What’s top of mind for business executives going into 2022 and the year of the tiger?
According to a survey by Quartz, COVID-19 is on the list, but it’s last. The disruptive forces they will most focus on in the next 12 months include AI, new business models, technology and the environment. Interestingly for marketers, expectations of personalized products, services and experiences is tied for second place along with data privacy and security. That creates a paradox because the less data privacy there is, the better the personalization, so all companies must seek and find a responsible yet effective balance.
The obvious but by no means easy answer is “use your 1st party data.” Your users have interacted with you before, potentially want to hear from you, and fit the profile of your future customers. They are more likely to welcome relevant communications from you, and you can create personalized experiences and offers with confidence.
However, building first party is a bit like the old joke. A traveler stops a farmer and says “How do I get to Dublin?” to which the farmer replies “You can’t get there from here.” How can you build first party data without spending money reaching and potentially turning off people who don’t want to hear from you? And how do you lure them onto your platforms to collect their data in ways that respect their privacy, and give them something back in terms of utility or personalization?
And that’s where brands start to push the boundaries. Using 2ndparty data involves making a bet that someone else’s data is relevant enough that you can create personalized communications, and hope you are not ignored and that you engage them more often than you enrage them. And as long as you respect the data use policies of your data partner, you haven’t crossed the line from cool to creepy.
3rdparty data comes from aggregators and is at one further remove from the data owners, who sell their data. The quality of the data can be high or low, and usually a test and learn approach is needed to find out what creative, calls to action and targeting works best for your brand.
The oncoming disappearance of cookies heightens privacy and complicates personalisation. There are new ID solutions on the horizon, but there’s little doubt that as privacy increases, consumers will be more likely to have less personal and potentially mistargeted experiences.
Smart marketers will need to be increasingly innovative to achieve personalization and make sound judgement calls on data use while not losing competitive advantage.
