Merchandising trailblazer John Wanamaker once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.” Though Wanamaker’s success in targeted advertising came long before the digital age, I can guarantee that this statement resonates with many of today’s businesses.
We live in a connected world, and everything from a consumer’s browsing history and mobile devices, to their foot traffic and location gives businesses a window into their behavior. These data-rich insights have the power to pinpoint where marketing budget is being wasted; and yet, only 28% of marketers are using data to deliver personalized customer experiences across channels.
Why are marketers being swept away by this sea of data? In my conversations with marketing colleagues, I’ve seen several common roadblocks in building a data-driven communication approach:
Building the case for budget
2017 will go down in history as the year that overall digital ad spend surpassed television ad spend. And it’s about time. The number of consumers who have cut cable cords in favor of streaming services has been on the rise for over a decade, with Netflix reaching an astounding 50.85 million subscribers this year. Data has pointed to this shift in consumer behavior for years, and yet only now are marketers turning their attention from television to digital channels.
Although marketing is perceived as a fast-paced, creative line of work, change management is one of the industry’s biggest obstacles. The marketer’s job is ultimately to drive revenue, and success is measured against annual KPIs. This is one of the reasons it took so long for digital ad spend to surpass television ad spend: a majority of businesses were basing their success on KPIs formulated when television was a mainstay. Building the case for a shift in these measurements is a challenge, as the initial change would offer no point of comparison from the year prior.
But in a world where consumer needs and interests are changing rapidly, businesses need to put more faith in forward-thinking data than ancient KPIs. In order to convince executive leadership to make these changes and to allocate budget elsewhere, the numbers behind consumer behavior must be translated into a digestible narrative and used as a proof point.
The convergence of technologist and marketer
With the rise of mobile, everything down to a consumer’s foot traffic can be tracked and charted. In order to craft these numbers into effective communication with both internal decision-makers and external consumers, marketers must become technologists. Making the paradigm shift from purely creative to calculative ensures that marketing and advertising efforts reach and resonate with the target audience, saving companies time and money in the long run.
Case in point: Campbell Soup Company and The Weather Company. During the 2017 MMA Global CEO CMO Summit, they presented their “What’s for dinner?” campaign. Through IBM Watson, consumers were given the ability to ask a digital ad for dinner recommendations. Instead of spitting out one prefixed recipe, IBM Watson machine learning technology took a deeper look into the individual, gathering data on the weather in the person’s location, and even available ingredients. Based on this information, consumers were given a recipe personalized to their wants and needs in seconds. In addition to appreciating a delicious meal, these consumers likely also appreciated the contextual nature of their brand experience.
The power of partnership
In this day and age, all companies must become data companies. But this doesn’t mean that they should have to do it alone. The technology used to aggregate and organize consumer data makes the job easier, but determining how to best fit these resources into current business processes can be a challenge. As such, enterprise software providers must partner with marketers to ensure that they are able to quickly and efficiently pull rich insights from their solution. This goal can be achieved by offering businesses scalable, programmable interfaces to ensure that technology best aligns with their business goals, and the needs of their consumers. As landscapes in all industries continue to shift, having this kind of resource and flexibility will become vital.
The rise of IoT, machine learning, and AI will only continue in the next ten years, increasing the availability of consumer data, and shortening the feedback loop between company and consumer. Accordingly, it has never been more important for marketers to build the case for integrating these meaningful technologies into their strategy. Not only will the data generated enable the delivery of personalized experiences to consumers; it will allow businesses to one-up the great John Wanamaker by getting smarter in how and where they’re spending their money.