Alp Mimaroglu gave a presentation on harnessing data and AI to enhance customer experience. He discussed how Amazon achieves strong customer experience through personalization, easy to use interfaces, fast delivery and returns. He emphasized that businesses should focus on incrementality and value creation when assessing digital advertising effectiveness. Personalized marketing works best for customers with little purchase history rather than frequent buyers. Proper evaluation of digital targeting requires considering whether customers would purchase without advertising. Strong customer experience builds valuable brands that can charge price premiums and capture more economic value over time.

1. MASTER
CLASS
Alp Mimaroglu
HEAD, MARKETING TECHNOLOGY,
CAMPAIGNS, AND STRATEGY
SYSCO
DALLAS, TX ~ NOVEMBER 2 - 3, 2023
DIGIMARCONTEXAS.COM | #DigiMarConTexas
Personalization in the Digital
Age: Harnessing Data and AI for
Enhanced Customer Experience

2. DigiMarCon
Improve Your Digital Experience to
Drive More Revenue
Alp Mimaroglu
Marketing Strategist and Technologist

4. Agenda
• Customer Experience
• Incrementality
• Brand

5. The
Experience

6. Behind Amazon’s Strong CX...
• Strong eCommerce: Easy to use, easy to find products, deals,
inspiration. Marketplace for sellers and buyers.
• Personalization: tailors recommendations based on customer
preferences and history.
• Interconnected Marketing, Sales, Service:
⚬ Big selection of products
⚬ Low prices for premium products (economies of scale)
• Customer-Centric:
⚬ Really fast delivery and returns that are reliable
• Product-led Growth: E.g. Customer reviews and ratings foster trust
and informed decision-making.
• Optimized Value Chain: across employees, customers, online and
offline

7. Personalized Proactive
Omni-Channel CX

8. Mistakes Businesses Make....
Working on the wrong things
Roadmap
Purchasing 1 or 2 cloud technologies hoping will solve everything
Alignment and change, while outpacing competitors
Missing Incrementality and Value Creation

9. • $225~ Billion a Year Spent
on Google Advertising
• Google Adwords
• What is really driving the sale?
*https://support.google.com/google-ads/answer/1722066
Advertising

10. •Does not account for the fact that people
would buy irrespective of Google Ads
•ROI shrinks under controlled experiment
●Need to consider incrementality
●Cost accounting
*https://support.google.com/google-ads/answer/1722066
Advertising

11. Focus on what Matters
And Assess the Right
Metrics

12. Let’s Get More Tactical...

13. Incremental Digital Ad
Effect?
• Was the purchase after ad exposure incremental?
• What is the counterfactual?
⚬ Would customer have purchased without ad
exposure?

14. Incrementality in Advertising

15. Incremental Digital Ad Effect?
Google Organic
MSN Organic Google Organic
Google Paid
• eBay tested the return of brand keywords in search advertising
⚬ E.g. users searching “eBay” or “eBay Shoes”
⚬ Hypothesis is users using search as navigation tool
⚬ When paid search turned off, ~99.5% of traffic went through organic search
⚬ Outcome: Stop brand-keyword paid search ads because organic search is free traffic
MSN Paid
• Blake, Nosko, and Tadelis (2015):

16. Value of Personalized Marketing
Half the money I spend on advertising is wasted; the trouble is I
don’t know which half
John Wanamaker

17. Non-Branded Keyword Search

18. Paid Search Impact by User Segment
• eBay tested the return of non-brand keywords in search advertising
⚬ E.g. searched “used gibson les paul“ or “used guitar“
⚬ The best search advertising results came from the least active customers (or no idea of the company or offering)
• Zero historical purchases, then people with less than 3 purchases in past 12 months.
• No purchases past 1 year (360 days)
• Not aware item exists on eBay
• Blake, Nosko, and Tadelis (2015):
“Consumer Heterogeneity and Paid Search Effectiveness: A Large-scale Field Experiment”

