There is more data avail­able on con­sumer pref­er­ences, behav­iors and inter­ests than ever before, so mar­keters must be more dis­cern­ing about which data providers they use and how they lever­age pur­chased data to dri­ve sales.

Through­out the process of vet­ting third-par­ty con­sumer data, it is impor­tant to remem­ber that the pur­pose of adver­tis­ing is to build loy­al­ty between a brand and its con­sumers, not just to increase impres­sions. Brands must ensure their third-par­ty data is col­lect­ed with con­sumer knowl­edge and con­sent, and in a way that deliv­ers appro­pri­ate val­ue to the consumer.

At a time when pub­lic sen­si­tiv­i­ty to data usage and pri­va­cy is high, this approach also enables brands to stay agnos­tic to the debates over pri­va­cy while deliv­er­ing more rel­e­vant, per­son­al­ized and enjoy­able ad expe­ri­ences to con­sumers. This is par­tic­u­lar­ly rel­e­vant now that Face­book mod­i­fied its built-in dig­i­tal tar­get­ing capa­bil­i­ty to require adver­tis­ers to ver­i­fy that they have the appro­pri­ate rights to access and use third-par­ty data to opti­mize cam­paigns on the platform.

To ensure your brand is respon­si­bly lever­ag­ing third-par­ty data to build loy­al­ty and opti­mize dig­i­tal adver­tis­ing, con­sid­er the fol­low­ing best practices:

(Full dis­clo­sure: IRI offers big data and ana­lyt­ics inte­gra­tions and insights.)

1. Ask the right questions.

It’s impor­tant to ver­i­fy that your data part­ners own or know the source of their data assets and that the data is col­lect­ed trans­par­ent­ly. Brands that know more about their data can think more crit­i­cal­ly about its use and bet­ter real­ize its value.

The fol­low­ing key ques­tions can help ensure pur­chased data helps meet your brand’s objectives:

• What is the data source? Are the sources rep­re­sen­ta­tive of all out­lets, geo­gra­phies, for­mats, chan­nels, etc?

• How many unique ver­i­fied pur­chas­ing house­holds are includ­ed in the data set, and what per­cent­age of the audi­ence is deter­min­is­tic? The num­ber of deter­min­is­tic, or ver­i­fied, house­holds includ­ed in con­sumer shop­ping data dri­ves the qual­i­ty of the data set. The more, the bet­ter. Few­er ver­i­fied house­holds mean more of the data is mod­eled, which means it is pro­ject­ed and less accurate.

• How often is this data refreshed? Recen­cy can be the dif­fer­ence between reach­ing some­one at the pre­cise point in their pur­chase cycle when they’re most like­ly to pur­chase and miss­ing the crit­i­cal win­dow of opportunity.

One way to alle­vi­ate the above con­cerns is to ask data part­ners for an assur­ance state­ment that helps brands under­stand exact­ly where their data comes from and how con­sumers con­sent­ed to share their information.

2. Use purchase-based, ‘known’ data for the most effective campaigns.

Most con­sumer data sets sold to mar­keters are mod­eled data, mean­ing they include a small amount of known data that is extrap­o­lat­ed to apply to a larg­er audi­ence. How­ev­er, the “known” data is often the result of self-report­ed sur­veys that may be inaccurate.

My com­pa­ny pub­lished the “IRI Equi­tyScore Data Research Report,” which sur­veyed 811 mem­bers of our nation­al con­sumer pan­el on their recent pur­chas­es and com­pared their respons­es with their scanned pur­chase behav­ior. Our results showed that con­sumers remem­ber what they pur­chase with only 40% accu­ra­cy. There­fore, sur­vey answers are far less accu­rate than pur­chase data, such as data col­lect­ed pas­sive­ly via a loy­al­ty card. While mod­eled data is use­ful in many con­texts, lever­ag­ing large ver­i­fied data max­i­mizes the abil­i­ty to reach the con­sumers most like­ly to pur­chase your product.

To dri­ve the most effi­cient, effec­tive and eth­i­cal dig­i­tal cam­paigns, brands should tar­get con­sumers based on things they know to be true about them, using deter­min­is­tic data the mar­keter has the right to use.

Known con­sumer pur­chase data is col­lect­ed trans­par­ent­ly and pas­sive­ly from cus­tomers who sign up for loy­al­ty pro­grams. This allows cus­tomers to deter­mine if the val­ue of a dis­count is worth shar­ing their data, and only when they present their loy­al­ty card is this data used to tar­get advertising.

This val­ue exchange pro­vides unpar­al­leled accu­ra­cy in under­stand­ing con­sumers’ pur­chas­es and how their pur­chase behav­ior changes over time.

Com­bin­ing large quan­ti­ties of deter­min­is­tic data with addi­tion­al high-qual­i­ty mod­eled con­sumers cre­ates an audi­ence that is both accu­rate and scaled, able to tar­get known buy­ers and high­est-val­ue prospects.

Research from IRI’s bench­mark data­base, a con­trolled study that ana­lyzes our adver­tis­ing part­ners’ expo­sure data to con­sumer pur­chase data, shows that using known pur­chase data to acti­vate a pur­chase-based tar­get­ed cam­paign boosts return on adver­tis­ing spend by up to 20%, and increas­es sales lift three to four times more than tar­get­ing method­olo­gies that use demo­graph­ic data. Impor­tant­ly, these supe­ri­or third-par­ty data sets are still action­able under Facebook’s new poli­cies, as long as the data was sourced transparently.

3. Let ‘likes’ inform your creative, not your core audience.

Many adver­tis­ers build dig­i­tal audi­ences for their cam­paigns using engaged pop­u­la­tions that “like” rel­e­vant posts or pages. But using this data, known as “inferred infor­ma­tion,” to choose a tar­get dig­i­tal audi­ence can be a major mis­step. Accord­ing to author Sher­ry Turkle, peo­ple are aspi­ra­tional on their social media accounts — they curate an online pres­ence that reflects how they wish they behaved, rather than their true preferences.

As such, buy­ing audi­ences built on known, pur­chase-based data ensures your adver­tis­ing will reach the con­sumers most like­ly to buy your prod­uct, rather than those most like­ly to post about it. That said, inferred infor­ma­tion can be help­ful in inform­ing your ad cre­ative. Using likes, trend­ing top­ics and viral videos to inform adver­tis­ing that dou­bles as engag­ing, time­ly con­tent can help to build your brand equi­ty on a rel­e­vant plat­form with excep­tion­al scale.

Mar­keters lever­ag­ing third-par­ty data to opti­mize dig­i­tal cam­paigns can respon­si­bly build loy­al­ty and dri­ve sales by ask­ing the right ques­tions, using the best qual­i­ty data in the ways it is most valu­able and ensur­ing that con­sumers are com­fort­able with the way their data is col­lect­ed and used.

With its recent pol­i­cy change, Face­book acknowl­edged the impor­tance of using qual­i­ty data for dig­i­tal tar­get­ing. Mar­keters should fol­low suit and insti­tu­tion­al­ize these third-par­ty data best prac­tices across their mar­ket­ing pro­grams to build trust with their con­sumers and posi­tion their cam­paigns for success.

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