Facebook and Dunnhumby, the data company owned by Tesco and behind Tesco’s Clubcard, have announced a data partnership which promises to be able to connect specific campaigns to in-store shopping behavior. Is this a major step forward to measuring true marketing effectiveness? Is the data trustworthy or valid? How should consumer marketers and shopper marketers respond?
The holy grail of marketing effectiveness
Marketers have, since marketing has existed, sought to find effective ways of measuring the effectiveness of their activity. It was after all around a hundred years ago that John Wanamaker famously opined that 50% of his advertising was wasted, but that he didn’t know which 50%. The era of digital marketing promises to make marketing effectiveness more than a pipedream, with the ability to track specific behaviors and activities. But to date there have been limited successes. Marketers have (quite rightly) been derided for measuring marketing effectiveness in terms of Facebook ‘likes’. True marketing effectiveness must include the ability to measure its impact on sales in stores, something which has eluded marketers until, apparently, now.
A step forward for marketing effectiveness
On the face of it, the deal between Facebook and Dunnhumby is a big step forward. Both companies wield huge databases (Facebook has 37 million users in the UK: Tesco has 17 million shoppers subscribed). Connecting the activities of a user on Facebook to a shopper in-store is to some extent groundbreaking. The ability to run a campaign on Facebook and see whether the individuals who interacted with that campaign behave differently in stores sounds great, doesn’t it? And there are few, if any, media companies able to offer that right now. But before we all get too excited, let’s examine the limitations and concerns associated with this.
Facebook isn’t the same as online, and online isn’t marketing
37 million users out of a total population in the UK of 63 million is pretty impressive. It’s a large sample, though of course it will be somewhat skewed. Then again, those companies advertising on Facebook will have already factored that in. But Facebook is only a slice of these people’s online existence (a large one, granted, but still). So it’s important to recognize that when analyzing marketing effectiveness, we’re missing any other activity that shoppers may have indulged in online. And beyond this, of course, there is an entire marketing mix beyond the Internet which needs to be factored in before we really reach a clear understanding of marketing effectiveness.
Cynical me – What do Facebook and Dunnhumby stand to gain?
As soon as the announcement was made, the web was awash with comments about Facebook having a vested interest in making their advertising look good. The benefits for Facebook are obvious – they are desperately trying to prove that advertising on Facebook can create real changes in sales. But Dunnhumby? Well, I guess they get kudos for setting up a partnership with Facebook, and the opportunity to sell a lot of data and analysis? What else? It took me a little while to work this on out. But first let’s take a look at the data that Dunnhumby actually gather.
Dunnhumby doesn’t cover all shoppers, or all their shopping
Dunnhumby will only track purchase behavior in Tesco, and of course that doesn’t get close to covering everything. Tesco has 17 million cardholding families, though press releases don’t suggest how frequently they are active. The fact that they represent a fraction of the total number of households isn’t an issue (they have pretty good coverage of the around 24 million UK households) but the fact that they only represent a fraction of those families’ total shopping is a limit. Most shoppers shop in many different chains (and their shopping trips are becoming more fragmented). An analysis looking at the impact of an activity in Tesco alone isn’t seeing the whole picture. A shopper may switch from one chain to another, and it would look like a sales uplift. Of course it would be an uplift for Tesco, but not necessarily for the brand. Put another way, there is a bias built into the analysis: a bias in favor of Tesco, who own Dunnhumby.
Stacking the odds in Tesco’s favor
Beyond the lack of a complete picture of a shoppers buying habits, a campaign, targeting a group of consumers/shoppers, being measured only on its impact in one chain, is more worrying. Campaigns which drive sales in other retailers would seem to be less effective than those in Tesco. It’s not a stretch to see a world where, based on this data, the campaigns that ‘work’ in Tesco will be prioritized over those that work in other chains (as the benefits there may be invisible). Maybe I’m being cynical, but it does definitely appear to be an area of concern.
Beware the myopia of marketing effectiveness
The big challenge for consumer and shopper marketers is therefore to beware myopia. The Facebook/Dunnhumby data will give a limited data set. It will be limited to the intersection of Facebook users and Tesco shoppers, and will only look at marketing activity on Facebook, and shopping activity in Tesco. As long as marketers keep that in mind, they will be fine. As a friend of mine once said: “data doesn’t lie, it’s the stories we tell with it that doâ€.
The Facebook & Dunnhumby tie up is clearly a big step forward in the long journey to true marketing effectiveness. But it is not without its limitations and concerns. They are marketing a limited dataset and both have a vested interest in demonstrating the effectiveness of Facebook advertising in influencing Tesco shoppers. Marketers should welcome the move, but treat the data with caution. It is a great move forward, but hardly a holy grail!
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