Neustar Aims To Take The Intuition Out Of Segmentation

NonintuitiveSegmentsNeustarWomen who wear Louboutin stilettos are more likely to watch boxing, have at least four credit cards and compost regularly. Snowboarders overindex for gambling, eating at Applebee’s and always being first in line to buy the newest tech gadget. Diet Coke drinkers likely drive a Mercedes-Benz, shop at Ann Taylor Loft and listen to the radio every day.

Who knew?

Those are a few of the non-intuitive segments pulled by Neustar through its PlatformOne product, launched in March.

The company, known primarily for its number portability technology that allows US consumers to move their phone numbers between carriers, is pivoting away from its telecom roots toward marketing services, digital analytics and online/offline attribution through PlatformOne. The product includes capabilities brought on through Neustar’s October 2013 acquisition of data-management platform Aggregate Knowledge.

It’s a meaningful and necessary move for Neustar considering the company’s government-bestowed portability contract, which it’s held since 1997, is up for renewal in the middle of this year, with Ericsson as the the top contender to win the business. The contract is worth roughly half of Neustar’s 2014 revenue of $964 million.

While marketing services only represents 15% of overall revenue, that division’s contribution grew 17% in 2014, clocking in at $147 million.

Data services has also become a key focus for Neustar, a sector the company is touting through “The Wagners,” a new trade marketing campaign centered on the adventures and unlikely interests of a typical, yet fictitious, suburban family. The goal of the campaign is to demonstrate the kind of non-intuitive insights that can come out of pure data science and analysis.

Fun-loving Dan Wagner, husband and father of two, loves video games, but he’s not a couch potato, also skewing high for camping and hiking. Pinterest- and strength-training-obsessed mom Alisha loves Snickers, but she wouldn’t dream of serving frozen food for dinner. Teen daughter Jody is a mathlete and horror flick fanatic, while little brother Jason is into Pop Tarts, beef jerky and sci-fi movies.

It’s pretty specific – which is exactly the point, said Jason Beyer, VP of consulting services at Neustar.

“Segmentation based on real data has evolved tremendously, but not all brands and agencies have been able to keep pace with … the monumental amount of consumer behavior data that advertisers have access to, which is why they often use traditional methods of primary research to try and understand their audience,” Beyer said. “That means they’re probably looking at their existing customers to find out what makes them likely to be customers in the first place – which is fine. But more progressive clients are willing to try and really get underneath or beyond those insights.”

In other words, next-gen segmentation means leaving preconceived notions at the door.

Recently, one of Neustar’s wireless clients wanted to go after the mobile broadband market. The company’s executive team was dead set on targeting business travelers – but after a bit of analysis, Neustar realized that its client’s goals were more aspirational than realistic.

Because that particular wireless company wasn’t as well-known as other major players in the space – and its network coverage was somewhat limited – it was out of the consideration set for business travelers from the get-go. At the time, all of its marketing and media was directed at that audience.

Neustar ad“When we looked at the data, we saw that their actual consumer was actually a less affluent home broadband user who couldn’t afford to pay for a triple play service from a traditional MSO like Time Warner or Comcast,” Beyer said. “That was a tremendously different segment of the population that this company was – frankly, with no evidence – going after.”

It took the wireless company a little while to accept the news. The data was contrary to the closely held, but unfounded, beliefs of its executives, but they came around in the end.

Neustar creates its audience segments by first taking stock of its client’s business objectives around acquisition, retention or whatever the KPI might be. That shapes and defines who the client is planning to target.

“We’ve learned over time that many larger companies don’t have a really solid handle on who they should be targeting,” Beyer said. “They know who they aspire to get, they have an intuition about who they customers are, but they don’t know who’s actually buying.”

Neustar ingests the client’s CRM data, including transaction history, email address, physical address, phone number and other household-based identifying info. Neustar associates that data with one of 172 different microsegments across the US population, comparing and contrasting it against about 16,000 different demographic, behavioral, attitudinal and lifestyle characteristics.

An algorithm goes on to make profile matches and draw connections between behavior and a person’s propensity to buy a particular product.

“We often hear things from clients like, ‘How are you getting that?’ or ‘How do you know that?’ because for some people these insights might feel like they’re coming out of left field,” Beyer said. “It’s tough to reconcile when you have something built up in your mind and the reality is vastly different.”

As part of its Wagners campaign, Neustar pulled an unsolicited series of less-than-obvious insights about brands that were advertising during the 2015 Super Bowl, promoting its findings with a site takeover of on the big day.

For one, Neustar found that fans of Dannon also like bourbon and Cheetos. Doritos eaters are into football, obviously – but also gluten-free snacks and antiquing. Axe antiperspirant users enjoy sipping on Kool-Aid and eating Little Debbie’s snack cakes, while Lexus drivers tend to eat Baked Lay’s potato chips and buy home pregnancy tests.

It’s interesting, but how can a brand actually use that kind of information beyond the novelty of it all? Neustar CMO Lisa Joy Rosner hearkened back to the Louboutin example.

“Knowing that your target audience is more likely to recycle or compost might encourage you to add a green twist to your next campaign. Knowing that your target is into boxing might lead you to have a hot boxer standing beside a woman wearing a pair of Louboutin shoes,” Rosner said. “It’s about deriving insights from the data and then taking action.”

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