This is a talk that The Drum Promotion Fix columnist and marketing keynote speaker Samuel Scott gave today at SearchLove London, an annual event held by UK online marketing agency Distilled. Scott’s next biweekly column will appear on Monday, October 30.
Crazy Egg. Facebook. Google Analytics. Google Tag Manager. Hubspot. Marketo. New Relic. Visual Website Optimizer. With four clicks, I can bankrupt all of these platforms and others just like them.
But wait for it. So far, we have heard many great ideas on data and analytics - and now for something completely different. First, let’s review a little theory. There have always been two main categories of advertising: brand advertising and direct marketing. Brand advertising builds brands by communicating subconscious messages to mass audiences for long-term benefit. Direct marketing gets immediate, trackable responses from a specific set of people.
Now, the benefits of brand advertising are that it is creative and memorable. It’s subtle and not too annoying. People tolerate brand advertising because they are sometimes even entertaining. Just think about the Super Bowl ads in America. I remember ads that I saw thirty years ago. I don’t remember any blog posts or PPC ads that I saw yesterday.
But the negatives are that it is expensive. One campaign with one big idea is expensive - and not trackable. If you ask a creative how many sales directly resulted from a print ad, TV commercial, or billboard, you will never get a precise answer because it is impossible to know. Creatives know general principles of human behavior but cannot prove their results beyond seeing a general increase in sales after the fact. And that rubs a lot of digital marketers the wrong way because they are used to having good data on everything.
One benefit of direct marketing is that it is comparatively cheaper - and online marketers love that. Just think about how often we see digital marketers wondering how to do 'quick, cheap hacks' for something. Direct marketing is also trackable, which means that it is possible to calculate direct ROI in a way that is impossible for other activities such as brand advertising or PR.
The most important negative aspect of direct marketing is that it is annoying. When a campaign is cheap, the ads will also be cheap. People tolerate brand advertising but hate direct marketing. Across any channel or medium, direct marketing of all types is essentially a business jumping in front of you and saying, “Hey! Do this right now!” And that leads to the problem of apocalyptic proportions that I am addressing today.
Over the past 20 years, digital marketing, for better or worse, has gone all-in on direct marketing. It’s why I see online marketers imprecisely using the word 'advertising' to refer to 'direct marketing' campaigns. Most of what people have discussed at this conference so far is not advertising but direct marketing.
We had direct mail; now, we have e-mail marketing. We had infomercials; now, we have online videos that want us to click. We had advertorials; now, we have blog spam or 'content marketing'. We had fliers that would appear on walls and posts; now, we have pop-up ads. Today, we have direct response ads that interrupt our conversations with friends and family on social media as well as others that follow us around the internet.
The ultimate goal of direct marketing is to deliver the 'right ad to the right person at the right time'. It’s really not anything new. We have always been able to track direct ROI for direct marketing campaigns over many offline channels such as telemarketing or direct mail.
Today, artificial intelligence in marketing is all the rage, but it’s just another way to execute that direct marketing idea. Take this clip from the 2002 film Minority Report.
Now, a lot of marketers probably watched that and thought, “Wow! When can we do that?” But remember, the 99.9% of people who are not marketers saw Tom Cruise getting scanned for ads and were horrified. It sounds cool to us, but Bob Tillerman in Kansas or John Smith in Cornwall will hate it. Remember, the world in Minority Report is a dystopia. The ads are about as real as Tom Cruise’s marriages.
Direct marketers love the tactic because it is trackable. But people hate it for the exact same reason. A University of Pennsylvania study found that 66% of Americans do not want direct marketing that is tailored to their interests. When told how marketers collect their data to tailor the ads, the percentage increases to 86%.
In this Marketing Sherpa survey, online direct marketing of all types is the category of marketing that people like the least. Linux Journal editor Doc Searls described it this way: “Madison Avenue fell asleep, direct response marketing ate its brain, and it woke up as an alien replica of itself.” I put it like this: “We took direct marketing, combined it with adtech, and created the marketing version of Frankenstein’s monster.”
Now, the web existed for two decades without people trying to find a way to block online advertising. So, why is it happening today? Searls found the answer - direct marketing run amok and taken to an extreme.
Searls used Google Trends data to show in the Harvard Business Review that the rise of adblocking has specifically correlated with the appearance of retargeted advertising. If anyone here uses retargeting, then it is your fault that people are blocking online ads.
