What is a Purchasegraphic and Why Should You Care?

July 12, 2016 Posted by - CMO

Demographic-based audiences assume that everyone within a particular age range or gender spends in the same way. But, that’s simply not the case.

dem·o·graph·ic: a segment of a population having shared characteristics

Consider this scenario: Three women fall into the 18 – 34 age range with an annual household income of $50,000. Based on demographic data, an athletic apparel retailer targets all of these women with a digital campaign. The retailer has to market to a large group to reach the smaller sub-segment that is interested in health and fitness. And, they miss some of their top customers who spend a lot with them and in the category because they aren’t women 18 – 34. The campaign produces a lot of marketing waste and doesn’t deliver significant return on investment.

As an alternative to demographics, at Cardlytics, we live instead by Purchasegraphics™ – segmenting that uses past purchases as a predictor of future purchases.

pur·chase·graph·ic: a segment of a population having shared spending habits based on actual past purchase data

When you target the above athletic apparel campaign using purchasegraphics, the results change. By layering in purchase intelligence based on where each of these women spend, you get a fuller picture of the consumer. Now, the three women who looked identical at the outset are unique. One spends heavily on fashion, another is a frequent traveler and the other is a health enthusiast. With this intelligence, the retailer can more precisely target its campaign to reach female health enthusiasts based on actual spending at similar retailers.

purchasegraphic_finalWe help clients apply these purchasegraphics both within our native bank advertising channel.

The retailers we work with see a much greater return on their marketing spend when they add purchasegraphics to their multichannel approach. To quantify the return of purchasegraphics within our native bank advertising channel, we commissioned Forrester to do a Total Economic Impact study of our purchase-driven marketing. They found that a composite organization based on interviewed Cardlytics customers received $6 in incremental return for every $1 spent with Cardlytics versus $1.50 in incremental return for every $1 spent with traditional media (digital, print, TV and video) – a 400 percent performance improvement.

As marketers, we’re always striving to move toward deterministic targeting (knowing for certain that we’re reaching the right people) and away from probabilistic targeting (assuming that someone is the right audience based on demographics, surveys or other proxies). Purchasegraphics help us get closer to that goal.

Interested in learning more about how purchasegraphics can help you make your marketing more targeted and relevant? Read more here