2. RETAIL
MARKETER
INSIGHTS:
THE CURRENT STATE OF
DIGITAL AND THE FUTURE
OF PERSONALIZATION
A research study by Conversant
2
The study, conducted in December 2013 and January 2014, solicited information and opinions from leading
senior-level retail marketers. The digital opportunities and challenges covered in the study varied from the
current role that digital plays in marketing programs to the burgeoning interest and importance of personalized
one-to-one marketing.
For the retailer, this study provides a benchmark for today’s attitudes and efforts compared to those of a cross-
section of other retail industry leaders.
In addition, retail is often the “first mover” in digital when it comes to programs with a strong likelihood of ROI
impact. Thus, these findings are very relevant to marketers outside of the retail/e-tail sector.
3. Table of Contents
3
EXECUTIVE SUMMARY
DIGITAL SPENDING
ROLE & EXPERTISE
PERSONALIZATION & RETAIL DIGITAL MARKETING
VENDORS, COMPLEXITY & INTEGRATION ISSUES
ATTRIBUTION PLATFORMS & METHODOLOGIES
COOKIE BLOCKING & DELETION
RETARGETING & RETAIL
DIGITAL MARKETING HOT TOPICS
FIVE THINGS RETAIL MARKETERS SHOULD DO NOW
METHODOLOGY
4
5
6
7
9
11
12
13
14
15
16
4. As digital spending plays a progressively more important role
for retailers, senior leaders have strong opinions about the
opportunities and challenges they face in the digital space.
Strong evidence supports that senior leaders are “doing
their homework” and understand the key importance of
data management, personalization and measurement.
PERSONALIZATION: Personalization is clearly a hot
button topic for this audience. Nine out of ten acknowledge
that personalized messages work better than mass
communications. And while many recognize the cross-
device and omni-channel issues associated with executing
personalized marketing, the vast majority are convinced
that personalization represents the future of the industry.
VENDOR GLUT: Many senior leaders appear to struggle
with “vendor overload.” Respondents indicate they work
with an average of 12 digital marketing vendors, and
many find it increasingly difficult to engage with the right
partners and to integrate with those they already have.
PASSION FOR MEASUREMENT: For this group, interest
in measurement and attribution platforms appears to
be high, versus the industry average. And while the
most common measurement utilized is the “last click”
attribution approach, responses indicate many retailers
are looking to change their attribution methodology in
2014. Further, a majority of retailers express concern
about the potential impact of cookie blocking and cookie
deletion on measurement and user identification.
PASSION FOR LEARNING: These senior retail leaders
express a strong desire to learn about many of the key
topics and issues that will affect their digital marketing
efforts and success rates in 2014. Prime topics that
interest these respondents include cross-device
marketing, ROI measurement and mobile marketing.
EXECUTIVE SUMMARY
4
5. DIGITAL SPENDING:
AN INTEGRAL COMPONENT
OF RETAIL MARKETING
Years ago, digital represented only a few percent of total marketing spending, but with
consumers devoting more of their time in digital platforms and expanding digital marketing
capabilities, there has been a dramatic shift.
The digital retail leaders we surveyed reported an average of 39% of their total marketing spend
is devoted to digital — 111% higher than eMarketer reports for US marketing as a whole (18%).
What’s more, 39% of these senior leaders also report that digital represents half or more of their
total spending, proving that retail tends to be “ahead of the curve” with regard to digital.
“About what
percentage of your
company’s overall
marketing effort
is invested in
digital marketing?”
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
40%
0-24%
22%
25 - 49%
20%
50 - 74%
19%
75 - 100%
Average digital
allocation
39%
5
6. DIGITAL EXPERTISE
Given the importance of digital in the overall marketing
mix, it’s not surprising that marketers have placed a huge
emphasis on developing understanding and prowess in
digital marketing.
When asked, senior level retail marketers assess their
understanding of digital marketing strategies and tactics
quite favorably. Almost half rate their digital knowledge as
“expert” or “high.” Another 42% rate their understanding
as “medium,” and only 10% rate themselves as “low” or
“very low.”
DIGITAL’S ROLE:
GOING BEYOND
DIRECT RESPONSE
Historically, marketers have primarily used
digital in a direct response (DR) role. Today,
that’s no longer the case. Nearly 60% of
senior-level retail marketers disagree that
digital is better for DR than for branding. Recent
eMarketer data also supports this enlightened
view of digital – with almost 42% of total digital
spending now devoted to branding versus DR.
“Digital marketing is better for driving
short-term sales than long-term brand building”
“How would you rate your personal expertise
using digital marketing to deliver on your
business objectives?”
