P2PIQ: So how does this translate into more impact among shoppers?
Schaff: Good question. Let’s talk segmentation as it’s a perfect example. We often say in the industry that a traditional segmentation has a five-year shelf life. However, with behaviors changing so rapidly, target segments can become outdated within 10-12 months. This results in billions of dollars in inaccurate or misplaced marketing spend. Additionally, segments used as media targets or “proxies” tend to get very removed from the actual consumers who took the segmentation. All of this translates to an ROI or velocity impact at shelf that is substantially diminished. But it doesn’t have to be that way.
At Ibotta Insights, we conduct segmentation based on 100% purchase behavior, then overlay attitudes and psychographics to round out the segments. We’ve branded this as the Ibotta “Vantage” Segmentation process. This is a substantial change versus the traditional approach and allows us to do a few things that are unique in the industry. First, segment identification is based on millions of POS (point of sale) data records. Once the initial segments are identified, updating target profiles is as simple as querying Ibotta’s database. As behavior’s change, we capture data and update target segments accordingly. No more outdated segments or spending budget to resurvey or analyze target profiles.
Second, this process maintains a direct relationship between the segmentation sample and targets for working media spend. More specifically, our segment sample sizes are in the millions, and each respondent has a unique and actionable deterministic ID for targeting purposes, which include hashed emails and MAIDs (Mobile Ad IDs). We then work with an industry leading modeling partner to provide tens of millions of additional IDs that fit within the target segment. The net impact of this approach is a greater efficiency in working media spend and significantly improved impact at shelf. No more proxies for targeting based on keywords – Ibotta turns the segmentations into a scalable, targetable audience.
P2PIQ: What type of in-market impact is this having for your clients?
Schaff: Overall our clients are seeing substantial year-over-year increases in household penetration, buy rate and most importantly, repeat. The degree of impact is different for every client based the level of spend and tactics they are using, but the ROI impact is positive across the board.
P2PIQ: Why aren’t there more companies conducting segmentation with this type of methodology?
Schaff: I think it comes down to our overall data asset and access to verified buyers. Ibotta has invested almost a decade into building strong relationships with both manufacturers and retailers. These efforts have yielded millions of highly engaged users who leverage Ibotta to find new products in-store while also getting cash back in their wallets every day. The high degree of loyalty from our user base coupled with omnichannel coverage is why our data asset is so strong. Ultimately, this enables us to complete complex research methodologies and impact shopper behavior in-store in a rapidly changing marketplace.