CPG Data Specialist Dunnhumby Sees A Future Forging New Currency

LungHuangDunnhumby, British grocery giant Tesco’s data science subsidiary, sits at the intersection of online and offline retail data. It mashes up CRM files and loyalty card information, which brands can use to prove sales uplift.

Tesco isn’t the only retail outlet to supply this service. Walmart, for instance, turns in-store and online transaction data into useful intel for its own suppliers, as in, what channel or message moved product in which store.

But will Dunnhumby remain part of Tesco? Reuters reported in early October that the data insights unit might be for sale.

To this point, however, Dunnhumby itself has been acquisitive on the shopper marketing front. It acquired digital retargeter Sociomantic for about $200 million last April and previously purchased both word-of-mouth marketing firm BzzAgent and advanced analytics shop Standard Analytics.

Lung Huang, the company’s VP of digital advertising and global partnerships, spoke with AdExchanger about the company’s focus in the wake of the Sociomantic acquisition.

AdExchanger: When you’re selling Dunnhumby’s services, who do you talk to?

LUNG HUANG: We’re definitely a buy-side business because we serve two major client bases: the retailers as well as the brands. When I say brands, it’s primarily CPGs that sell within our stores. From a retail standpoint, whenever we build an engagement, we typically [work with the largest] grocers, which is our heritage, but we do consumer markets and others.

What are you unlocking for them?

First we help the retailer understand who are their customers. We also have a software-as-a-service model where once we help build [their] data stack, we help brands learn more about how they’re selling in-store.

We’re helping the retailer understand what is this data, how can it be used for merchandising, pricing, assortment and selection, and how can they make better media decisions based on this data set, because nobody wants to share their data.

So you’re on the media side, I’m assuming.

My focus has been on the media side and … working on the ratings end, [we’re] connecting our data in a de-identified, privacy-protected way into multiple channels. This year, we did a seven-channel multichannel attribution [project] based on our household data and so that’s really been where the focus has been. How do we innovate in a capability we’re being asked for by brands and retailers not only in the US, but in 31 other countries?

What are brands asking for?

We’re seeing a lot of brands wanting to onboard their CRM file. The CRM file can be flat – middle-age, skewing female – but not every person should get the same email message from the brand. That’s where our customer science comes in – we start helping them understand what information they should send out to people based on their personal relevance.

Is this why Dunnhumby bought digital demand-side platform Sociomantic?

I was fortunate enough to be on the team that was vetting it, and we started with 50 different companies in ad tech, whittled it down and in the end, there was a clear-cut winner. In this day and age, we’re obviously protecting our data and we were just basically handing that off to a trading desk or DSP to go out there to execute. It felt like a natural fit to bring it in house and have that flexibility.

So in addition to keeping the data closer to your chest, what made Sociomantic your choice?

They were sold in to major brands and our technical guys said their tech was a work of art. They want to automate anything that’s possible and really take out the costs. They were very up front with the people that they work with. It’s a cost-plus mechanism and it’s about the customer and that’s what made it so attractive. It was very easy to be enthusiastic about what they were accomplishing.

What’s Dunnhumby’s role in the programmatic ecosystem?

What we’re doing now with programmatic is very similar to what Ted Turner did in the 80s. He used to sell Ginsu knives on CNN. He didn’t need ratings, he knew he was moving product and that’s what we’re doing today. We’re working outside of the “Nielsen currency” and transacting business outside that whole ecosystem. Looking at television and where it is today and all the distribution fragmentation, there is no way one company will lead this and we are glad to be a part of it.

What does new currency look like?

When AC Nielsen first decided to measure television, it was based on a diary. Then it became a people meter and then the next 30 years went by and the meters are still here. There will not be one currency because you can have multiple currencies based on what the customer wants. Oreo wants their audience and currency based on who buys Oreo cookies. Each one is able to cater their success metric to what they want and it won’t be based on demographics or purchase intent.

What will it be based on?

We sit in fast-moving goods. Things with longer selling cycles such as clothing or cars will need different currencies and it will be really hard for purchase-based targeting and data-driven marketing not to take hold because we want to show exposure, and whether somebody bought it.

We also don’t have a stake in the game if television wins or online video wins. There are players out there who have a heritage in the television business, where if they make TV look bad, that’s bad for their business. We serve retailers and CPGs.

What are you doing with Facebook to show brand uplift?

We usually [let] Facebook [do the] talking, but our partnership has probably been around for three years and we’re able to show the overall measurement of sales uplift at scale. It’s really about people, not cookies. We work on FBX as well.

Now [Facebook] is talking about video. “What resonates with consumers on video based on what you purchased?” It’s not just in the US where we’re talking with Facebook. We do this in the UK and there are probably a few other markets that will probably be announced later on.

Is there a master Dunnhumby database which all of your partners essentially plug into, etc.?

There are a lot of companies that are willing to white-label a lot of items. We partner with LiveRamp and have also partnered with Datalogix. It’s one of those things where everyone has their own tech and we [need to] protect our data but also be connected everywhere else. We have a great relationship with Experian and talk to people like Epsilon and Acxiom. We don’t allow certain people to use our data sets such as other retailers because it’s a very competitive market. We allow a private DMP of our data, and LiveRamp and Datalogix power that. We also have partnerships with Videology and PlaceIQ and Rentrak, Tivo and DISH network [on the TV and ratings] side.

Does Dunnhumby have a long-term home at Tesco?

The retailer who owns the data has to be bought in or else it really doesn’t work. There are lots of rumors out there, but they’re rumors.


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