Businesses to target digital personas
MONTREAL - Businesses may soon have the option of using consumers' digital personalities to tailor online ads and offers, rather than relying on traditional demographics.
Demographics — age, income, gender, race — have been used for decades in marketing but, as shopping moves online, the amount of personal information that retailers can collect from consumers is playing a larger role.
A study by Global payments company MasterCard has created five "digital personas" it says consumers around the world, including Canadians, adopt when they go online. These personas categorize consumers by how much information they want to share and what they expect in return.
For example, 21 per cent of those surveyed are "open sharers" who are regularly online and expect deals in return for giving personal information such as financial status, phone numbers and social insurance numbers.
Another 21 per cent, called "simple interactors," includes some of the most dedicated social network users although they are not particularly tech savvy. They will share their personal data but most of them still prefer to shop in stores, which may make targeted ads less relevant.
E-commerce expert Tim Richardson said companies are realizing the best way to increase business is not necessarily with new customers but to get their existing ones to buy more.
"It's not for you, it's for them. It's going to decrease the likelihood that they're going to make a mistake in offering you something," said Richardson, who teaches e-commerce and Internet marketing at the University of Toronto and Seneca College.
The five-month, worldwide study of 9,000 online shoppers was done by MasterCard to gather information for its bank and retail customers.
"If you can make an offer compelling enough, you can get information from consumers which is going to help you make more targeted offers," said Theodore Iacobuzio, vice-president of MasterCard's global insight group.
A retail website using the personas could show products, offer loyalty points and discounts to shoppers visiting the site, based on their online personalities.
But there are limits to what people will share online.
One digital personality singled out in the study involved consumers who are highly aware of targeted marketing but the most guarded of their privacy. They comprise 17 per cent of those surveyed.
Associate professor Ken Wong of Queen's University said that consumers, at some point, may push back.
"You may not want all of the details of your life revealed. To some extent we are what we buy," said Wong, who teaches at Queen's University School of Business in Kingston, Ont.
With businesses already using data analytics and demographics, adding digital personalities to the mix may not make a difference.
"At the end of the day, it's not going to make online ads any more engaging," said Raymond Pirouz, who teaches marketing at Western University's Ivey School of Business.
"It's still a snapshot. All they have is a snippet of what you've done," Pirouz said.
The other digital personalities defined by MasterCard are shoppers who mostly use the Internet to do research before buying but have a low awareness of targeted marketing. Passive users spend the least amount of time online of all the personas but are more willing to trade data for something in return.
More than 9,000 online consumers from nine countries, including Canada, were surveyed between November 2012 and March 2013. Participants were between the ages of 16-65 who engaged in some type of online activity at least once a week.
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