Retargeting was the straw the broke the web's back. People hate it. Retargeting has turned the marketing industry into drug addicts on the path to suicide. We like the constant highs of the purchases and conversions, but all of those hits are eventually going to kill us once consumers have had enough and block ads altogether.
People do not want to be tracked. The more that marketing tracks people, the more that it will annoy people. Imagine how you would feel if the exact same piece of junk mail appeared in your mailboxes at home and work at every single day. Now, do you still think retargeting is a good idea?
Digital marketers forget the principle of negative externalities. As Searls wrote elsewhere:
“...annoying people personally with calls to action, especially when only a tiny percentage will actually respond, creates no brand value and has other negative externalities, such as associating the brand with annoyance.”
Here’s an example: you constantly target the same people with direct-response ads or blog spam. Say that you get 3% to respond, buy, or 'convert'. You will annoy the other 97% -- and they will never buy in the future as a result. Is that truly a good way to build a brand over the long term?
As you all saw yesterday, Biddable Moments founder Samantha Noble is a genius at online direct marketing who gave a brilliant presentation on how we can use personal data to target people with increasing precision. But with all due respect to her, I'd argue that people do not want marketers and data platforms to know their ages, salaries, marital status, and food preferences. That mentality is driving all of these anti-data trends, and what will we do when all of that data no longer exists?
According to Page Fair’s 2017 Adblock Report, 20% and 18% of people in western Europe and North America are using ad blockers. Here in the UK, it’s 16%. In terms of future trends, 63% of millennials use ad blockers on at least one device. 14% use them on both mobile and desktop. Why are we so comfortable with harvesting peoples’ personal and private data? The more that people are learning how their personal data is being collected and used, the more they are opting out.
Now, a lot of people here are probably wondering, “Why should I care? I don’t do online advertising. I do SEO or martech or data analytics.”
Here’s why you should care. Ad blockers stop front-end website scripts from loading. That means that most ad blockers stop not only adtech but also martech that depends on such scripts. Here’s one example: when I visited Tech Crunch recently, I saw that the website attempted to load 22 different advertising, martech, and analytics trackers, including some of the big names that I mentioned at the beginning. My blockers rendered all of those platforms useless. Good for me, bad for them.
Adblock Plus stops almost all advertising and social media tracking by default. Google Analytics and other martech can be blocked with just a few quick customizations. Ghostery blocks all of these martech platforms by default. So does uBlock Origin. When you run the numbers and look at it the opposite way, you’ll see in one example that more than 220m people in western Europe and North America are blocking Google Analytics. And the more technical your audience, the more likely it is that they are using blockers.
It doesn’t stop with adtech and martech blocking. Global Web Index found that 25% of people in the world are using VPNs to create impostor data. (In the UK, it is 16%.) Similar Web found that visits to Duck Duck Go, the search engine that does not collect any data, have increased to 200m per month. Apple’s new Safari 11 browser uses what it calls Intelligent Tracking Prevention, which deletes tracking cookies after 24 hours.
Here is the hard truth - we have no idea how much marketing data is lost, inaccurate, or never collected at all, but it doesn’t stop there. Soon, data may become a toxic asset that could bankrupt you or your company. The use of big data in marketing depends on consumers opting into or not opting out of supplying their personal data. That is not sustainable.
On 25 May 2018, Judgement Day will come not from self-aware machines but from the European Union. If your company collects, stores, processes, transmits, or analyzes data from anyone in any EU country - that would be most people here - pay attention. (And it’s only a matter of time before such laws and regulations are enacted worldwide.)
In basic terms, the forthcoming General Data Protection Regulations (GDPR) EU regulation aims to stop all non-consensual consumer data tracking in the EU. Consumers must opt-in whenever any company wants to use any of their data. Now, imagine the typical adtech or martech stack of platforms. As data is collected, stored, analyzed, and transmitted through the stack, consumers will need to give their consent to every single company along the way.
In addition, the opt-in can be withdrawn at any time, and any and all personal data must be erased upon request. Users can also request copies of whatever data companies have on them. If any consumer complains and a company is found to be in violation, it will cost them up to €20m or 4% of all global revenue from the prior year.
