Five Principles of Modern Marketing

Every marketer and media company these days is trying to unlock the secret to personalization. Everyone wants to be the next Amazon, anticipating customer wants and desires and delivering real-time customization.

Actually, everyone might need to be an Amazon going forward; Harris Interactive and others tell us that getting customer experience wrong means up to 80% of customers will leave your brand and try another – and it takes seven times more money to reacquire that customer than it did initially.

How important is personalization? In a recent study, 75% marketers of marketers said that there’s no such thing as too much personalization for different audiences, and 94% know that delivering personalized content is important to reaching their audiences.

People want and expect personalization and convenience today, and brands and publishers that cannot deliver it will suffer similar fates. However, beyond advanced technology, what do you need to believe to make this transformation happen? What are the core principles a company needs to adhere to, in order to have a shot at transforming themselves into customer-centric enterprises?

Here are five:

Put People First

It’s a rusty old saw but, like any cliché, it’s fundamentally true. For years, we have taken a very channel-specific view of engagement, thinking in terms of mobile, display, social and video. But those are channels, apps and browsers. Browsers don’t buy anything; people do.

A people-centric viewpoint is critical to being a modern marketer. True people-based marketing needs to extend beyond advertising and start to include things like sales, service and ecommerce interactions – every touchpoint people have with brands.

People – customers and consumers – must reside at the center of everything, and the systems of engagement we use to touch them must be tertiary. This makes the challenges of identity resolution the new basis of competition going forward.

Collect Everything, Measure Everything

A true commitment to personalized marketing means that you have to understand people. For many years, we have assigned outsized importance to small scraps of digital exhaust such as clicks, views and likes as signals of brand engagement and intent. Mostly, they’ve lived in isolation, never informing a holistic view of people and their wants and desires.

Now we can collect more of this data and do so in real time. Modern enterprises need to become more obsessive about valuing data. Every scrap of data becomes a small stitch in a rich tapestry that forms a view of the customer.

We laughed at the “data is the new oil” hyperbole a few years back – simply because nobody had a way to store and extract real value from the sea of digital ephemera. Today is vastly different because we have both the technology and processes to ingest signals at scale – and use artificial intelligence to refine them into gold. Businesses that let valuable data fall to the floor without measuring them might already be dead, but they just don’t know it yet.

Be A Retailer

A lot of brands aren’t as lucky as popular hotel booking sites. To book a room, you need to sign up with your email. Once you become a user, the company collects data on where you like to go, how often you travel, how much you pay for a room and even what kind of mattress you prefer. Any brand would kill for that kind of one-to-one relationship with a customer.

Global CPG brands touch billions of lives every day, yet often have to pay other companies to learn how their marketing spend affected sales efforts. Brands must start to own customer relationships and create one-to-one experiences with buyers. We are seeing the first step with things like Dash buttons and voice ordering, though still through a partner, but we will see this extend even further as brands change their entire business models to start to own the retail relationship with people. The key pivot point will come when brands actually value people data as an asset on their balance sheets.

See The World Dynamically

The ubiquity of data has led to an explosion of microsegmentation. I know marketers and publishers that can define a potential customer to 20 individual attributes. But people can go from a “Long Island soccer mom” on Monday to an “EDM music lover” on Friday night. Today’s segmentation is very much static – and very ineffective for a dynamic world where things change all the time.

To get the “right message, right place, right time” dynamic right, we need to understand things like location, weather, time of day and context – and make those dynamic signals part of how we segment audiences. To be successful, marketers and media companies must commit to thinking of customers as the dynamic and vibrant people they are and enable the ability to collect and activate real-time data into their segmentation models.

Think Like A Technologist

Finally, to create the change described above requires a commitment to understanding technology. You can’t do “people data” without truly understanding data management technology. You can’t measure everything without technology that can parse every signal. To be a retailer, you have to give customers a reason to buy directly from you. Thinking about customers dynamically requires real-time systems of collection and activation.

But technology and the people to run it are expensive investments, often taking months and years to show ROI, and the technology changes at the velocity of Moore’s Law. It’s a big commitment to change from diaper manufacturer to marketing technologist, but we are starting to understand that it is the change required to survive an era where people are in control.

Some say that it wasn’t streaming media technology that killed Blockbuster, but the fact that people hated their onerous late fees. It was probably both of those things. Tomorrow’s Blockbusters will be the companies that cannot apply these principles of modern, personalized marketing – or do not want to make the large investments to do so.

[This article originally appeared in AdExchanger on 8/7/2017.]

DMPs are Dead. Long Live DMPs.

 

King

Much like latter day King of Rock and Roll, Elvis Presley, today’s ubiquitous data management platforms will eventually die as an independent buying category but live on in the greater consciousness. And karate. 

Gartner’s Marty Kihn recently made an argument that ad tech and mar tech would not come together, contrary to what he had predicted a few years ago. When Marty speaks about ad tech, people listen.

 

Like many people, when I read the headline, I thought to myself, “That makes no sense!” But those who read the article more closely understand that the disciplines of ad tech and mar tech will certainly be bound closer together as systems align – but the business models are totally incompatible.

