Loblaw looks to leverage loyalty data with online advertising business

Loblaw looks to leverage loyalty data with online advertising business


Canada’s biggest grocer is testing a new plan to profit off the consumer data it collects while reimbursing customers in the process.

The pilot project, to launch Wednesday, will see Loblaw Companies Ltd. ask members of its PC Optimum loyalty program agree to become the audience for online ads that Loblaw itself will serve up across the internet, based on what it knows about its customers.

In exchange, those members will get rewards points for each ad they see.

“It could be a banner ad for a shampoo on a news website,” said Uwe Stueckmann, Loblaw’s senior vice president of marketing. “When you see that ad, you’ll get some points. You don’t have to do anything. You don’t have to buy anything. You don’t have to click on anything.”

Loblaw insisted it would never share its data with third parties. Instead, it will act as a platform, only selling the right for brands to advertise to segments of its PC Optimum membership likely to buy their products.

Unlike other online advertising — which often considers things such as browsing history to divine whether a person might find an ad relevant, Stueckmann said the new campaign is “based on actual people buying real things in real stores — not their intent or not some website they’ve looked at or some other thing.”

Loblaw says it will be able to tell advertisers whether people who saw the ads actually changed their habits and bought the product at a Loblaw store.

“We’re looking at the sum total of all the people in the campaign,” he said. “How much dog food they bought before and how much dog food they bought after so that we protect the privacy of the individual consumer.”

Stuekmann wouldn’t say how many reward points PC Optimum members will receive for each ad — or whether they’ll get more for a pre-roll ad on a video than, say, a sidebar ad. (10,000 reward points can be redeemed for $10 in value at Loblaw stores.)

“In the beginning we will be a small fraction of the ads that you will see,” he said. “So it won’t be a large amount of points that you will get.”

This is happening on the Internet all the time anyways, every day, actually every nanosecond

Loblaw says it is already advertising to segments of its PC Optimum membership while they are browsing online, tailoring the content to their purchase history, Stueckmann said. The pilot is extending that ability to Loblaw’s “brand partners” — the manufacturers that sell products in Loblaw stores.

The ability to track those customers around the internet comes through digital advertising platforms, he said.

“We’re not tracking them around the Internet at all. The internet is tracking them around the Internet,” he said. “We’re simply connecting to the infrastructure the Internet has built.”

Stuekmann said the point of the project is to add transparency and reward consumers who typically aren’t included in the process, though their data often is.

“This is happening on the Internet all the time anyways, every day, actually every nanosecond,” he said, stressing that the program would be easy to opt out of.

“If you’ve opted out,” he said, “I would never serve you an ad. But somebody else will.”

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