Improving ROAS with Zero-Party Data in Commerce (using TIKI!)
Improving ROAS with Zero-Party Data in Commerce (using TIKI!)
Improve attribution, build trust and loyalty, and spend your marketing dollars with confidence
ROAS! How do we know if our advertising campaigns are effective? There’s a million was to slice a pineapple, but improving ROAS (return on ad spend) is a staple KPI in the world of advertising. How much revenue is generated for each dollar spent on advertising, be it high level or individual campaigns? Seems simple enough. But it can be a tricky metric to track and an even tricker one to improve. You know what they say…if you can’t track it you can’t improve upon it. They do say that, right?
Anyway, I hope this doesn’t seem out of left field coming from us at TIKI, but data is at the core of both tracking and improving ROAS. And that’s what we’re going to talk about. Accurate data is required to measure ROAS, and quality data is needed to set up and optimize ad campaigns in the first place. Without good data, your reporting could end up looking like a Salvador Dali painting. It sort of looks real…there’s certainly some real elements included…but it’s not an accurate representation of reality. And here at TIKI, we’re in the business of reality.
The Role of Good Data in ROAS
First and foremost, good data enables accurate measurement and attribution of your ad campaigns. It allows you to track which ads are hitting the mark and which ones need improvement. This information empowers you to make informed decisions and optimize your strategies accordingly. Think of it as having a reliable advisor who points out the winners and highlights areas for growth.
Moreover, good data empowers you to serve up high-performing ads that resonate with your target audience. By understanding their preferences and needs, you can create compelling ads that capture their attention. It's like speaking their language and addressing their pain points directly. This personalized approach increases the chances of driving conversions and achieving your desired outcomes.
But that's not all! Good data also facilitates continuous refinement and improvement of your ad strategies. By analyzing patterns and trends, you gain valuable insights into what works and what doesn't. It's like having a compass that guides you towards the most effective advertising tactics. With each optimization, you get closer to maximizing your ROI and outshining your competitors.
Not So Fast…The State of Data in Marketing and Advertising
The world is changing fast. Privacy initiatives have thrown a wrench in to the methodologies of old. But making room for the new is proving to be a difficult task. 85% of marketers say that their marketing efforts are reliant on third-party cookies to some degree (Hubspot).
With Apple’s App Tracking Transparency (ATT), Google’s upcoming phase-out of third-party cookies, GDPR and other similar laws and regulations, having that much of a reliance on third-party data isn’t in line with the trends of our digital world.
So, if third-party cookies are being phased out and marketers say they are dependent on them, that means marketers have given up on third-party cookies, right? If you answered no, congratulations, you’re correct! Well, 77% of marketers say they’re prepared to lose access to third-party cookies as opposed to the 15% who aren’t prepared (what have you been doing for the past 4 years, 15%?!), but until they actually bite the dust, third-party cookies are still in season, at least for now.
If you want proof, try visiting pretty much any website. Chances are you’re going to be greeted with a cookie banner with the same immediacy as a mosquito to your face when the summer campfire starts to dwindle. We’ve already covered an alternative way to capture third-party cookies while they’re still available in a previous blog (this phase-out feels like the longest drawn-out tease since Dr. Dre’s Detox. And that never even came out after eleven years, so…), but really what this all breaks down to is that marketers are dependent on accurate customer data to run effective campaigns, and therefore to improve their ROAS.
Measurement, Attribution, and Optimization Challenges
Want to measure the performance of your ads? Of course you do. If only it were as easy as it sounds. The digital landscape is complicated. There’s less and less investment in martech, campaign metrics are often misaligned, but most importantly to us, audience data is often incomplete.
23% of marketers strongly agree they have the audience data they need to support their media efforts. That makes sense when considering 61% of CMOs reported a lack of capabilities to deliver on their strategies. Combine these, and 71% of CMOs know they need to make large-scale changes to achieve long-term goals.
With privacy initiatives altering the landscape, advertisers are facing a scarcity of actionable data for measurement and attribution. The days of relying on comprehensive user profiles are fading away, leaving marketers with a fragmented view of their audiences. Again, think of the Salvador Dali painting. It’s an apt comparison. Trust us.
