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The Marketer’s Dream: Solve for Inflation and Privacy in One Fell Swoop
October 20, 2022
Author: Emily Anthony, SVP Media Services
For marketers managing advertising budgets, two pressing challenges seem to make their way into nearly every conversation lately: the cookieless future and the state of the economy. And for good reason.
On the economic outlook front, inflation remains high and consumer confidence is wavering amidst discussion of a possible recession. The forecasted pullback in discretionary consumer spending after several volatile pandemic years has many brands hedging their bets and looking to limit investment to tried-and-true tactics. However, the ad tech landscape is experiencing a monumental shift that’s directly impacting the efficacy of those proven historical efforts. Many brands are already facing undeniable data signal loss and performance impact from recent browser and operating systems, with Chrome’s cookie deprecation deadline yet to come.
The good news for marketers is that there is a single path forward to address the dual challenges of inflation and the cookieless future. It’s through the other topic marketers are and should be obsessing over – the customer. Customer-centricity and customer experience transformation are broad and buzzy topics, with many marketers struggling to break down these concepts into immediate, value-driving actions.
At the most basic level, taking any customer-centric action requires knowing what your customers need, want, and expect. And to know your customers, you must gather significant data and insights around them.
Transitive logic brings us to the first immediate action item: Having a first-party data strategy.
· Know where you are collecting customer data today.
· Identify how can you collect more of it tomorrow.
· Connect your various customer data input sources.
Leverage these inputs to make informed decisions about outputs – the best way to show up in front of your customer at the next touchpoint.
How will these steps combat current environmental pressures? Privacy-safe and consented data signals will be the foundation of the future ad-tech landscape. There is a lot of debate about the rise of contextual targeting and potential over-hype of identity resolution and clean-room data solutions, but the fervor around machine learning and artificial intelligence in ad tech only continues to grow. Regardless of where details of ad targeting mechanics land, it’s a safe bet that modeling will be part of the solution. Any effective model must be properly trained, meaning the best input for any model is the exact action or conversion activity a marketer is looking to replicate. Marketers must be able to identify customers at valuable points of interaction with the brand and collect that data to feed into models (whatever the exact future of those may be).
See how one large non-profit organization used first-party data to create tailored messaging on Facebook.
The same focus on first-party data strategy to prepare for cookie loss has the additional benefit of helping marketers combat the effects of inflation. Customer data signals are arguably the most powerful asset in navigating current strategic planning discussions. As market dynamics shift rapidly, customer data can be mined to help answer questions like: “What are the characteristics of your most and least resilient customers?” “Are there geographic markets being disproportionally impacted?” “Where is product interest growing vs. shrinking?” Have your customer data in order so that it can be married and/or analyzed in the context of third-party economic indicator data sets like the Merkle Inflation Dashboard.
These are all data points that can be used to drive investment decisions. It can be tempting for brands to respond to economic pressures by looking inward and shifting focus to deliver short-term bottom line or maintain run rates, but leading brands are those who continuing to prioritize the needs of the customer.
Leaning into a first-party data strategy for activation has been proven to improve investment ROI. Rather than put savings against the bottom line, brands should consider reinvesting in tools, technology, and resources that continue driving customer experience transformation via data transformation and digital transformation projects. These are long-term efforts that evolve over the course of years rather than months, requiring a consistent long-term view and ongoing investment prioritization. There is the bonus that in times of recession, brands that out-invest their peers over the duration of the economic downturn are proven to increase market share and long-term revenue.
Voila! By focusing on first-party data collection, you’re taking the most significant step toward future-proofing against the death of the cookie AND establishing resilience to weather economic disruption.