Yahoo uses Nectar database to improve targeting

By February 12, 2010Advertising, Yahoo!

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Tim Bradshaw has a piece in the FT today describing how Yahoo and offline loyalty card company Nectar are teaming up to help target display ads on Yahoo’s properties:

Online advertisers will be able to target shoppers based on their high-street purchases for the first time in the UK under a new scheme from Yahoo and Nectar.

The internet company and the loyalty card provider have signed an exclusive deal to combine their databases for customers who opt into the campaign.

Privacy buffs out there will note that this is opt-in only.  Nectar customers are given extra loyalty points if they opt-in and the number who do so will be an interesting indicator of the value people place on their privacy (to the extent this anonymised service is a privacy threat).

Beyond better targeting this deal offers advertisers the ability to see the impact their ads have on offline spending, which is automatically tracked by Nectar.  Apparently this is the first deal globally which will link online ad views with automatically captured purchase data.  This could be a very big deal, helping to drive FMCG ad spend online, which still accounts for only 4% of total online adspend.

Nectar covers a number of the largest UK stores, including Sainsbury’s, Homebase and BP.  They have 16.8m members, and 20,000 have signed up so far.

Some of the smarter people I know are talking about the general case of the first part of this.  That is taking lists of profiled people (cookies) and offering them to advertisers (probably ad networks) who can then generate higher CPMs and/or better click through by targeting against the profiles.  The business model might take the form of auctioning blocks of impressions from the list.  There might be a startup opportunity here.

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  • Iain Henderson

    I'm not convinced about this. Sure it is innovative in connecting offline data with online data, but connecting two weak/ patchy data sources does not make one strong one.

    Here's an example of what I mean:

    – over the weekend, my niece was down in London to see us, and stayed in a hotel with a Sainsbury's Local next door. I was in there quite a few times, buying all sorts of stuff and put it on my Nectar card, all stuff for a 10 year old that will show up in my transaction history.

    – and I joined up the Yahoo/ Nectar thing when it showed up a couple of months back; i've yet to see anything relevant come out of it (and given the above illustration), don't see much likelihood of that happening any time soon. (I have no incentive to go in and clean up their records).

    So yes it will make some marketing folks feel all innovative, and move some data and money around – but in terms of end user experience I won't be holding my breath.

  • Hi Iain – it will certainly be interesting to see the results.
    Tks,
    Nic

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