Advertising technology and the ecosystem that supports it, both from a commercial business model perspective (percentage of media spend billed in arrears) and the strong influence of agencies in the execution process, has meant that the alignment with software-as-a-service (SaaS) marketing technology is not just an engineering problem to solve.

Marketing leaders and brands need to change the way they do their P&L and budgeting and reevaluate business process flows both internally and with outside entities such as agencies to ensure that even if the technology may be right, the execution needs to be optimal to achieve the desired results.

There are also plenty of technical hurdles to overcome to truly integrate mar tech and ad tech – most notably, finding a way to let personally identifiable information and anonymous data flow from system to system securely. While those technical problems may be overcome through great software engineering, the business model challenge is a more significant hurdle.

I remember getting some advice from AdExchanger contributor Eric Picard when we worked together some years ago. I was working at a company that had a booming ad tech business with lots of customers and a great run rate, operating on the typical ad network/agency percentage-of-spend model.

At the time, we were facing competition from every angle and getting disrupted quickly. Eric’s suggestion was to transform the company to a platform business, license our technology for a fixed monthly fee and begin to build more predictable revenues and a dedicated customer base. That would have meant parting ways with our customers who would not want to pay us licensing fees and rebuilding the business from scratch.

Not an easy decision, but one we should have taken at the time. Eric was 100% right, but transforming a “run rate” revenue ad tech business into a SaaS business takes a lot of guts, and most investors and management didn’t sign up for that in the first place.

This is a long way of saying that Marty is right. There are tons of ad tech businesses that simply cannot transform themselves into marketing software stacks, simply because it requires complete change – from a structural financial perspective (different business model) and a people perspective (different sales skills required).

[This post appeared in AdExchanger on 5/9/2017]

What is the future of DMPs?

In the 1989 film “Back to the Future II,” Marty McFly traveled to Oct. 21, 2015, a future with flying cars, auto-drying clothes and shoes that lace automatically.

What is the future of data management platforms? This is a question I get asked a lot.

The short answer is that DMPs are now part of larger marketing stacks, and brands realize that harnessing their data is a top priority in order to deliver more efficient marketing.

This is a fast-moving trend in which companies are licensing large enterprise stacks and using systems integrators to manage all marketing—not just online advertising.

As detailed in Ad Age (Marketing clouds loom), the days of turning to an agency trade desk or demand side platform (DSP) to manage the “digital” portions of advertising are fading rapidly as marketers are intent on having technology that covers more than just advertising.

Building consumer data platforms

A few years ago, a good “stack” might have been a connected DMP, DSP and ad server. A really good stack would feature a viewability vendor and start a dynamic creative optimization (DCO). The focus then was on optimizing for the world of programmatic buying and getting the most out of digital advertising as consumers’ attention shifted online, to mobile and social, rather than television.

Fast forward a few years, and the conversations we are having with marketers are vastly different. As reported in AdExchanger, more than 40% of enterprise marketers license a DMP, and another 20% will do so within the next 12 months. DMP owners and those in the market for one are increasingly talking about more than just optimizing digital ads. They want to know how to put email marketing, customer service and commerce data inside their systems. They also want data to flow from their systems to their own data lakes.

Many are undertaking the process of building internal consumer data platforms (CDPs), which can house all of their first-party data assets—both known and pseudonymous user data.

We are moving beyond ad tech. Quickly.

Today, when those in the market are considering licensing a “DMP” they are often thinking about “data management” more broadly. Yes, they need a DMP for its identity infrastructure, ability to connect to dozens of different execution systems and its analytical capabilities. But they also need a DMP to align with the systems they use to manage their CRM data, email data, commerce systems, and marketing automation tools.

Data-driven marketing no longer lives in isolation. After I acquire a “luxury sedan intender” online, I want to retarget her—but I also want to show her a red sedan on my website, e-mail her an offer to come to the dealership, serve her an SMS message when she gets within range of the dealership to give her a test drive incentive, and capture her e-mail address when she signs up to talk to a salesperson. All of that needs to work together.

Personalization demands adtech and martech come together

We live in a world that demands Netflix and Amazon-like instant gratification at all times. It’s nearly inconceivable to a Millennial or Generation Z if a brand somehow forgets that they are a loyal customer because they have so many choices and different brands that they can switch to when they have a bad experience.

This is a world that requires adtech and martech to come together to provide personalized experiences—not simply to create more advertising lift, but as the price of admission for customer loyalty.

So, when I am asked, what is the future of DMPs, I say that the idea of licensing something called a “DMP” will not exist in a few years.

DMPs will be completely integrated into larger stacks that offer a layer of data management (for both known and unknown data) for the “right person;” an orchestration layer of connected execution systems that seek to answer the “right message, right time” quandary; and an artificial intelligence layer, which is the brains of the operation trying to figure out how to stitch billions of individual data points together to put it all together in real time.

DMPs will never be the same, but only in the sense that they are so important that tomorrow’s enterprise marketing stacks cannot survive without integrating them completely, and deeply.

[This post was originally published 11 May, 2017 by Chris O’Hara in Econsultancy blog]