Personalization Is a Real Problem for Marketers

Marketers have a personalization problem.

For several years, experts, industry reports and blogs have been insisting that personalization is pivotal for successful digital marketing campaigns.

Lately, though, it’s feeling a bit less pivotal.

Before I go there, I’ll admit that the fervor hasn’t been unfounded. Look at some of the data that emerged a few years ago. In 2017, a report from Infosys revealed that 74% of customers were frustrated by website content not customized to them, while 59% said they rely on personalization to sway their purchase decision.

That same year, Forrester revealed that 77% of consumers said they had chosen, recommended or paid more for a product or service from brands that provided a personalized service or experience. Epsilon similarly found that 80% of consumers were more inclined to buy from such companies.

According to one commonly cited surveyOpens a new window , nearly all marketers (96%) agreed that personalization is critical to advancing customer relationships.

Three years later, though, I’m sensing that personalization hasn’t quite taken over the marketing mainstream as many had predicted. In fact, Gartner released a reportOpens a new window last year predicting a sector-wide shift away from personalization, even projecting that as many as 80% of marketers will drop such efforts by 2025.

What changed?

Privacy issues

Between consumer demand for more privacy online and the limitations brought by recent privacy laws, there’s been growing opposition to identity resolutionOpens a new window , a key technology powering personalization capabilities.

Indeed, laws such as the General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA) have raised the associated costs, placing increasing pressure on marketers to prove ROI. However, according to Gartner, lack of ROI is one of the key factors that will push the sector away from personalization.

Meanwhile, consumers don’t even seem to know what they want. Software company Episerver recently conducted a surveyOpens a new window of online shoppers, finding that while more than half (53%) expected brands to prioritize online anonymity, 61% still said they also wanted brands to focus on personalization as much as they did in 2019.

Not only must marketers walk the fine line between just-enough-but-not-creepy personalization — that line differs from individual to individual.

Risk and reward

Ultimately, I’d argue that the growing aversion to personalization is a question of risk and reward.

When done right, we know it converts. The issue is that it’s increasingly expensive, difficult to get right and can have some nasty consequences when done wrong. As I’ve warned in previous articlesOpens a new window , over-the-top, intrusive communications can alienate consumers, damage engagement levels and negatively impact ROI.

Gartner, for instance, says that nearly 40% of consumers will stop doing business with a company if they feel that the personalization efforts are “creepy.” For some, this could be a text message from a brand or retailer as they walk past a brick-and-mortar store; for others, it could be seeing ads on social media for products they’ve looked at previously online.

Getting consent

Undoubtedly, there’s market demand for personalization. We also know for a fact that it can work. In many cases, it’s simply a question of consent.

As Marshall Lemon, Content Marketing Manager at Fluid PR Group, writes, getting consumer opt-in is “the safest way to ensure that even mistargeted ads are well received,” advising that “when using a customer’s personal data, it’s almost always better to ask for permission than for forgiveness.”

With that request, the consumer is offered the choice whether to trust the marketing. That’s an important safeguard to ensure you target the 80% of consumersOpens a new window who appreciate personalized experiences while respecting their privacy concerns.

At the same time, it’s imperative that marketers can prove that the consumer data they collect is safe.

In short, personalization is a tool to reinforce brand and company value that nourishes your ultimate goal: Providing each individual with a tailored experience that shows her needs and wants are being anticipated and met, while also reassuring her that her data is safe.