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Personalization and Privacy Trends Highlight Need for Data Strategy

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As data brokers, the AccuList team keeps a close eye on the many issues affecting the data strategies of our direct marketing clients. Data privacy is going to be one of those issues. While many of our U.S. clients are not affected directly by the European Union’s General Data Protection Act (GDPR), U.S.-based consumer-data privacy efforts have now resulted in the California Consumer Privacy Act (CCPA), with other states likely following that model and federal legislation on the horizon. Regulation is only one of the data complications facing marketers now that omnichannel data personalization has become essential for targeted response and ROI. So what strategies will help prepare for data market changes in 2020?

Data Privacy Demands Customer Focus Across Silos and Sources

Companies face complicated decisions when combining first-party data collection, user-level data from the big digital platforms (Google, Facebook and Amazon) as well as second- and third-party data in ways that balance consumer privacy with smart (and customer-demanded) personalization. A post in AdExchanger by Briggs Davidson, a senior manager at Deloitte Consulting, outlined some key steps for coping with a marketing data landscape that now includes regulation like CCPA. He advises starting with a focus on the customer in collecting, organizing, storing, and activating data across all silos that may need to meet data-privacy compliance, such as marketing and IT. Then when it comes to first-party data, prepare to shift marketing strategies to ensure consumers have a reason to share their data, delivering value to build trust. Davidson predicts creation of data clean rooms, or a separate analysis space for combining first-party data with platform-level customer data under strict privacy controls before usage. Marketers also will need an even closer embrace of media analytics to support a unified customer view, and use of new tools, such as Google’s Ads Data Hub. Finally, marketers will need multidisciplinary teams—for example Google’s upcoming restrictions on DoubleClick ID will boost the need for tech pros for unified customer views within Google—as well as partner collaboration in collecting and storing customer data.

Personalization Power Is Driving Marketing Data Trends in 2020

Hyper-personalizaton is expected to drive data marketing in 2020, according to a useful infographic put together by European digital platform firm Qualifio, which found that 83% of marketers say creating personalized content is one of their biggest challenges. Why? Because personalization now requires: 1) new tools to collect and analyze first-party data for compliance with data privacy regulations like GDPR and CCPA; 2) an omnichannel purchasing journey and analytics for a single customer view; 3) incorporation of new technologies such as voice search (50% of Google searches are expected to be voice searches in 2020); and 4) meeting rising customer standards for personalized promotion and service. In fact, 70% of the customers surveyed want an immediate response to their questions or complaints, which is fueling artificial intelligence  (AI) and machine learning (ML) initiatives. Marketers surveyed are already moving to meet personalization challenges, with 78% of European companies completing a GDPR compliance assessment and 65% using omnichannel efforts to personalize customer journeys, per Qualifio’s data. For those U.S. marketers still hesitating to commit to personalization, check out these statistics on improved response, ROI and brand loyalty for e-mail, mobile, e-commerce and digital ads. Direct mail personalization, from name-only to variable images and text, has a proven track record of success, too; in fact, a 2019 survey by NAPCO Research found 44% of responding marketers said personalized direct mail increased response, on average, by 16%.  

Data Quality Key to Privacy, Personalization, New Tech Initiatives

Data quality will be even more key to data strategy in 2020. It is paramount in meeting consumer data privacy regulations, for example, where validated contact data is required to avoid consequences ranging from compliance penalties to brand damage. Effective omnichannel, targeted marketing also requires data quality. A Forrester Consulting July 2019 report revealed that while 82% of companies place a high priority on refining data quality, more than a quarter of all marketing campaigns were hurt by substandard data in the last 12 months. Plus, the high-tech analytics and artificial intelligence (AI)/machine learning (ML) that marketers count on to boost personalized customer interaction also depend on data quality. A majority of enterprises engaged in AI/ML initiatives (78%) say these projects have stalled—with data quality as one of the culprits for 96%—according to a new study from Dimensional Research. That’s why CMO Kristin Hambelton, of Marketing Evolution, urges marketers in a recent Forbes magazine post to take these basic steps for improved 2020 data quality: 1) prioritize data quality and create a comprehensive initiative that includes not only processes and technology but defined positions responsible for data verification, collection and cleansing policies; 2) define and verify high-quality data in terms timeliness, completeness, consistency, relevance, transparency, accuracy, and representativeness; 3) organize disparate data sources with unified marketing measurement, breaking down silos to develop a holistic customer view across sources and channels, and to form actionable insights. 

 

 

Many Business Publications Fail to Fully Mine Audience Data

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Business periodical marketers come to AccuList USA for help with audience building via multi-channel campaigns. But as data experts, we’d like to remind them that their audience data offers other revenue streams worth mining. Most publishers know that targeted audience data is key to competing for ad dollars; for improved subscriber response via personalization; and for better targeted content marketing, but a recent Adweek article by Jason Downie suggests several other ways to monetize audience data.

