Dubai: For any ecommerce site, it’s no longer enough to attract eyeballs to the portal. They have to make sure the browsers actually stay long enough to buy something. And if that doesn’t happen and the viewer skips to another, the website still can “chase” them through customised offers put together in a matter of seconds.
This is where algorithms and the companies that do the hard computing come in.
“It’s more or less the average that 95 per cent of traffic on an e-commerce site leave without actually purchasing anything,” said Dirk Henke, managing director of Emerging Markets at Criteo, which crunches through as much as 230 terabytes of data each day and handles 15 million requests per second.
“Many of a portal’s visitors could just be comparing prices between sites and have no intention to buy,” he added.
“But in a marketplace with many competing e-commerce players, and the UAE is one such, it’s never enough for portals to say they have had high traffic. There has to be an optimum conversion into sales from the traffic generated.”
What the patented Criteo algorithm does is create a profile of the viewer’s interests based on his or her browsing history based at an e-commerce site.
And from the moment, the viewer skips to another site, such as one for news or entertainment, the Criteo data creates highly targeted display ads matching the viewer’s browsing interests.
“Within those searches, the algorithm instantly recognises you and what sort of products have the highest likelihood of drawing your repeat interest,” said Henke.
“The display ads will only show the most relevant products and offers from the ecommerce site you have just visited. It could be complementary or even alternatives, but these are the products with the highest probability for a buy.”
All of this happens in real time... around 20 milliseconds to be precise. The algorithm doesn’t just stop there — it can narrow down further to the bare specifics. “The most recent search will always be the most relevant... there’s no point in a display ad showing something that the browser might have already bought,” said Henke.
But doesn’t such close scrutiny of browsing history cross some grey zones related to privacy? Henke replies in the negative.
“We only deal in [information] stored within cookies and based on our agreements with our client portals. At no point do we track the IP addresses.”
That the Gulf markets are still building up scale in ecommerce is what everyone agrees upon. According to a new trend report by UM Mena, ecommerce within the Middle East and North Africa territory could have touched $15 billion by end 2015. This is against the $425 billion put together via brick-and-mortar sales.
But even as the commerce market keeps adding up the growth numbers, customer loyalty tends to come at a high premium.
“Technology has altered the consumer journey,” says the UM Mena report. “The neat funnel from awareness to loyalty has evolved into a sort of flight plan as shoppers dart back and forth between stores, online review sites, word of mouth and traditional ads.
“In Mena [the Middle East and North Africa], as internet and mobile penetration reach record highs, it’s now a matter of e-tailers catching up, especially on the user experience front.’
This is where a Criteo algorithm — and similar ones in the market — can help e-tailers come up with strategies to bind them closer to their customers.
In 2014, Criteo analysed sales transactions worth $430 billion (Dh1.58 trillion), while from April 2014 to March 2015, it achieved $19 billion in post-click sales for its clients. Criteo now stores more than 20 terabytes of data daily, including actual purchase behaviour.
But aren’t ad blocking apps likely to hit the big data bandwagon? According to Henke, “It could be a challenge for a while. But we don’t see vast numbers of consumers willing to give up on free content for the sake of data [privacy]. That content remains free because content owners can monetise that data.
“But the issue remains a work in progress.”
