More and more in recent years, consumers have yearned for and demanded from the brands they support that they deliver more relevant and personalized advertisements and offers to them. And for the most part brands have tried to achieve this by leveraging their digital capabilities to provide more pertinent ads.
However in doing so marketers have had to tap into a considerable amount of personal data about these same customers. This access and use of data has in itself raised several red flags around the globe after several high-profile personal data breaches – including the Cambridge Analytica case with Facebook – created much consumer fear and concern.
This leads to a major conundrum for marketers – how to balance the consumer’s expectation for personalization with their equally significant concerns around the use of and privacy of their personal data.
The benefits of personalization
The benefits of personalization are fairly obvious once one looks at the shortcomings of mass market advertising, especially in the digital era. These ads, which have been around forever, have become even more popular in the age of the internet and email.
Consumers have become disinterested and desensitized to these ads over time, with more and more viewing them as simply annoying and irrelevant. The evolution of marketing personalization grew out of a need to produce more relevant and impactful ads for one’s audience, but later garnered more steam as a way to counteract the apathy associated with traditional digital ads.
The value of personalization has grown over the past few years as more marketers have recognized its many benefits. However, many have struggled with executing it, leaving many to question if and how personalization can be successfully implemented to deliver tangible results.
Where data management is going wrong
There are literally reams of data available today as the online and digital era has made it simple and cost-effective to collect information that, in theory, can be used to develop a more personalized approach to marketing.
So where has data management gone wrong and where have brands fallen short in using the available data to make better marketing campaigns? Much of the issue with ‘bad data’ relates to the use and purchase of third-party data from external sources. These data sources, which are often compiled from a variety of online sources, can be more prone to inaccuracies and errors.
How inaccurate can this data be? A recent study by data mining company Jebbit in conjunction with marketing automation provider Hubspot found that only 34% of personal data collected by a highly regarded third-party data vendor was correct! Troubling indeed as this suggests that two-thirds of your marketing decisions could also be invalid due to the use of incorrect data. How can you possibly make meaningful business decisions in such a scenario? And because this data is external to your company, it’s not likely being compiled with the same lens as you would, leading to further limitations.
Consumers are also getting “creeped out” but the stalking-like mentality of retargeting and other forms of digital ads. Many also believe these ads are often poor indicators of future purchase decisions as they’re simply a reflection of past browsing history and nothing more substantive.
How brands can improve their personalization efforts
The risks and limitations of third-party data have been well-documented via countless events that have occurred in just the past 18 months. Brands need to understand that while third-party data is readily available and fairly cost-effective, it has many flaws, some which have documented in this post.
Given the concerns around quality and accuracy, we would encourage brands to assess the feasibility of collecting their own data and customer information, and to then use this data to analyze trends and preferences that can then influence business and marketing decisions.
Building your own customer and product data set now will enable you to make deeper, richer and more substantive decisions down the road. There is little doubt in our minds that data and data-driven decision making, when done well can be a competitive advantage for those companies that can translate this information into enhanced customer experienced and thus stronger ROI.
When this data can be used to anticipate and positively impact customer buying decisions while also enhancing customer satisfaction, brands will be on the road to truly making a difference in their market and setting themselves apart from their competition.