Building Valuable Off-the-Shelf Audience Segments

Downie urges publishers to build “off-the-shelf” audience segments that can be sold directly to advertisers, for example. Consider how a seminar promoter could use a business magazine’s data if the publication built an audience of people interested specifically in his topics or proven seminar buyers; the advertiser would be able to enjoy the benefits of tapping not just a business-engaged audience but a strategically targeted set of potential buyers more likely to convert. By creating off-the-shelf audience segments, the publication offers more options for ad clients and more targeted impressions from high-value users. Audience segments can also offer insights that can be further monetized. For example, analytics could show that seminar attendees are four times more likely to share content online. That makes them online influencers, and since influencers are extremely valuable, the publisher can demand a higher CPM. Additionally, an audience segment can open the door to new advertisers and marketers, including non-endemic spending. A business publisher’s analytics may show a subscriber segment visits golf sites as well as the magazine site, for example. The publisher can now woo clients looking to target “golfers.”

Using Data to Win RFPs

Another way publishers can take advantage of data is in the RFP process, according to the Adweek article, noting that the average publisher spends up to 1,600 hours per month, or 18% of revenue, responding to advertiser RFPs. Publishers can develop a customized response to an advertiser RFP, starting with first-party data to build out the RFP-requested audience and then enriching that database with third-party data appending. Digital campaigns can expand targeting by adding lookalikes. Author Downie advises running a portion of an ad campaign without audience or contextual targeting to identify additional audiences, interests, actions and behaviors of those who respond well to the campaign but were not included in the initial targeting.

Turning Data Into New Revenue Streams

Another option for publishers with high-quality audience data is to sell it as “second-party data.”  The data can be sold either directly to another company through a second-party data exchange or through a programmatic data exchange. Second-party exchanges are popular because they are private marketplaces one-to-one with another company, versus an open environment. And, of course, subscriber lists can be monetized as “third-party data,” earning regular rental revenue on the open market and via data brokers. For more detail, see the full article.

What Data Questions Should Agency Agreements Address?

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As a data broker and data services provider, AccuList USA knows first-hand that the era of “big data” has created both greater opportunities and greater complications for marketers in terms of access and use of data. In fact, Advertising Audit and Risk Management (AARM), a North American provider of independent advertising audit and consulting services, recently urged advertisers and marketers to review agency contracts to make sure they address evolving “big data” issues.

Unanswered Data Questions Leave Risky Gaps

Data can drive a precisely targeted marketing strategy by leveraging insights from transactional and customer behavioral data–assuming that the advertiser/marketer has the right to receive and use that data. Based on their experience, AARM cites at least six key, but often unanswered, data questions that advertisers should cover in contracts. Those questions include:

  • Who owns the data?
  • Where is the data stored?
  • For how long?
  • How secure is the data?
  • Is the data kept separate from that of other advertisers?
  • Is your data being used to aid other advertisers?
Everybody Wants to Claim Valuable Data

AARM points out that data ownership is not automatically ceded to an advertiser or marketer despite investment in a media buy generating a data stream. Many within the media chain may try to claim the generated data: Ad agencies, trading desks, publishers, demand-side platforms, and third-party ad servers all may seek unrestricted access, if not ownership, of valuable customer data. That’s why marketers and advertisers need to be sure that legal agreements clearly and consistently spell out data ownership rights, privacy considerations and third-party access rights.

Guarding First-, Second- and Third-Party Data

Ownership and access to third-party data–often sourced from agencies and ad tech providers–is usually clearly spelled out in licensing agreements between stakeholders. But AARM notes that advertisers also need to be careful that second-party data, meaning information gathered indirectly from users via an advertiser’s relationship with another entity (such as an SEO platform or behaviorally targeted digital display ad), is used or shared in a privacy-compliant manner.  Advertisers must guard their first-party data, too, AARM cautions. For example, there are data privacy and security risks for first-party data used in programmatic digital and addressable TV buys, where unregulated, unsupervised use could violate privacy rights.

For AARM’s article, “Big Data. Big Deal. You Bet,” see https://marketingmath.aarmusa.com/2016/12/05/big-data-big-deal-you-bet/

Study: Brands Fail to Recognize Customers Across Channels

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Just 9% of marketers say they can consistently recognize customers across media channels, according to the MediaPost report on a new white paper published by the Data & Marketing Association (DMA). The study, conducted by Winterberry Group, is based on interviews with marketers from about 120 organizations.

Marketing to Devices, Not People

Per the MediaPost story, the study did find that companies have improved how they provide the same brand experience across channels, with slightly more than 77% of participants claiming to coordinate the delivery of content across all the media channels extremely well, fairly well or to some extent. But since most companies are marketing to devices not people, the challenge has been recognizing the same customers as they cross devices, for example going from search to catalog, or from mobile to in-store. Companies do realize that there is a problem per the survey, with some 72% of those participating identifying audience recognition as a “moderate” or higher priority.

The Need for Data Management

And when asked what would help to advance their organization’s efforts to better recognize addressable audiences across marketing media, better aggregation and management of data, cited by nearly 48% of marketers, led the top five solutions. Better integration of existing marketing technology followed as a solution for 39.5%; better systems and processes to connect audience profiles was listed by 38.4%; more first party data was the choice of 33.7%; and higher quality first-party data was named by 26.7%. Given those statistics, it’s not surprising that AccuList USA has seen growing interest in its data services, including customer database development, hygiene and analytics.

For more statistics from the study and for a link to download a free white paper copy, go to the MediaPost article at http://www.mediapost.com/publications/article/289223/brands-cannot-recognize-their-omnichannel-customer.html