As AdAge reports, Facebook may obtain the phone numbers and email addresses that customers supply to drug stores in return for discounts and loyalty points. The company will then match the numbers and emails with user Facebook profiles in order to create new marketing opportunities. This means, for instance, that I might buy ex-lax at the store and then see ads for All-Bran in my Facebook feed.

This merging of online and offline data creates powerful marketing opportunities and, as ad industry people like to point out, will let people see ads they’re theoretically interested in seeing. In this perfect world of data-based marketing, no company will waste their money showing baby food or make-up ads to the likes of me — and I will be happier because I don’t have to see those ads.

The flip side, of course, is the creepy factor. Facebook and the data companies (in this case Epsilon, Acxiom and Datalogix) do take care to protect so-called “PPI” (protected personal information) by scrubbing out names and just using other techniques to make the data anonymous. But one still shudders about the unencrypted information escaping into the wild through carelessness or hacking. In my case, it just increases my resolve to provide retailers with fictitious names and numbers.

For now, we may still be a ways of from the onslaught of fiber ads in our Facebook. According to AdAge, the new “custom audience” options are still winding their way through nervous corporate legal departments.

(Image by gcpics via Shutterstock)

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An ancient history lesson

We call it big data in the age of the ubiquitous web, but the truth is that politicians have been amassing files on potential voters for at least a decade. Some experts credit the strategy to Bill Clinton’s reelection team in 1996, which decided to focus its efforts on winning over swing voters rather than the entire electorate. George W. Bush took it even further, narrowing his focus down to swing-voter Republicans so as to maximize resources even more efficiently. All of this required a tremendous amount of data mining to figure out who these people were, where they lived and what they cared about.

Fast-forward to 2008, and the Barack Obama campaign took the process to another level thanks to its well-executed web campaign. In the process of raising about half a billion dollars online, the campaign gathered around 13 million email addresses and 5 million friends across the social media landscape. After mining this data and combining this stuff from voter-registration records, the team was able to identify the cream of the crop in terms of potential voters and deliver them a personalized campaign experience — everything from organizing rides to polling places to phone calls addressing specific points people had raised online.

You might have noticed by looking at the names associated with these efforts that running a data-driven campaign works. Managing large teams of volunteers, paying for television ads and otherwise running a major campaign is expensive business (save for those dirt-cheap and annoying robo-calls). Knowing whom to target lets campaigns spend their valuable resources in the right places and avoid wasting money trying to win over individuals staunchly on the other side or unlikely to actually get out and vote.

The age of big data

As it has with business though, particularly on the web, the age of big data has changed political campaigns yet again. Heading in the 2012 election, for example, President Obama has more than 20 million Twitter followers and his Facebook page has more than 29 million “likes.” Mitt Romney lags considerably behind — with less than 2 million Twitter followers around 9 million “likes” — but still has access to a lot digital data.

Thanks to technologies such as Hadoop, campaigns are able to store more data — and more types of data (think of all that unstructured social media data) — than ever before and process it en masse. Not only does this help with targeting individuals or groups, but it could also help with longer-term strategies such as where to schedule rallies and what issues to discuss at them. As feelings toward issues change, regular analyses of ever-expanding data sets should reflect those changes and let candidates shift their strategies accordingly.

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Of course, all this additional data means more than just knowing what issues matters. It also means just knowing you, period. What you drink, the car you drive, where you shop — they’re all pieces of a digital profile that lets politicians make sure they put their messages in front of the right people. It’s a process called microtargeting, and it’s very real — especially online.

Bryan Gernert

Bryan Gernert, CEO of Resonate Insights, explained to me recently how his company goes about serving billions of targeted web ads to its growing stable of political customers. In 2008, he said, neither presidential candidate spent very much money advertising online, but Resonate is presently involved in about 100 campaigns, with clients that include campaigns, political action committees and other special interest groups. At present, he said, Resonate has about 250 terabytes of behavioral and opinion data; it runs a 110-node Hadoop cluster and a 300-billion-row database.

All that data feeds predictive models based on mountains of data gleaned from surveys, web behavior, demographic information and other sources to deliver specific ads to specific web users. Resonate’s algorithms take into account 300 million “decision nodes” to in order to model all the attributes of each user, and they deliver each user the best-possible ad from a collection of a client’s pre-manfactured ads. So, a socially conservative independent will see a different ad compared to a fiscally moderate liberal or a centrist independent with a laser focus on job creation as the election’s most-important issue.

Things are only going to heat up. Gernert says he foresees candidates in future election cycles doing a lot more with custom videos targeting specific voter segments, as well as putting a much bigger emphasis on how to deliver optimal ads on tablets and smartphones.