The reduced availability of data presents a significant challenge for accurate attribution. Incomplete data prevents advertisers from gaining a holistic understanding of their customers' journey across various touchpoints. Attribution models that were once relied upon are now rendered less effective, as the missing pieces of the puzzle lead to gaps in the attribution process. Simply put, you can’t really track people across the web anymore. It’s harder to figure out where they came from, what they were doing prior to a purchase, and to drop in cross-platform ads based on the stuff they’ve been viewing on your site.
Thus, the impact of privacy changes and incomplete data on ROAS measurement and optimization cannot be overlooked. Without a comprehensive view of user behavior and interactions, advertisers struggle to accurately attribute conversions to specific marketing efforts. This ambiguity makes it difficult to identify which channels, campaigns, or creative variations are truly driving results and maximizing ROAS. Fortunately, we’ve got a solid solution. It’s gonna sound crazy, but bear with me: get the right data from your users by straight up asking them.
Enter Zero Party Data
Zero party data, willingly provided by customers, has emerged as a game-changer in the privacy-conscious era. It refers to data that individuals explicitly share with brands, such as preferences, intentions, and interests. By harnessing this direct, transparent, and first-hand information, advertisers can gain a more comprehensive understanding of their audience and improve measurement accuracy.
The use of zero party data offers a compelling solution to the measurement and attribution challenges faced by advertisers. By directly collecting data from customers through surveys, quizzes, preference centers, and interactive experiences, marketers can capture valuable insights and bridge the gaps left by incomplete data. This enables a more precise understanding of the customer journey and the impact of specific campaigns on ROAS.
Here at TIKI, we provide a route to zero-party data that comes in the form of reward programs. After all, 85% of consumers would trade data for a discount or coupon from their favorite brands. Incentivize your customers with customized offers, and receive the data you want and need. America runs on Dunkin’ but ROAS runs on good data. Maybe we should pay someone on Fiverr to get us a logo with that phrase.
Zero-Party Data Impact
Personalization and Segmentation
Zero party data acts as a catalyst for personalized marketing. With access to customers' preferences and intentions, advertisers can create tailored experiences and deliver highly relevant ad content. By leveraging this data, marketers can segment their audience more effectively, ensuring that their campaigns reach the right people at the right time. This extends into efforts such as keyword refinement, optimizing ads for each device, improving the quality of content and landing pages, and supporting the iteration of advertisements (figuring out what works and what doesn’t) with quality data direct from the consumer.
This level of personalization enhances engagement, conversions, and ultimately, ROAS. The more complete the picture of the consumer, the better a business can optimize the customer journey from touchpoint to touchpoint and streamline the process to reduce things like empty carts and drive CRO (conversion rate optimization). All these elements come into play when it comes to ROAS.
Building Trust and Loyalty
When advertisers transparently request zero party data, it fosters trust and strengthens the bond between brands and customers. By empowering individuals to have control over the data they share, marketers can establish a sense of respect and privacy-consciousness.
By clearly communicating the purpose and benefits of data collection, individuals are more likely to feel comfortable sharing their information. This transparency cultivates a sense of trust, demonstrating that brands value customers' privacy and respect their choices. This foundation of trust lays the groundwork for long-term loyalty and engagement.
In an era where data privacy breaches and concerns are prevalent, building trust has become a competitive advantage for brands. By adopting a transparent and privacy-conscious approach to data collection, advertisers can differentiate themselves from competitors. Customers are more likely to choose and remain loyal to brands they trust, leading to increased customer lifetime value and ultimately improving ROAS.
Key Stats:
81% of consumers believe they have very little or no control over data collected by businesses (Pew)
56% of users rate online privacy as “extremely important” (BlockThrough)
92% of consumers appreciate when businesses give them control over data collection (SalesForce)
83% are willing to share data for more personalized experiences (Accenture)
33% of customers will leave if the brand lacks personalization (Nextiva)
79% of B2C leaders believe customers trust them---only 52% actually do (Twilio)
46% of consumers would pay more from brands they trust (Salsify)
Case Study
Allbirds & TIKI: Revolutionizing Data Collection with Custom Coupons for Unmatched ROAS
Client: Allbirds
Data Strategy: TIKI's Reward Program and Immutable Real-Time Contracts
(Disclaimer: We didn’t actually work with Allbirds, but we’d like to! This is a mock study. They were just really effective with ads back in the day, but even good things can be improved upon!)
