As we inch closer to 2022, operating in an evolving marketing landscape, it is imperative for marketers to better understand their audiences. However – more often than not – a lack of data maturity is hampering success. A recent Forrester study, The Quest for Data-Driven Engagement, commissioned by Epsilon, highlights a myriad of challenges that the modern business faces today. Challenges that span the entire end-to-end data value chain, including merging all data into a single repository, keeping customer profiles refreshed, analysing data and finding actionable insights, and ultimately, put insights back into marketing and CX applications.
Faced with the immense scale of the mountain to climb it is no wonder marketers find themselves stuck. They invest 22 per cent of their budget towards technology-related initiatives, yet 72 per cent still find themselves struggling with the basics of turning customer insights into marketing actions.
The problem is that marketers need to stop thinking about their existing first-party data as some form of the Da Vinci Code to decipher and instead focus on creating their own ecosystem to understand their customers on their own terms.
Doing so will revolutionise the way they approach marketing.
Harnessing the power of first-party data
Marketers’ comfort zone of over-reliance on third-party cookies suggest they will let Google’s latest reprieve lull them back to a state of complacency. Research from Epsilon found a majority of marketers are “very” or “moderately” reliant on third-party cookies, with 67 per cent feeling pessimistic about the elimination of them.
The reality is that third-party cookies have always been convenient but flawed. They are not people-based and they do not accurately identify people over time. Their removal marks a new era in the marketing ecosystem.
The deprecation of cookies means that first-party data is now front and centre of any strategy. First-party data is pivotal in helping construct a clear, actionable view of customers across online and offline touchpoints. First-party data garners the highest return on investment of any data type, with the potential to do more to drive a competitive advantage and more accurate performance measurement.
However, the explosion of first-party data – though important – is only one piece of the puzzle. We need to look at getting back to basics – communicating with our customers on an individual level via a holistic marketing system.
How to pull competitive advantage from your marketing ecosystem/platform thinking/DTC
The real challenge marketers face is creating an ecosystem that maximises data to develop personal communication.
An ecosystem whereby any external marketing communication (e.g. website content, digital media, one-to-one CRM communication or large-scale marketing campaign) is crafted to drive more first-party data back into the system. A bespoke ecosystem designed to generate unique intelligence and continually enrich its end-to-end view of customers and their journey over time.
To visualise what this looks like, think of an ecosystem like an infinity loop; on one side, you have your acquisition strategies, primarily in paid channels, while on the other side you have your direct strategies on your owned channels. In the centre, you have your identity strategy, or first-party data.
Now, picture your target audiences continually spinning around the loop. From the moment you acquire them in a paid channel, you learn from their interactions before bringing them to your owned platforms to continue the dialogue. Here, every interaction is used to learn more about them to later engage them again via paid channels to bring them back into your owned environments. And so on. When you apply your learnings from your own first-party data of existing customers, you will be able to offer better and meaningful experiences to new customers who are most likely to convert – thus saving you a leaky acquisition bucket, and lowering the cost of acquisition and making your marketing spends work for you.
The ecosystem method gives brands the ability to understand customer behaviours while continuing to communicate with them through paid and direct channels. In doing so, it allows brands to see their customers holistically, create unique data asset and use that data as a competitive advantage to help them to plan and execute marketing strategies to maximise the loop.
Brands can ultimately emerge from the transition away from third-party cookies with a stronger view of their customers than they’ve ever had before. But only if they stop viewing the change as a technology or data problem in isolation and start thinking about the entire ecosystem. Brands that are driven by first-party data and look at constantly improving their data centricity will naturally have an edge over competition and are in a great position to drive contextual and personalised customer experiences.
By: Adrian Farouk, CEO of Publicis Epsilon – ANZ.