Joe Lichtenberg, VP of edge computing for Mirror Image Internet, sees a lot of his company’s clients implementing what he calls “dynamic creative optimization,” and wouldn’t be surprised to see this approach make its way into politics. Essentially, that means advertisers create templates that can be populated with custom content on the fly to fit each web user’s specific profile. Already, startups such as DataPop and BloomReach have built businesses around this practice for customizing web site content and ads on search engines.

Mirror Image hosts application logic for customers, including Resonate, on geographically dispersed edge servers so it can calculate incoming data and deliver content in real-time without requiring it to hit a centralized server somewhere.

Does it work?

The great thing about doing this type of targeting online is that campaigns can get pretty clear evidence of whether it works. Gernert said his company can track traditional metrics such as clickthroughs and length of time engaged in pre-roll video before skipping it and getting to the featured video. Thanks to the cookie-tracking policies on candidates’ web sites, it could be relatively easy to track whether site visits or other actions follow the consumption of personalized content. Resonate will even engage in some online polling to gauge effectiveness.

And while studies suggest that voters are turned off by the idea of being targeted — some respondents even say they’d be less likely to vote for a candidate who targeted them — it might not matter too much in the long term. For one, these personalization algorithms are complex and marketers are smart, so voters won’t necessarily know when or why they’re being targeted. Another reality is that how voters feel and how they vote doesn’t always go hand-in-hand, which is why negative ads persist despite rather widespread contempt for them.

If the data says microtargeting works, there’ll be no escaping campaign ads without a serious curtailment in the amount of data web sites, mobile apps and other platforms can collect about users. Until that happens, though, all our online activity just creates a smorgasbord of personal data upon which candidates are more than happy to feast. So, you tax-hating, gun-toting, gay-rights-supporting swing voter, get ready to know why both candidates have your back in 2016.

Feature image courtesy of Shutterstock user iQoncept.

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The Waltham, Massachusetts–based company told me it has hit half a million users on a shoe-string marketing budget since it launched its ecoupon product in April, putting it on a faster initial pace than Groupon and Foursquare. SavingStar is banking on the enduring popularity of coupons and marrying it with smartphones and loyalty reward programs, creating a national ecoupon network that has some impressive reach with retailers.

More than 24,000 grocery store and drug store locations and 100 national chains have partnered with SavingStar, tying their loyalty rewards programs into SavingStar’s digital coupon platform. Users access the SavingStar website, iPhone app, or Android app and connect their account to their local store loyalty card programs. Then when they see a coupon they like on SavingStar, they add that to their account; when they buy the item at a participating store, they use the mobile app to redeem the coupon at checkout and their savings gets applied to their SavingStar account. When a user hits $5 in savings, they can get paid out their money directly to their checking or savings account, PayPal account , through an Amazon gift card, or make a donation to a charity.

Everyday rewards

David Rochon, SavingStar’s CEO, said the power of the program is that it is applying shopping innovation to grocery and drug store purchases, which is much more relevant to users than the typical daily deal.

“Everyone is coming up with a program but most of them are for infrequent purchases. But the category we’re dealing with is the everyday rewards category. It’s about being a part of people’s lifestyle on a consistent basis,” he said.

He said consumers shop at a drug store 2.2 times a week and 89 percent of shoppers visit more than one grocery store a month. By collecting coupons from national brands and manufacturers on a platform that works with their existing loyalty programs and the smartphones many have already, it takes away the mess of clipping coupons or printing out coupons a la Coupons.com. He said a study commissioned by SavingStar found that 79 percent of men think coupons are a good way to save money and 70 percent of respondents under 35 want coupons on their smartphones.

The catch for consumers is that they don’t actually get the discount applied to their bill immediately. It must get processed, which can take a day or two, and sent to their SavingStar account and doesn’t get paid out until a user hits a certain threshold. But consumers are not deterred by that limitation, said Rochon, because they still see it as a tangible reward.

Retailer and manufacturer benefits

For retailers and manufacturers, the case for SavingStar is also pretty compelling. Rochon said the redemption rates of coupons can hit up to 22 percent, compared to 1 percent for traditional print coupons in newspaper. He said there are typically more than 360 billion coupons printed each year, almost all of them appearing in newspapers and almost all discarded. But for retailer and merchants, print coupons adds to the work flow of workers, who have to set them aside, and they also have to be aggregated and counted at some point.

