Marketing 5.0

CHAPTER 8Data-Driven Marketing: Building a Data Ecosystem for Better Targeting

In 2012, an article by Charles Duhigg in The New York Times Magazine about Target predicting the pregnancy of a teenager made a headline. The father of the teen was angry to learn that his daughter had been receiving promotional coupons for baby items from the retailer. He thought that the mail was misdirected, and Target was encouraging her to get pregnant. After a conversation with her, he learned that she was indeed expecting.

A year before the event, Target had built an algorithm to predict the likelihood that a woman shopper was pregnant according to the items she bought. The retailer had assigned a unique ID to every shopper and connected it to all demographic information and the shopping history. Big data analytics had revealed a specific consumption pattern for actual pregnant women, which could be used to predict future purchases of shoppers that matched the pattern. The company had even attempted to predict the due date based on the timing of the shopping. All these efforts would be useful to determine who would get which mailed coupons and when.

The story is an excellent example of companies leveraging data ecosystems to make more informed decisions. Data-driven marketing is the first step in implementing Marketing 5.0. By having an analytics engine, brands can predict what their potential customers are more likely to buy next based on past purchases. That way, brands can send personalized ...