Strongly
Disagree
30%
Very Low
1%
Low
9%
Medium
42%
High
27%
Expert
21%
Somewhat
Disagree
28%
Somewhat
Agree
27%
Strongly
Agree
4%
58%
Disagree that
digital is better for
DR than branding
48%
Say they are
expert or have
high expertise
35%
30%
25%
20%
15%
10%
5%
0%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
6
7. PERSONALIZED MARKETING
Leveraging personalization as a marketing strategy gives retailers the opportunity to tailor content
and media delivery of brand advertising and messaging at the individual level. It takes into
consideration things like demographics, lifestyle, past shopping and browsing behaviors, as well
as predicted future behaviors, and uses that data to personalize communications and pinpoint
the best method of delivery to that individual.
More retailers appear to be interested in the potential power of personalized one-to-one
marketing as part of their efforts to drive stronger results and ROI.
INDIVIDUALIZED
MESSAGES ARE
MORE EFFECTIVE
Nearly 90% of senior retail marketers
“strongly agree” or “somewhat agree”
that individualized messages can be more
effective than mass messages.
Personalized communications tend to be
more effective because they tailor brand
messages to precisely suit the needs,
lifestyle, life stage and preferences of an
individual consumer.
“Individualized
messages and offers
can be more effective
than mass messages
and offers”
SOMEWHAT AGREE
30%
STRONGLY AGREE
60%
NEITHER DISAGREE OR AGREE
4%
SOMEWHAT DISAGREE
5%
STRONGLY DISAGREE
1%
90%
Say individualized
messages are
more effective
7
8. OMNI-CHANNEL
CONSUMERS MAKE
PERSONALIZED MARKETING
MORE DIFFICULT
Fifty-nine percent of senior-level retail marketer
respondents “strongly agree” or “somewhat agree” that
omni-channel consumer behavior, where consumers
access digital experiences across multiple channels
and devices, significantly complicates the delivery of
personalized communications.
PERSONALIZATION IS THE
FUTURE OF MARKETING
There’s little doubt among these senior level retailers about
the importance of personalized marketing for the future. In
fact, 72% agree that one-to-one communications represent
the future of digital marketing for retail.
“Multi-channel and multi-device consumer
behaviors make personalized marketing much
more difficult”
“The future of marketing is in synchronized
personalized communications tailored to
every individual”
2+26+46+12+14
Strongly Agree
Somewhat Agree
Neither Agree
nor Disagree
Somewhat Disagree
Strongly Disagree
2%
15%
26%
46%
11%
Strongly
Disagree
7%
Somewhat
Disagree
Somewhat
Agree
47%
Strongly
Agree
12% 12%
50%
40%
30%
20%
10%
0%
70% Agree personalized
communications are
possible
59%
Agree omni-channel
behavior complicates
personalization
8
9. “Approximately how many marketing vendors and solutions
providers do you do business with during the year?”
On average, marketers are working with 12 digital vendors
RETAILERS RELY ON MANY PARTNERS
Senior retail marketers face the challenge of working with multiple digital partners.
Sixty-five percent work with six vendors or more, while 35% work with five or fewer vendors.
0 - 5
6 - 10
11 - 15
16 - 20
21+
10+35+35+15+5
6% 10%
35%
35%
15%
9
10. CHALLENGE:
FINDING THE RIGHT PARTNER
Nearly half of respondents reported that finding the right
digital vendor is “somewhat difficult” or “extremely difficult.”
This trend will likely lead companies to opt to work with fewer,
more versatile vendors.
CHALLENGE:
INTEGRATING WITH
MULTIPLE PARTNERS
More than half of the senior retail marketers surveyed
reported “it’s difficult to integrate the large number of digital
vendors we work with.”
“How easy or difficult is it for you to find
the right vendor to address your digital
marketing challenge?”
48%
56%
Say finding the
right vendor is difficult
Say integration
is difficult
41%
7%
Somewhat difficult
Extremely difficult
Strongly
Disagree
6%
20%
Somewhat
Disagree
Neither
Agree nor
Disagree
18%
Somewhat
Agree
45%
Strongly
Agree
11%
50%
40%
30%
20%
10%
0%
10
11. MARKETING
ATTRIBUTION
PLATFORMS
Given their focus on driving sales and revenue, it’s
not surprising that this group has a high interest in
measurement. Of the senior retail marketers surveyed,
57% reported that they are using, or plan to use, a
marketing attribution platform in 2014.
LAST CLICK IS STILL KING
More than 2/3 of retailers reported using last click
measurement as their preferred methodology.
“Does your brand use the following
approach to digital marketing attribution?”
Use, or plan to use,
an attribution platform
57% FIRST CLICK
17%
LAST CLICK
68%
LAST VIEW
43%
MULTI-TOUCH
47%
INCREMENTALITY
38%
(Responses add up to greater than 100 because respondents
were allowed to report more than one methodology.)
11
12. “How concerned are you about recent developments like
Firefox/Safari third-party cookie blocking and cookie deletion?”
CHALLENGE:
THIRD-PARTY
COOKIE ISSUES
Sixty-two percent of respondents reported some level of concern about cookie blocking
and deletion and the impact on user identification and measurement. Only 11% reported
they are “not at all concerned.”
