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dunnhumby and BzzAgent Study Finds Social Advocacy Programs Utilizing Shopper Data Generate Sales Lifts That Sustain Months after Campaign Ends

June 11, 2012

Research Highlights Need for Behavioral Data to Maximize Social Marketing ROI

By Virtual-Strategy Magazine

A groundbreaking study from dunnhumby, a global leader in building brand value for consumer goods and retail companies, and BzzAgent, Inc., the social marketing experts, found that brand advocacy programs targeting consumers based on their previous purchasing behavior generates higher in-store sales lifts with sustainability than campaigns using demographic or social scoring data alone. The study found that campaigns leveraging household-level shopper data to target known customers online generated an average sales lift of 8% for brands. This represents an increase of 19% over previous studies using demographics and store-level analysis. Further, those sales lifts sustained at an average of 4% even six months after the campaign ended, thanks to the residual social discussions and the lasting impact of personal recommendations.

“The dunnhumby and BzzAgent research shows that brand advocacy by the right group of consumers has a direct and measureable impact on product sales,” said Malcolm Faulds, Senior Vice President, Marketing, BzzAgent. “The most effective social marketing campaigns leverage shopper insights to target those consumers that already have experience with the brand or category and want to help other consumers make better purchase decisions. Further, unlike traditional advertising and promotions, the sales impact of a successful brand advocacy campaign sustains for months after it concludes.”

Brand advocates, those customers who recommend specific brands and retailers to their friends and family, are an increasingly valuable resource for marketers today as social media and digital platforms have helped to increase the reach and timeliness of word-of-mouth recommendations. According to a 2010 McKinsey Quarterly study, word-of-mouth was the primary factor behind 20-50% of all new purchase decisions.

“Social media can have a powerful influence on consumer behavior, but many marketers develop social strategies and campaigns based on ineffective data and insights,” noted Matthew Keylock, Senior Vice President, Media Partnerships, dunnhumby. “Now that behavioral shopper insights can be applied to social marketing, marketers can earn a greater return for brands and apply insights from social advocacy campaigns to inform future planning in other channels, both on and offline.”

The dunnhumby-BzzAgent research, the first joint research initiative the companies have undertaken since dunnhumby Ltd. acquired BzzAgent last May, was presented on Tuesday, June 12th at the Advertising Research Foundation’s (ARF) Audience Measurement Conference in New York.

Among additional findings in the study:

    Brand and category buyers drive increased advocacy

Consumers participating in advocacy programs who previously purchased the featured brand or category generated higher volumes of quality word-of-mouth endorsements online about the product.

    Advocates with prior brand purchases make twice as many repeat purchases

After involvement in an advocacy program for brands they have previously purchased, more than twice as many advocates targeted by their purchase behavior made repeat purchases compared to consumers targeted based on demographic attributes alone.

“Advocacy programs conducted with loyal customers not only generate higher levels of quality, authentic word-of-mouth recommendations for a brand, becoming an advocate for the brand created a stronger emotional connection to that brand, increasing their loyalty,” noted Keylock.

“As the ARF learned in our recent Digital/Social Media Arrowhead research and reported at our March Re:think Conference, social marketing clearly influences consumer behavior. But understanding that relationship to make the practice more effective continues to be a challenge for brand advertisers,” said Don Gloeckler, EVP, Chief Research Officer, ARF. “The dunnhumby-BzzAgent research is very timely and relevant for marketers in that it offers an approach for greater accountability in social media through brand advocacy and the use of purchase behavioral data.”

The advocacy programs evaluated in this study utilized anonymous, household-level purchase behavior managed by dunnhumby. Shoppers were identified as potential advocates based on their purchase history and invited to opt-in to advocacy programs executed by BzzAgent. Sales lifts were determined by campaigns involving over 100,000 consumer advocates.

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