The Homa Files

Excerpted from The Wall Street Journal “Personalized Store Ads Take Off” by David Kesmodel, October 23, 2008

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For years, supermarket cashiers have handed shoppers coupons as they left the checkout aisle. These days, shoppers often get narrow paper strips printed with something else: ads related to the shopper’s own buying habits.

Recently, Stouffer’s has used such ads to encourage buyers of its single-serve frozen entrées to join its Dinner Club. Joining the club allows consumers to earn points for buying the Nestlé unit’s products. The points can be used to bid for rewards like TV sets and magazine subscriptions.

Targeted ads like these began appearing in some of the nation’s major grocery stores about two years ago, but big consumer-product companies like Nestlé, Coca-Cola and Kraft Foods are just starting to buy them in significant numbers, as they and other marketers put more emphasis on reaching the right consumer at the right time…

The company behind the ads is Catalina Marketing, a closely held marketing-services firm…Catalina, armed with data provided by retailers about shoppers’ buying habits, showed Stouffer’s that 6.7% of all shoppers accounted for 80% of its single-serve volume. So, Stouffer’s targeted ads at many of these regular buyers, bypassing those who hadn’t bought its products.

Catalina learns which shoppers buy a particular product by tapping into the vast reservoir of data retailers collect from customers who use loyalty cards. Stores offer such cards to their customers as a way of tracking their purchases, typically in return for discounts or access to special promotions…

GlaxoSmithKline has bought ads for its Tums antacid to target shoppers around holidays like the Fourth of July and Thanksgiving, when they tend to eat more heavily. Catalina serves up the ads to shoppers who have bought Tums in the past…

Still, the strategy isn’t foolproof.  Catalina says 80% of consumers read its coupons “most of the time.”

The service tends to be most effective in driving customers to buy more of a product or try a newly launched product.

It is less effective at getting shoppers to cross categories, buying a beverage, for example, from a manufacturer whose cereal they like. 

Edit by SAC 

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Full article:
http://online.wsj.com/article/SB122472576115361225.html

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