Seth Hillstrom (SH):

Welcome to Part 3 of the eBev Live Global Interview Series! Today we are chatting with renowned CPG media, data and insights expert, Jennifer Pelino. Jennifer is VP of Omni Channel Media at 84.51˚, a subsidiary of Kroger, and has helped countless CPG brands understand and unlock their audiences. We’ll get started in a moment, and if you have any questions please feel free to ask (live or after the fact)! Jennifer, thanks for being with us today! Can you tell us a little more about 84.51˚?

 

Jennifer Pelino (JP):

Hi Seth, I’m excited for our chat and looking forward to sharing how to unlock your best marketing campaigns.

Let me tell you a little about 84.51°. 84.51° is a wholly owned subsidiary of The Kroger Company. The name pinpoints the companies’ longitudinal coordinates located in Cincinnati, OH. And it signifies our unique longitudinal, long-term approach to data analytics, providing a whole new depth of understanding and a higher level of insight for the partners and consumer brands we serve. Our data is passively collected from the loyalty cards utilized in the Kroger family of stores from 60MM shoppers annually. The Kroger family of stores is inclusive of traditional grocery stores, convenience stores, multi-department stores, and low price retailers across 24 banners and 38 states. Access to broad spectrum of over 400 food, drug, and merchandise categories inclusive of items like cereal, juice, deli/fresh, fine cheese, salty snacks and wine, spirits and beer. Our panel is demographically-distributed and we have access to world-class ethnic panels allowing us to find those specific groups like Mexican Americans.

In the media space, we essentially act as a book end to the campaign process. We can leverage the Kroger data to help you identify your exact consumer target based on what they purchase, not on scanner or self-reported data but their actual interaction with your products. Because of our scale, we are able to reach a huge magnitude of verified consumers within our audiences, but also can model out to the total US as needed. On the back end we are able to work with DSPs, DMPs, TV and mobile partners to connect exposures back to an individual household’s purchase behavior, 84.51° works with an onboarder that matches IDs and then passes the exposure file to 84.51° for measurement. That way we are able to ascertain which channels/creative/ campaigns you were exposed to, and then see when you came into the store to buy. For targeting, the process would work in reverse, where 84.51° would provide the audience file to the onbaorder to translate to a cookie for ad serving.

On top of that, we are looking to see whether you bought more or less than a perfectly matched control. This can be completed for not only Shopper Marketing Campaigns but the audiences can also be extrapolated for results at a national campaign level and because of the scale and precision of the data our market factors are extremely low providing results that are precise and conservative.

 

SH:

….By the way…data from 60MM shoppers’ loyalty cards annually? That’s powerful 84.51˚

Very Impressive!! Okay, I will jump right….

For a beverage brand about to newly define, or possibly re-define their ideal target audience, what are some of the key things they need to keep in mind (both about their brand, and about the data they’ll be digging in to)?

JP:

Whether it’s a re-launch brand or a new brand focus, really understanding the consumer necessitates very strong analytics and the ability to accurately identify current product purchases and behaviors, in order to have a full understanding of your consumer. This will allow the marketer to engage them properly, not only on the content side but on which platform. This will allow you to create the media campaigns around specific audiences for specific objectives. There are focused strategies for building out target audiences against defined objectives. For instance: Acquisition: To acquire customers to your brand target, verified medium and heavy known category buyers and lapsed brand buyers should be the focus Trial: To increase trial for a new product launch, target category buyers and verified brand buyers. For example, if your objective is to grow incremental penetration to your brand, it doesn’t make sense to target current brand buyers. Win Back: Target lapsed brand buyers & heavy category switchers to drive consumers back to your brand. Now that you know which audience to focus on, your attention should turn to where to find these audiences and where is the data coming from to build out these cohort groups.

Audiences can be derived many ways by first, second and/or third-party data based on data such as in-store purchases, shopping behavior, income, lifestyle interests, and family composition. However to truly discover or uncover the truth in the audiences, I suggest that starting with asking the right questions and understanding the underlying factors used to develop the audiences.

Look to address these key points when developing your audience: Understand the source and collection technique of the audiences. Is the data passively or actively collected from consumers? Is it survey, demographical, purchase or contextual data? The answers to these questions will help determine if you are working with the right vendor to help answer your brand objectives.

Ensure comprehension of recency, frequency and consistency at which the data is collected and refreshed. Recency can be the difference between reaching someone at the precise point in their purchase cycle and missing your window of opportunity. Data refreshment and its frequency is often not communicated, and it’s often why you receive countless re-targeting messages for a category product for which you just purchased.

If Propensity or Look-Alike Modeling is being applied know the techniques and validation methods being used. If you don’t have access to first party validated buyers, models can be used to drive improved personalization, predictive scoring, triggered campaigns, and media sensitivity. These robust machine learning applications are strong but you still need to determine the basis of the original data in which the back-end models are using to churn through.