Intro
Get ready to dive into the extraordinary success story of Allbirds and TIKI. In a privacy-centric era where customers crave both privacy and personalization, they found a remarkable solution that revolutionized data collection: custom coupons. By ingeniously utilizing custom coupons as a catalyst for data acquisition, Allbirds not only ensured accurate insights but also optimized their returns on ad spend (ROAS) with highly targeted campaigns.
Challenge
Allbirds faced a dual challenge: satisfying customer demands for privacy and personalization while driving profitability in a privacy-centric landscape. With customers valuing their privacy and seeking personalized experiences, Allbirds needed an innovative solution that would respect privacy, foster trust, and deliver tailor-made campaigns that resonate with customers to give them a competitive advantage and cement them as leaders in privacy-centric marketing and advertising.
Solution
Empowering Customers with Custom Coupons:
Recognizing the importance of privacy, personalization, and trust, Allbirds and TIKI introduced a state-of-the-art reward program featuring custom coupons. These coupons became the cornerstone of their data collection strategy, allowing customers to willingly share their data in exchange for exclusive discounts. Allbirds openly communicated with their customers about the purpose of data collection, assuring them that their information would enable more personalized experiences. This approach fostered a sense of trust and transparency and built the advocacy of their “Flock.”
Directly on the Allbirds site, and within their mobile application, Allbirds could create custom offers to their users. Keeping in mind 85% of customers would exchange data for a discount, and through the negotiation en masse with users, Allbirds was able to calculate coupon amounts that were well-received by customers and which cost offset their ad spend, leading to increased ROAS.
Results
Enhanced Marketing Mix Modeling (MMM)
With the precise data collected through custom coupons, Allbirds gained deeper insights into the effectiveness of their marketing efforts. They analyzed data points such as customers' advertising IDs, in-app behavior, and survey responses. This allowed them to refine their marketing mix, optimize budget allocation, and make data-driven decisions that maximized their ROAS. No more shooting in the dark - they had accurate insights guiding their strategies.
Improved Attribution Modeling
The zero-party data acquired through custom coupons provided Allbirds with accurate information about customer touchpoints and interactions. With the right zero-party data, they could attribute revenue and conversions more effectively. This gave them a clearer understanding of which marketing channels and campaigns were driving the highest ROAS.
Advanced Targeting and Segmentation
Using the insights obtained from zero-party data, Allbirds refined their targeting and segmentation strategies. They identified specific customer segments with precision and delivered highly relevant and personalized campaigns that resonated with individual customers.
Streamlined Ad Operations and A/B Testing
The custom coupon data, along with other collected zero-party data allowed Allbirds to optimize their ad operations and conduct A/B testing more effectively. They analyzed the performance of different ad creatives, messages, and placements to identify the most effective combinations.
Conversion Rate Optimization (CRO)
By leveraging zero-party data, including customers' advertising IDs, in-app behavior, and survey responses, Allbirds gained valuable insights into customer preferences, behaviors, and purchase patterns. This allowed them to optimize their landing pages, website experience, and conversion funnels. With a deep understanding of customer needs, they achieved improved CRO and higher ROAS. It was like having a personal shopping assistant, catering to each customer's unique desires. No more high abandoned cart rates. With a more complete understanding of the customer journey, each touchpoint could be measured and optimized, leading to an increase in sales and therefore more effective ad spend.
Monitoring and Optimization
Through real-time monitoring and continuous optimization, Allbirds fine-tuned their marketing initiatives based on the insights gathered from zero-party data. They made timely adjustments, identified areas for improvement, and drove sustained ROAS growth. Zero-party data yielded even more data. There is the data that fuels ads, and the data gleaned from each campaign. With more data used to power campaigns, more accurate data was yielded as a result of the campaigns, allowing for effective, real-time monitoring and optimization.
Conclusion:
The collaboration between Allbirds and TIKI exemplifies the successful integration of privacy, personalization, and trust in a privacy-centric climate. By leveraging custom coupons as a means of data collection, including customers' advertising IDs, in-app behavior, and survey responses, Allbirds respected customer privacy while delivering highly targeted campaigns that led to unmatched ROAS. This innovative approach demonstrated Allbirds' commitment to addressing customer privacy concerns while achieving exceptional results. With the power of zero-party data and the strategic use of custom coupons, Allbirds unlocked a new era of personalized marketing that drives exceptional ROAS. It's a win-win for both businesses and customers, combining privacy, personalization, and profitability in perfect harmony. Turns out that those things can co-exist after all!