Very concerned
Somewhat concerned
Not very concerned
Not at all concerned
11%
11%
51%
27%
12
13. 26+74+R 44+56+R 28+72+R 26+74+R74%
44%
28%
26%
Retargeting is an
important tactic for
driving close-in/impulse
buyers to make a
purchase
Retargeting takes more
credit for sales than it
should because the
lower funnel
audience is more
likely to respond
Retargeting could hurt
brand due to consumer
privacy concerns of
being followed
on the web
Retargeting misses the
majority of my audience
by only focusing on
recent site-abandoners
Percent who strongly or somewhat agree
with the following statements
PROS AND CONS
OF RETARGETING
Retargeting remains a popular marketing tactic among 74% of senior-level retail marketers. That
said, nearly half of our respondents believe that retargeting takes too much credit for sales due to
the response rates from the lower funnel audience.
More than a quarter of respondents agree that retargeting may actually damage a brand due to
consumer privacy concerns and they also acknowledge that retargeting often misses the majority
of the ideal audience by focusing only on recent site visitors.
13
14. DIGITAL MARKETING
HOT TOPICS:
CROSS-DEVICE MARKETING
AND ROI MEASUREMENT
Interest in cross-device marketing is high, with 60% of senior retail marketers
expressing they are “extremely interested” or “somewhat interested” and 53%
expressing interest specifically in mobile marketing. Nearly 58% are “extremely
interested” or “very interested” in learning more about ROI measurement, while
integrating offline and online data and social media round out the topics in which
they appear to be most interested.
70%
60%
50%
40%
30%
20%
10%
0%
60% 58%
53%
44% 44% 43% 42%
37%
27%
22%
Cross-Device or
Omni-Channel
Marketing
Marketing ROI
Attribution and
Measurement
Mobile
Advertising/
Commerce
Integrating
Online/Offline
Marketing Data
Social Media
Marketing
Website
Personalization
Behavioral
Advertising
Online Video Retargeting
Display
Advertising
“How interested are you in learning about the following topics
in digital marketing?” (Percent “Extremely” and “Very” Interested)
14
15. FIVE THINGS
RETAIL
MARKETERS
SHOULD DO
NOW
1
PURSUE
PERSONALIZATION
IN A BIG WAY:
Even with the challenges of
omni-channel consumer behavior, it’s
clear that personalized marketing will
be big in 2014. For those retailers who
acknowledge and understand the power
of personalized marketing, they should
quickly prioritize the planning, testing
and implementation of personalization
into their plans. Identify partners who can
speed up implementation and deliver
personalized marketing in
pay-as-you-go formats.
2
CONSIDER FEWER,
BIGGER VENDORS:
Today, many retailers are
working with an average of 12
digital vendors, and with that comes the
challenge of multiple partner integration.
Retailers should identify fewer partners
with broader capabilities to reduce or
eliminate these integration issues.
3
GET A HANDLE
ON MEASUREMENT:
On one hand, our survey
indicates that many retail
marketers have a strong interest in
measurement, yet the data also shows
that simple measurement methodologies,
like last click, are among the most
popular. Retail marketers should task
their teams and partners to identify
measurement approaches that provide
a more accurate picture of ROI impact.
They should also explore alternatives to
third-party cookies for their omni-channel
measurement needs.
4
APPROACH
RETARGETING WITH
HEALTHY CAUTION:
While retargeting can play a
role for retail marketers, it’s important
to allocate the appropriate resources to
this tactic. Be sure to consider alternative
methods that will address opportunities
for growing the funnel.
5
CONTINUING
EDUCATION AND LEARNING:
Retail marketers tend to
view themselves as very
knowledgeable about digital, yet many
express an interest in learning about
emerging topics and staying on top of
trends in 2014. Digital mastery is a journey
and marketers should commit to learning
to stay ahead of developments that could
impact their business.
15
16. METHODOLOGY
From December 11, 2013 to January 31, 2014, senior-level marketers from Conversant’s
internal databases were contacted via phone and email to take a 10-minute survey.
Contacts were informed that the research was sponsored by Conversant (then
ValueClick, Inc.), Bovitz, Inc., and Edelman; they were also informed they would receive
a monetary incentive and a copy of the aggregated research results. 81 respondents
completed the survey.
ABOUT CONVERSANT, INC.
Conversant, Inc. (Nasdaq: CNVR) is the leader in personalized digital
marketing. Conversant helps the world’s biggest companies grow by creating
personalized experiences that deliver higher returns for brands and greater
satisfaction for people. We offer a fully integrated personalization platform,
personalized media programs and the world’s largest affiliate marketing
network – all fueled by a deep understanding of what motivates people to
engage, connect and buy.
For more information, please visit www.conversantmedia.com
Copyright 2014 Conversant, Inc. All Rights Reserved.16