It doesn’t stop there. The EU regulation as it stands does not distinguish between tracking cookies and non-tracking cookies. That will mandate opt-in consent from every user to use A/B testing, send different website designs to different visitors, localize currencies, cap advertising frequencies per user, provide personal stock reports, and more.
What does this all mean for us? Page Fair found that only 5% of consumers would opt-in and allow the same level of tracking that exists today. Another 20% would accept only first-party tracking. That’s about as effective as Kendall Jenner giving a Pepsi to a police officer at a protest.
Now, why are the numbers so low? Again, people do not want to be tracked. Here in the UK, a Guardian reporter used privacy laws and a lawyer to obtain all of the data that Tinder had on her. What did she receive? 800 pages of data. 800 pages from a silly dating app.
Now, Google has tracking on roughly 75% of the web, according to Princeton University. For Facebook, it’s 25%. What do you think Google and Facebook know about us? How much do you think GDPR is going to hurt them? Imagine if Google and Facebook have to ask every single person’s permission to track them on every single website.
In the coming months, I predict that we will see widescale PR campaigns from Google and Facebook stating that GDPR will actually be bad for both marketers and consumers. And of course, it’s going to be bullshit. This is the future we are facing.
So, what should we do? Here, I’ll offer some suggestions, going from the specific ones of my colleagues at The Drum to some general thoughts of my own.
First, take stock of your vendor contracts and understand your entire data supply chain (I never said it would be easy). Know all of the data you are collecting and using as well as from whom and from where you are getting it. Make sure that all data centres that manage EU data and are used by you or your SaaS tools are in the EU. Create a data roadmap and name a head of data protection to manage all GDPR compliance. Make sure that all of the marketing tools that you use are compliant as well.
Second, in marketing terms, use adtech and martech platforms that do not depend on front-end scripts and are thereby immune to ad blockers. I know some names, but you will need to do your own research because I do not want to appear as though I, The Drum, or Distilled are advocating for certain marketing platforms over others.
Third, there is still time to lobby the EU because the regulation is not final. In just one example of changes that might help us, the marketing industry might want to try to persuade them to distinguish between tracking and non-tracking cookies because the latter are used in non-invasive activities such as A/B testing.
Fourth, and I think this is the most apocalyptic scenario - we need to prepare for the potential return of a world that many thought had disappeared 20 years ago. There is one way to ensure GDPR compliance completely - stop all marketing surveillance and tracking activities. No more seeing what people do on websites. No more seeing how people use your product. No more storing purchase and search histories. No more using personal information. No more targeted direct marketing. No more analytics. No more data.
In an SEO context, do you remember how we slowly saw 'not provided' organic keywords slowly creep up to 100% in Google Analytics? Well, imagine that you open your reports one day and see that everything is 'not provided'. That is the data armageddon that might occur as good data becomes more and more protected or otherwise unavailable.
The day after tomorrow will indeed be a disaster – but this time, it will destroy marketing analytics and online direct response campaigns rather than the global climate. The marketing world will return to 1997. In a marketing world without data, we will once more need to think about creativitym, just like the Mad Men of old.
But it will not be bad. As Wistia co-founder Chris Savage has written:
“When we all have access to the same types of data, it won’t be the data that differentiates us , it’ll be the art.”
Everyone does A/B testing, so it no longer delivers a competitive advantage. It’s just a way to keep up with everyone else. Creativity will be the only thing that differentiates you from the competition. We may not always have data, but we will always have our brains. When we do not have data, we will need to look at websites as traditional marketers look at stores. We will not always know exactly why people arrived, but if we do integrated, quality marketing, it will not matter.
Not everything that is important in marketing can or should be quantified. Tom Goodwin once put it this way. Soon, we’re going to have to remember that fact because people do not want to be tracked. We will see a move away from direct response marketing and back towards brand advertising. We can do brilliant advertising without tracking people and collecting their personal data. We’ve done it for 100 years. Digital marketers have always assumed that reaching perfect individuals returns a better ROI than reaching broad marketing segments. But that has never been proven.
It takes four clicks to install most ad blockers. We are one click away from marketing’s The Day After Tomorrow. What are you going to do?
The Promotion Fix is an exclusive biweekly column for The Drum contributed by Samuel Scott, a global marketing speaker who is a former journalist, newspaper editor, and director of marketing and communications in the high-tech industry. Follow him on Twitter and Facebook. Scott is based out of Tel Aviv, Israel.