The concept of personalization is not new. Marketers have long known that personalizing communications to consumers yields higher returns. So, why are marketers still trying to figure out how to personalize at scale, answers Richard Jones, CMO, Cheetah Digital.
If someone remembers something about you from prior interaction, you are more likely to let your guard down a bit, let them in a little faster, and pay more attention to what they have to say. The same thing goes for brands communicating with consumers. â€œPersonalizationOpens a new window â€ is not a new concept. Marketers have long known that personalizing communications to consumers yields higher returns. Instapage foundOpens a new window personalized shopping cart recommendations influenced 92% of shoppers online to buy products. And as we transitioned into 2021, top marketers notedOpens a new window personalization is do-or-die.
So, why are marketers still trying to figure out how to personalize, beyond the first name, at scale? Here are three reasons.
1. A Reliance on Third-Party Data and Walled Gardens
Back in 2019, Marc Pritchard, chief brand officer, P&G, called timeOpens a new window on walled gardens Google, Amazon, and Facebook for their lack of transparency in ad reporting. Today, we are still seeing marketers spin their wheels with these platforms, trying to hack the algorithms and reach their consumers. Clicks and views are just vanity metrics. They do not measure engagement which is what is really important. It is a futile battle with no reward, just like using third-party data that is outdated and full of errors.
Both advertising with behemoths and using third-party data started off well-intentioned. But they have increasingly led marketers down the wrong path â€” one in which they cannot really tell which strategies are working, nor who their consumers really are. This is the goal at the end of the day: understand consumers for better personalization.
2. A Shortage of Tools and Tech To Gather Zero-Party Data
Zero-party dataOpens a new window will halt marketers’ reliance on walled gardens and third-party data. Demographic and psychographic data coming straight from the consumer? It does not get much better in the eyes of a marketer. So, how to gather it?
Marketers already have a plethora of tools at the ready-to-target consumers across many channels. But, how many can also execute campaigns to gather zero-party data? Marketers need to be enabled with the right tools to enact the interactive campaigns that zero-party data collection requires. Building experiences that provide value in exchange for the consumer’s data is the most crucial part. Whether it is a giveaway, a contest, or a personalized experience, marketers need to provide the right value to their consumers to be able to capture the data they need.
3. Inaccessible Data
Customer data means nothing if it cannot be accessed or acted on. Organizations with huge data lakes must prioritize putting data in a format in which it can be used. Otherwise, they will risk falling behind competitors because marketers cannot effectively communicate with customers. I also note that data should be able to be acted on within a martech solution because this is where many CDPs fall short. A traditional CDP does not meet the needs of marketers without extensive integration or a hand from the IT department. Marketers need solutions that not only ingest data but make sense of it for the marketer â€”Â not the IT team. Then, the solution should enable the marketer to act on any data by creating customer segments or new campaigns. This way, the marketer can build a relationship with the consumer that actually lasts.
Personalization is the key to long-lasting relationships between brand and consumer. Marketers need to accept the new year as a reason to stop making excuses for poor customer engagement. Ditch the walled gardens and third-party data. Get a solution to start collecting zero-party data. And, make sure once you have the data that you can use it.
Brands that adopt the right technology to support efforts around zero-party data will see success as we see more and more limitations around consumer privacy. The paradigm is shifting: it is zero-party data or become obsolete.