Dunnhumby's loyalty rewarded with Tesco advertising rights

Dunnhumby, the marketing and database company behind the Tesco Clubcard, has broken into advertising by striking a major deal with the supermarket giant.

Dunnhumby started working with Tesco in 1995, helping the retailer to build a detailed profile of its shoppers through the Clubcard loyalty scheme. This enabled Tesco to target customers with promotions and marketing, and is widely seen as being a key factor in its success.

Over the years, the chain has also invested in Dunnhumby, which was founded by husband and wife Clive Humby and Edwina Dunn.

And in the last deal, raising its investment from 53 per cent to 84 per cent, Tesco agreed to hand over all rights to advertising in its stores to Dunnhumby. This includes in-store television and radio along with advertising spots on trolleys, posters and on-floor stickers.

"The stores are advertising environments," said Ms Dunn. "We can help [companies] target customers and then help them see what sales came out of it. We're pretty sure we will be able to reach consumers far more effectively than they have achieved thus far. Supermarkets tend to sell all their advertising in a very opportunistic way," she continued. "So the idea is to figure out how to make it all far more relevant for the consumer. We will be the first company that ever sells all the media in a targeted way like this." Ms Dunn added that Dunnhumby was now working with supermarket suppliers to help them come up with suitable advertising strategies.

The financial details of the Tesco deal were not disclosed.

Some have criticised the supermarket group's use of Dunn- humby, complaining that it is not right for a commercial organisation to hold such detailed information on shoppers. Ms Dunn, however, insisted that data was always collated on a group rather than an individual basis.