By now marketers are pretty accustomed to reading about this age of ‘micro-moments’ and ‘hyper-personalisation’. As with all great technologies, personalisation has enjoyed its own hype cycle over the past few years, with leading voices including McKinsey joining the chorus and prompting even greater noise.
Those familiar with the hype cycle will know and recognise the period sometimes characterised as the ‘peak of inflated expectations’. It represents the highest point in the industry and media reception for a new product – where the possibilities are endless and success seems guaranteed. However, this stage is almost inevitably followed by the ‘trough of disillusionment’.
The sudden fall from grace is evidenced by the latest research from Rakuten Advertising, which uncovered just one in three advertising campaigns are personalised campaigns. In fact, the brains behind the concept of the hype cycle itself, Gartner, now predicts four in five marketers will have abandoned personalisation in five years.
Looking to find a cause for the disillusionment, Gartner points to a general failure by organisations to provide a return on investment (ROI) from personalisation. It’s worth mentioning at this point that Gartner finds personalisation efforts currently comprise just 14% of marketing budgets, digging a little deeper into this it becomes clear extraneous factors are at play.
The scarcity of data
In early 2019, with the dust settling from the arrival of GDPR, a Forrester report highlighted the problems marketers had begun to encounter with their personalisation efforts on account of the new rules around data privacy:
‘Some of the key challenges that retailers face are that they have limited data (i.e. only their own first-party data), they get infrequent visits even from their best customers, and their product catalogues are often small (i.e. a few thousand items).’
No surprise then that with challenges to accessing more data, many marketers are currently heavily reliant on content that cannot be personalised to suit the needs of specific consumers.
The trouble is this change gives rise to the misconception that personalisation and privacy are conflicting efforts, not symbiotic opportunities. Yes, GDPR has encouraged brands and vendors to review and in some areas curtail third-party data collection, but this doesn’t leave them dependent solely on data collected from customers. There are other sources of valuable, compliant data to tap into.
The trouble with ‘going it alone’
Through first-party data, advertisers know their existing customers, but discovering new ones and building enduring connections requires marketers to see beyond the four walls of their own CRM system.
This is where the power of the network comes into its own, opening up second-party data from trusted partners and publishers who have built and developed diverse audiences of their own. Through blogs, vouchers, videos and competitions, affiliate marketing has created a channel for brands where promotional material is consistently served to the right consumers as relevant, quality content.
These performance marketing campaigns have proven successful for brands focused on reaching and engaging new and existing audiences. It’s natural that brands will want to fuel the success of these campaigns with strategies designed to build enduring connections that reach new customers and sustain long-lasting loyalty. The coming months will see plenty of advertisers race to realise the potential of films, TV shows and even shorter form content as Advertising Video On Demand platforms open up the engagement potential of addressable TV audiences.
Bringing together proven performance marketing solutions with emerging media formats and consumer insights will push the entire industry forward by improving the efficacy of advertising. It gives brands access to the audiences, media, content, networks and consumer insights that create the right conditions to reach new customers and sustain long-lasting loyalty.
A new understanding of personalisation
Escaping the ‘trough of disillusionment’ is a learning exercise for advertisers. As Ed Jefferson states, ‘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’.
Right now, many critics would hasten to point out marketers are struggling to reach every individual across their entire target audience on all channels at all times. And they’d be right. Marketers have to rationalise their approach, making data-led decisions about who it makes sense to speak to, when and via which channels.
The secret sauce here is in technology. While they weren’t around when the conversations about personalisation were first aired, machine learning and automation are now providing publishers with valuable insights from consumers’ browsing and shopping behaviour, so they can fine-tune their strategies and make smarter, more personalised content-serving decisions in real-time.
Enabling advertisers to automatically alter the rewards they give publishers, based on the audiences and behaviours that drive their business objectives forward, empowers advertisers to assign sophisticated rules to their commissioning strategy and reach new-to-file customers.
In a rapidly shifting media environment, it’s never been more important to create compelling, relevant advertising experiences, but it is clear marketers need the guidance on how to make these truly fly for their campaigns. Success here comes down to debunking the myths around data privacy and investing in the right partnerships to bring new, hyper-relevant audiences in front of campaigns.