Introduction to Transactional Data and Targeted Marketing
Have you ever noticed that after searching for a new pair of trainers online, ads for those exact trainers start following you around the internet? This isn't magic—it’s the result of transactional data and targeted marketing. In this chapter, we will explore how online businesses collect information about what we do and how they use it to encourage us to spend more money.
What is Transactional Data?
Transactional data is the information collected every time you complete a transaction (like buying something or booking a service) online. Think of it as a digital receipt that contains much more than just the price of the item.
What information is collected?
When you buy something online, the organisation usually collects:
1. Personal Details: Your name, delivery address, and email address.
2. Purchase Details: What you bought, the quantity, and the price paid.
3. Payment Information: How you paid (e.g., credit card or a third-party system like PayPal), though for security, the full card number is rarely stored in the transactional record.
4. Timing: The date and exact time of the purchase.
5. Digital Footprint: Your IP address and the type of device you used.
Quick Tip: Transactional data is not just about what you bought, but how and when you bought it. This helps shops understand your shopping habits!
How is Data Collected?
Businesses don’t just wait for you to buy something to learn about you; they track your journey through their website using several methods:
1. Cookies
A cookie is a small text file that a website saves on your digital device (like your laptop or smartphone) when you visit.
Analogy: Imagine a shop assistant giving you a sticker when you walk in. If you leave and come back later, they see the sticker and remember exactly which aisles you visited last time!
What do cookies do?
- They remember your login details so you don't have to type them every time.
- They keep track of what is in your online shopping basket.
- They track which pages you looked at and for how long.
2. Transaction Tracking
This is the process of monitoring the path a customer takes through a website before making a purchase. Companies want to know: Did you click an email link? Did you find them through a search engine? Which products did you look at before choosing the one you bought?
Targeted Marketing and Personalisation
Once a company has your data, they use it to make their marketing more effective. This is known as targeted marketing.
Targeted Marketing
Instead of showing the same advert to everyone in the world, businesses show specific adverts to people who are likely to be interested in them.
Example: If transactional data shows you frequently buy cat food, a company will send you adverts for cat toys, rather than dog leashes.
Personalisation Techniques
Websites use your data to change your experience and make it feel "personal." Common techniques include:
- Product Recommendations: "Customers who bought this also bought..."
- Personalised Emails: Sending you a discount code on your birthday or an email saying, "We noticed you left something in your basket!"
- Customised Content: Showing you news or products based on your location or past interests.
Did you know? Personalisation makes you more likely to buy because the website feels like it "knows" what you want, saving you time and effort.
Online Services vs. Local Services
As part of Topic 4: Online Goods and Services, it is important to understand how online shops (which use transactional data) compare to local physical shops.
Online Services (e.g., Amazon, Steam, Online Banking)
- Availability: Usually 24/7 access from anywhere with an internet connection.
- Personalisation: High. Uses cookies and data to suggest products.
- Selection: Can offer a huge range of products because they use large warehouses.
- Convenience: Goods are delivered to your door.
Local Services (e.g., a high street shop, a local bank branch)
- Physical Interaction: You can touch, try on, or see the product before buying.
- Instant Possession: You get the item immediately without waiting for delivery.
- Personal Service: You can talk to a real person for advice or help.
- Limited Data: Unless you use a loyalty card, the shop has very little "transactional data" about your browsing habits compared to an online store.
Don't worry if this seems like a lot! Just remember: Online stores use cookies to follow you, transactional data to record what you do, and targeted marketing to try and sell you more.
Quick Review: Key Takeaways
1. Transactional Data: The detailed digital record of a purchase (items, price, date, personal details).
2. Cookies: Small files on your device that help websites remember you and your preferences.
3. Targeted Marketing: Sending specific ads to specific people based on their data.
4. Personalisation: Tailoring a website's content to a specific user to improve their experience.
5. Online vs. Local: Online offers 24/7 convenience and personalisation, while local services offer physical contact and immediate access to goods.