Geodemographics in a digital age

Seminar Held on afternoon of 2 May 2017
Seminar Report by David Harris

It would be natural to imagine that geodemographics has now become obsolete – in view of the big data that companies can access on individual consumer purchases, transactions and online browsing behaviour.

Yet geodemographics has adapted itself for the digital age, and is increasingly being recognised as a valuable source for online marketing, alongside its more traditional off-line applications.

This seminar explored these transformations.

Chair’s Introduction

Mike Whitelegge, head of the Big Data Solutions team within Marks & Spencer’s Information Management department, introduced the session by emphasising the depth of change that the digital economy has brought about. We have taxi firms such as Uber that do not own cars, and accommodation websites such as Airbnb that do not own rooms. Customers, meanwhile, increasingly expect messages and services to address their particular needs. Brands need to move the ‘cornershop mentality’ to work at scale, to deliver appropriate, personalised marketing, and geodemographics continues to play an important role in this process.

Use of Geodemographics in Digital Direct Marketing Campaigns, Matt Jarman, CACI

Brands can often struggle to identify important demographic attributes such as affluence, lifestage or location from their transactional data alone. Geodemographics can fill this gap, allowing more relevant messages to be communicated to the right audiences using the right channels. It provides relevance, in adding such key attributes to transactional data, and consistency, in that it can generally enhance all records to equal degree.

A comprehensive portrait of consumers requires ‘Smart Data’ that combines demographics, transactional data, and modelled behaviour and attitudes. Smart data leads to smart segmentations that reflect all of these characteristics and give a rich, detailed description of customer types and attributes. These underpin the digital creative, planning, delivery and campaign evaluation processes, and syndicate information to a high-level audience.

Please see a copy of the presentation here

Can Geodemographics save Digital?, Mark Lindsay, Experian

According to Mark Pritchard, chief brand officer of P&G, when digital analytics and marketing are used, ‘all too often the outcome has been more crappy advertising’. In a complex digital delivery chain, it may be unclear whether the right message has gone to the right person, and outcomes may not be easily measurable or attributable. Data attributes in digital, such as latitude/longitude co-ordinates may be missing or unreliable if they are present. The use of geodemographics has the potential to give consistency, to define the audience once and engage with them consistently, regardless of channel. Experian’s Ultra database, for example, attaches demographics in the digital advertising space by a range of methods, depending on the range of data already available. Consumers respond well to properly targeted adverts - channel switching during sky Adsmart commercials, for example, is 48% lower than for standard advertisements.

Please see a copy of the presentation here

How digital and omni-channel are changing customer analytics in retail, Martin Squires, Boots

Boots have a particular need to understand women, who buy 80% of toiletries. Their core tool for measuring store-based behaviour is the Advantage card, indicating when, where and how people shop, and for what. It provides a core resource for optimising complex offers across stores.

Multi-channel has made this process much more complex. The Advantage Card transaction database is now supplemented by online sources such as browsing data, reviews, social media chat etc. Some agencies have suggested that this new data makes geodemographics redundant, but this is a dangerous route because of data quality issues and possible data protection challenges. Anyway, many customers are not repeat buyers, and do not generate enough transactional data for a reliable portrait to be determined. Open data and geodemographics can provide information on affluence and location that may not be otherwise obtainable, and new open data sources on health and other topics are appearing. Geodemographics has the potential to broaden and deepen the insight given by transactional data, and may be the only reliable source for new and infrequent customers.

Please see a copy of the presentation here.

Geodemographics goes mobile, Peter Furness, Peter Furness Limited

A wide range of technologies for locating customers have developed over the past few years. GPS allows authorised apps to record a mobile phone location when outdoors, while Wifi and Bluetooth signals allow its position to be tracked in detail, indoors, without the owner’s authorisation. Tilt and acceleration sensors in phones have been shown to allow apps to identify what a user is typing.

Other ‘surveillance’ methods, such as CCTV, ANPR, satellite imagery, drones and data mining of social network communications allow further scope for information-gathering on individuals.

These technologies have their benefits, such as usage-based motor insurance, and the forthcoming devices that allow cars to call emergency services immediately they crash. Health tracking devices such as Fitbit could be integrated into public health planning, but make available rich sensitive personal data to the data controller. RFID tags and similar technologies potentially allow real-time tracking of huge numbers of inanimate objects, and the ‘Internet of Things’ may lead to rich data collection relating to the operation of each household.

The likely future is one of rapid evolution in these areas and emergence of new players. One challenge is whether data protection legislation can ever keep pace with these developments.

Please see a copy of the presentation here.

Data Protection, Michelle Goddard, MRS 

The new European data protection legislation (GDPR) will be complemented by a new ePrivacy directive within the next few years. Much of GDPR is based on current law, but it tightens restrictions on consent, gives a wider definition of personal data, and gives data subjects wider rights within shorter timeframes. The GDPR environment is as yet uncertain, with advice now appearing from different bodies rapidly, and not always consistently. Further uncertainty arises from the Brexit process, which raises the possibility of future UK changes to the legislation.

The forthcoming ePrivacy directive is even less certain, but may change the use of cookies, pop ups and browser defaults, and impact on how analytics cookies may be used for location tracking. Geodemographics has clear benefits, such as providing better insights and effective targeting, but also carries legal risks under the new legislation.

Please see a copy of the presentation here.

Ethical Considerations, Steve Ginnis, Ipsos Mori

Ipsos/MORI have researched the public understanding of data analytics in detail, and found there is little public awareness or desire for, say, social media analytics. There are mixed views on whether, for example, automatic inference is acceptable, but support increases the more that possible applications and possible public benefits are understood.

If companies wish to operate within the bound of what data subjects expect to be done with their data, they should follow principles such as minimising the range of data collected, and conducting regular ethics reviews. Use of geodemographics should be in line with public expectations, in terms of data collection, decision making, and the impacts of decisions.