 

SH:

Very interesting. When you’re working with beverage and CPG brands, is ensuring recency, frequency, and consistency of data collection something they’re doing well or an area we may be able to improve?

 

JP:

Great question and it is an understatement calling out the potential number of sources available for creating an audience. This is where you need to be a bit of a detective to ensure that you gain the data quality. No data set is perfect, however a deeper dive and a lot of questions to suppliers is necessary to truly understand audience makeup. While this might be an exhausting process, transparency will begin to emerge. You will ultimately feel freer in your thinking about what you are doing to help create your ultimate goal — a better experience for your customers which is reflected in the bottom line. My preference is to start verified audiences; those households that can be 100% guaranteed to already be shopping in the category or buying your brand. From there the funnel can be expanded or not, depending on the reach that is desired with the campaign. If you want an expanded reach, then you will have to model out the remainder of the households through look-a-like modeling methods. Knowing how the modeling and what source the “other” data is derived from will determine the quality.

 

SH:

Makes a lot of sense building out from what is already 100% known.

In your eBev Editorial piece, “Tend Your Soil to Maximize Yield”, you refer to “soil” as the elements and sources that go into your data composition. When a beverage brand is forming their “soil”, how do they figure out what metrics thy need to be shooting for? Everyone’s goal is to sell more beverage – but what are some of the indicators you see within an audience pool that make said goal more likely to happen?

 

JP:

Similarly, outlining your measurement objectives is key. So once the best most accurate data driving your objectives has been determined, a thorough process of defining which metrics, methodologies that you will use to measure your campaign, should be employed. Define which type of media source and device that will host your campaign. If there are multiple sources and devices hosting, you will need to put rigor around how the integration and matching of the data is determined to obtain an accurate read on the consumer groups targeted. Outline which methodology is being used. A test and control method is fairly standard practice but key is to have defined how tightly the control is matched to the test set. Delineate which metrics are the best for your campaign. Bottom-line metrics are the strongest. Tying everything back to sales is critical, so ensure that incremental sales lift, increased household penetration and trial-and-repeat can be measured.

 

SH:

That’s an extremely well thought out approach.

There’s a lot we can take from the way you so carefully approach audience, data source, medium, and purpose. All of this said, we’d love if you can give us a peek at the future…..You live in the world of beverage and CPG data and trends. Tell us what you see coming in 2017 and beyond. I believe you had recently mentioned a widening consumer palate – how do trends like this impact brand/consumer relationship development and engagement in the future?

 

JP:

Here are a few overarching themes and then I’ll get into some more specifics of what we will see turning up on our shelves. First is that we are going to continue to see the movement towards “Premiumization”. Consumers are increasingly seeking out high quality ingredients with increasing emphasis put on the production and care going into products. Artisanal claims have shown growth across the store and within beverage. Secondly, natural sweeteners will continue to grow in resonance as well as certified organic claims in all beverage areas; soft drinks, refrigerated juice, RT Tea, NF Beverage and Juice, Specialty Soft Drinks, Energy Drinks and Isotonics Thirdly — this is an offshoot of the other two themes and that is that niche or craft type products and smaller pack size products like single serving items will grow, taking share from the big brands.

I anticipate growth in the following areas: • Seasonal flavors; moving beyond the general pumpkin spice or peppermint flavorings. You could expect to see more unique flavors like butterscotch (e.g. Starbucks recent rollout of its Smoked Butterscotch drinks) and exotic flavoring related to seasonal beverages. • Infusion experimentation is going to explode; even in waters, expect to see more kinds of plant based waters…yes I’ve seen Maple Water…look for it near you J • We will see and influx of healthy energy drinks and the advancements in dairy drinks; both areas will have a big probiotic focus • We will see a flood of Asian influences not only will the spicy trend continue in beverages with new pepper types but we will see a juxtaposition with crisp and clean flavors with beer and a greater US appreciation for sake and sake based drinks.

 

SH:

To me, it sounds like a firm understanding of shifting consumer preferences will guide the next round of winning beverage brands. Product and Brand innovation remain key in navigating this landscape….and doing so without a data and media partner like 84.51˚ who can unlock these insights appears to be a rudderless future!

 

JP:

Thanks Seth and eBev, This was great and if anyone has any comments or wish to connect you can reach out to me directly on LinkedIn or @jenniferjpelino

SH:

Thank you Jennifer Pelino for taking some time to shed light on how beverage marketers need to be thinking about who their audience is, how to find them, and how to activate them in the right time and place. Thank you for also sharing such wonderful insights at eBev Shopper this past spring in Chicago (Jennifer was one of our highest rated keynote presenters!).

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