Ad Exchanger: DTC Data Isn’t Enough To Fully Inform Retail Advertising – That’s Where Loyalty Programs Come In

*Guest column by: Lauren Littlejohn, Director of Data Science, 84.51° *

“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.

As third-party data becomes scarce, established CPG brands are collecting first-party data through sweepstakes, sampling programs and direct-to-consumer (DTC) commerce. These experiments are fueling new concepts and customized products.

But these DTC programs are a long way from replacing the ways brands previously used third-party data in their digital marketing. They just don’t deliver enough scale to impact national metrics.

Instead of going all in on DTC commerce and first-party data collection, many brands, startups and well-known CPGs are missing the more effective retailer data sets at their disposal: loyalty programs.

DTC tactics and first-party data collection may miss the mark

Incremental sales are the lifeblood of CPG brand marketing. Marketers try to increase velocity in several different ways: Either get more units in a single shopping basket, drive more frequent purchases or, most importantly, add new households to the customer set.

But DTC tactics are most efficient at driving engagement with devoted fans – not new households.

And there’s another obstacle as well: Consumers are more sensitive to how data is collected and shared or used for marketing purposes. The ever-present cookie pop-up and app-tracking notification has increased awareness of where our data goes and who is using it. People need a strong reason to opt in to sharing personal information with a brand.

Brands in high-consideration categories may offer a compelling value exchange. But are consumers going to establish a direct, consent-based first-party relationship with every brand in their pantry or refrigerator? Probably not.

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