For brands, ecoupons through SavingStar offer not only higher redemption rates and avoid the need for print coupons, they also offer a cost-for-performance model so companies only pay when coupons are redeemed. And it’s an effective way to get people to try a new product. Rochon said 55 percent of shoppers buy 100 products or less. But 85 percent of respondents in the recent survey said they would try another product if they had a coupon for it. Also, SavingStar is also able to help manufacturers craft more complicated offers such as $10 off of $30 spent on specific products, something it can calculate on the back end. That, in turn, can help a brand build a deeper relationship with specific users.

While brands understand that distribution of coupons through newspaper is growing more challenging, they needed a national network to keep offering deals. SavingStar is hoping to be that resource though it will continue to have competition from Coupons.com and others who are moving to more mobile coupons.

“We believe we can take Coupons.com one step further,” he said. “Instead of giving consumers the ability to print out coupons, we’re completely delivering everything digitally and we’re doing it on a national network of retailers.”

Expanding coupons to more users

In the future, SavingStar is looking at incorporating other reward programs so users can apply their savings to hotel or airline points, Facebook credits or gas rewards. The company is also looking in the next three or four months at offering a white label service that a big reward program like a hotel chain or airline can also integrate into their own system. And SavingStar is looking at increasing the frequency of the coupons, many of which are offered on a monthly basis.

SavingStar has got a good start in this space and seems to be leveraging assets like smartphones and loyalty programs well. I think this is a big opportunity that makes sense. People understand the value of coupons and reward programs. And they’re comfortable using their smartphones to find deals and discounts. It’s logical to get them to use their smartphones to apply digital coupons at the point of sale for the kind of purchases they make everyday . The challenge will be to line up more brands and manufacturers so that the coupons are varied, timely and attractive. SavingStar has a team of 10 salespeople, one-third of its overall team, though that will likely have to go up if it wants to attract more companies to its network.

But it has some solid backers including Flybridge Capital Partners, First Round Capital and IA Ventures, who along with angel investors such as Ron Conway have helped SavingStar raise about $10 million to date. The local commerce space is still heating up and there’s plenty of ways to activate more savings for consumers using discounts and smartphones.

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The two Hadoop converts that exposed themselves publicly are TidalTV, which is using Karmasphere’s application-development tools atop of Amazon Elastic MapReduce, and LiveRail, which is using Apache’s Hadoop distribution in conjunction with Infobright’s open-source analytic database. For TidalTV, the decision to turn to Hadoop is the result of a rapid growth in network activity — “a rate of 20-40 million data ‘pings’ every 24 hours” — making it far more challenging to store and analyze the data, especially in light of its desire to accurately track revenue against specific targets and deliver detailed reports back to advertiser clients.

LiveRail turned to its Hadoop-plus-Infobright setup to handle an increase in customers needing near real-time access and the ability to run ad hoc queries against the “millions of rows of data produced every day.” According to the announcement, LiveRail monitors more than a dozen metrics for video content, “including percentage viewed/completed, pause/resume and muting.” In its new analytics environment, data goes through an ETL process before being processed by the Hadoop cluster and ultimately being loaded into the Infobright database that underlies LiveRail’s customer-facing reporting platform, although customers also can access some of the raw data stored in the Hadoop cluster.

From YouTube to Hulu to CNN’s new multi-platform video-news service, as well as just about every corporate website presenting video content, there is a new and vast collection of data to collect, analyze and monetize, and it seems very likely that Hadoop or similar technologies will become a big part of those efforts across the board — if they aren’t already.

Image courtesy of Flickr user drumm.

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Interactive ads in Cablevision’s Optimum Select program will have a small banner that says “Click SEL for More” rising up from the bottom of the screen. When a consumer clicks on the “Select” button on their remote, the programming shrinks to one-quarter size and moves up to the right-hand corner. Taking its place is a marketing message from the advertiser with the option for the user to click again to receive product information or samples. Since Cablevision knows the TV viewer’s address, it can subsequently fulfill any product requests as well.

The TV industry has been throwing everything but the kitchen sink at the problem of the diminishing power of the 30-second TV ad, a problem that was fueled in no small part by the cable companies that brought cheap, ad-zapping DVRs into the home (Forrester projects that 31 percent of U.S. homes will have DVRs by the end of this year). Networks have tried everything from “remote-free TV” to microseries, and new TV Everywhere plans coming to the web from networks and MSOs will prevent ad skipping altogether.

The cable companies even formed their own consortium, Canoe Ventures, to create interactive and targeted ads, though Canoe has had to scale back its initial plans.

Cabelvision’s introductory Optimum Select campaign will roll out next month to all of its 2.9 million digital cable subscribers, with between six and 10 national advertisers participating.

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