You can collect all the data in the world, but without the ability to understand it and act upon those insights, any attempt at personalisation will go to waste
Personalisation has been the holy grail of marketing, fine-tuning your customer data management so you can reach, on an individual level, the people who want your product at the moment they want it.
But a Gartner report, released in December, predicted that 80 per cent of marketeers will abandon personalisation by 2025. Is this really going to happen and, if so, what’s causing it and are there really no benefits of personalisation in marketing?
Gartner points to a failure by organisations to provide a return on investment (ROI) from personalisation, especially given the difficulties around storing personal information. Introduction of the General Data Protection Regulation and other potential legal minefields have made even understanding what digital marketing can and can’t do a huge task.
And even if you are compliant, consumers won’t necessarily trust that you are. A 2019 study by Oxford Economics found 64 per cent of people worldwide have concerns about personal data being misused.
Do marketing teams really ‘get’ personalisation?
Any rejection of personalisation may not be a failure of the concept, but a failure to understand how to use customer data management to increase sales. Marketing teams may have thought it seemed like the answer to all their problems, only to discover they didn’t really know what to do with it or how to execute successfully. Collecting, storing and using the data are all potentially difficult and costly exercises, and it’s easy to fall at any of those hurdles.
It’s also not necessarily the right tool in every situation. Digital marketer Michael Baggs says there can be problems when companies try to personalise before they’ve collected enough data. “If the data set isn’t large enough, the CPM [cost per thousand ad impressions] to reach that audience will likely be significantly higher than not running personalised ads and the ROI will be impacted,” he says.
Even if they have, or have partnered with someone to get, the right data in the right quantities, not all marketing teams have been set up to get the most out of it. “Most teams are generalists,” says Baggs. “They don’t often have a data scientist or behavioural scientist available to dig through the numbers and find insights.”
You can collect all the data in the world but without the ability to understand it, your customer data management isn’t going to do anything to increase conversions. The Gartner report suggests this is going to be increasingly recognised, predicting 25 per cent of marketing teams will have a dedicated behavioural scientist. So even if marketing is going to stop talking about personalisation, it’s still going to be using many of the same tricks, albeit under different names and in different ways.
AI will deliver a tailored user experience
As companies have found more opportunities to collect data from users, they’re coming up with increasingly clever ways of using it. Amazon have filed a patent for using their Alexa devices to detect illness from a change in tone of voice, as well as analysing and understanding the user’s emotional state. This can be used to suggest appropriate products, for example if Alexa thinks you have a cold, it will recommend you order some medicine.
Dragos Petria of marketing platform Ocean.io thinks machine-learning is going to be a key growth area for customer data management, citing Facebook’s Lookalike Audiences as an example of a new kind of customer engagement.
“Seemingly unrelated datapoints can tell Facebook when you’re most likely to purchase an item and serve you ads at the right time and place,” he says. “While this is not what we usually think of in terms of personalisation, I consider it to be the deepest level so far of personalised marketing, as the machine can tell what you need and when you need it.”
Although it might increase the potential benefits of personalisation in marketing, will feeding all this personal information into artificial intelligence and algorithms seem a little creepy at a time when trust issues are already bad enough?
James Fox, associate director at consumer research firm Canvas 8, says there are actually opportunities for brands to build trust using personalisation: “If advertisers are transparent about the fact that they are using data, people are more likely to respond positively to it because they feel empowered and because they feel understood,” she says. This could take the form of a symbol that indicates, “We know based on data you wanted to share that you care about the environment and that’s why you’re seeing this product”.
The basics of customer engagement aren’t going anywhere
While some marketing teams might be shying away from flashier forms of personalisation, there’s no doubt that the basic ideas behind it still have value. As Jo Barrow, creative director of EX.CO, puts it: “The idea behind personalisation – that customers deserve to be treated like real people and advertising should bring them value – isn’t going anywhere.” She suggests that as well as tried-and-tested methods for customer data management, brands could look at “creative solutions like interactive content tools”.
And doing the right kind of personalisation has clear value. A 2019 study reported that three quarters of businesses in Europe and North America had seen ROI on their efforts in this field. Certainly, there are teams that have so far failed to see the benefits of personalisation in marketing; not every sales technique is right for every product and not every brand has implemented it correctly.
It seems unlikely marketers will abandon personalisation in its broadest sense, even if it is not recognised as a headline strategy. More likely, the time of simply talking about personalisation is coming to a close and the real work of doing it right is just beginning.