiCo’s online advertising targeting now uses its own customer data, so costs are lower. Its campaigns are also more effective in reaching the right audience, he added.

Partly to expand its data cache, PepsiCo has launched an online store for its Mountain Dew game Fuel brand aimed at gamers. Mr Venugopal said in the first six months around 35,000 people registered and provided some personal information.

Retail, travel and hospitality companies are well positioned to capture data as they deal directly with consumers. Many such companies have long invested in loyalty programs that offer perks such as rent discounts or hotel-room upgrades, and have already built customer databases to personalize marketing.

The company said the dining chain Chillies Grill & Bar has about nine million active loyalty members, and its records contain about 50 different bits of information, including whether a person has eaten burgers, fajitas, ribs or kids’ dishes. How many times ordered certain food items like food. Chili’s also has certain emails, phone numbers and purchase history for 50 million customers who are not active loyalty members, which it can use for ad targeting.

Michael Breed, senior vice president of marketing at Brinker International-owned Chillies, said how the data helps structure the messages, ads sent to someone who frequently orders appetizers, can say, “a free app.” Come for it,” said Michael Breed. Inc. He credits the hiding of a series of customer data for helping to avoid a major fallout from the policy change made by Apple.

Some retailers saw a boom in online sales at the start of the pandemic and supercharged their data collection. “It allowed companies to learn a lot about you in a very natural way,” said Chris Chapo, former vice president of advanced analytics at marketing technology firm Emperity.

In 2020, Dick’s Sporting Goods Inc. added 8.5 million new loyalty-program members, or athletes, as it calls them. The company has over 20 million loyalty members.

Dick’s loyalty-member profile can include up to 325 data points and customer traits. These include members, whether they have children, what attracts their attention to the website, how much they have spent on Dick’s 12 months and what their “lifetime value” is – an estimate of how much they will ultimately spend at the company.

Molson began ramping up its efforts in response to European privacy laws. A pivotal moment came in 2019, when Brad Feinberg, North America’s vice president of media and consumer engagement, visited a bar in Madison, Wis., where a field marketing manager was hosting a contest. Patrons put their names in a fish bowl for a chance to win two tickets to a football game.

Mr. Feinberg asked the marketing manager what he did with the bowl of names after the contest. “I throw them in the trash,” replied the manager, according to Mr Feinberg.

He realized how much data Molson had failed to capture given the hundreds of such events held weekly. He eventually persuaded the company to invest in data collection and set data targets for each of its 80 brands. Molson said its customer-record collection has helped it save more than $300,000 on data charges when purchasing ads online this year.