19. Paid Search Attribution by User Segment
• Frequent purchasers are more likely to engage with Google paid search or click ads
⚬ Advertising engagement occurs mostly from people buying 50+ times a year
● Advertising has no positive effect on purchasing behavior - for high-volume, frequent purchasers.
⚬ Purchase would have occurred without advertising
⚬ Highlights tendency of industry-used attribution models to mistakenly treat purchases as causally influenced by ads.
• Blake, Nosko, and Tadelis (2015):
“Consumer Heterogeneity and Paid Search Effectiveness: A Large-scale Field Experiment”
Count of Buyers in
Each Group

20. Economic Value of
Digital Targeting
•A Customer Dwells On A Product Page
⚬Then does not purchase
⚬Later retargeted on Facebook
⚬Finally clicks the ad and buys the product
•Does The Economic Value Apply?
⚬Target customer if expected profit is
positive

21. Economic Value of Digital Targeting
Scenario B:
Buys irrespective of targeting
Even if not (re)targeted, the customer
returns to the product page and makes
the purchase
Scenario A:
The customer does not return to the
product page if not (re)targeted

22. Economic Value of Digital Targeting
• Scenario A
Compared to not retargeting, the value of targeting is positive
• Scenario B
The customer buys irrespective of targeting, hence the value of targeting is negative/mute
• Issues
⚬ In scenario B we observe that the customer retargeted and purchased the T
shirt, and might mistakenly conclude that retargeting caused the purchase
⚬ Need to consider the counterfactual
￭ Would have the customer bought without advertising?
• Compare to potential outcomes framework
⚬ Economic value of digital targeting must be based on the incremental profit

23. Economic Value of Digital Targeting
• A conceptually correct prediction of the economic value of
digital targeting must consider the potential outcomes
⚬ Profit if we target
⚬ Profit if not target customer
• The best targeting is based on a comparison of potential outcomes

24. Economic Value of Digital Targeting
• Target a customer if the incremental value from targeting exceeds the cost
• We observe if the customer was targeted and if the customer was not targeted

25. Strong Customer Experience
Creates Strong Brands

26. Brand Value

27. The Power of Brand Value
Brand is the ability to charge price premium

28. Neverfull MM
M40995
$2,030
The Power of Brand Value
Brand is the ability to charge price premium
Voyager Medium
Logo Tote Bag
Style # 30F8GV6T2B
$298

29. Price
Quantity
Strong Brands Allows More Value Capture by Pushing out the
Demand Curve
Brand Development

30. Price
Quantity
Maximizing Growth Opportunities by Capturing Value
Brand Development
Typically Luxury Brands
Capture Value Here

31. Price
Quantity
Brand Development
Maximizing Growth Opportunities by Capturing Value
Typically Value Brands Capture
their value here

32. Where Does Brand Value
Come From?
• Customer Experience
• Consistent Experience
• Others Peoples Experiences
• Advertising
• Distribution
• Pricing
• Product, Service, Packaging
• Logos, color

33. Brand Value in Louis Vuitton Balance Sheet
Goodwill and intangibles

34. Brand Value in Linkedin
‘Goodwill’ can be an indicator of brand value during acquisition
• December 2016 Microsoft Acquires
Linkedin for $27 Billion
• Goodwill is an intangible asset that
shows up during acquisitions
• Goodwill = purchase price - (assets -
liabilities
• Impairment: occurs when an asset drops
in value
⚬ AOL Impairment:
$98.7~ billion in 2002

35. Google Trends is not a measure of Brand
Online traffic is not a measure of Brand

36. Measuring
Brand Value
Price Premium
Goodwill and Intangibles
Revenue A to B to C
NPS or Survey
Take a substitute and discount cashflows to Net Present
Value (NPV)

38. Strong Brand
Captures More Value
Investing in CX
Creates Strong Brand
Incrementality
Exceptional CX
KEY
TAKEAWAYS

39. Alp Mimaroglu
SENIOR LEADER IN MARKETING STRATEGY
&
TECHNOLOGY
LinkedIn
www.linkedin.com/in/alpmimar
E-mail Address
alpmimar@gmail.com
CONTACT
Any Questions or To Schedule an
Informational Session

40. Thank you