Ever had an advert follow you around the internet long after you’ve actually bought that pair of shoes, or handbag or laptop? You can understand why most consumers get annoyed by this kind of persistent and meaningless advertising. It’s no wonder governments are passing ever-stricter privacy laws. But you can also understand why companies want to target people with products they clearly crave. So, what can brands do to connect with consumers without making them feel like they’re being stalked?
Implications for Brands
The push for privacy isn’t all doom and gloom for those of us in the marketing business. Consumers do want ads that are relevant to their desires. But one type of content won’t suit all audiences. So, brands need to know which messages to serve to which audiences. We used to rely on demographics to segment audiences and provide messages targeted to each group. Unfortunately, this trick has been ground into the dust, because demographics are DEAD.
To reach audiences in today’s cluttered space, brands need to provide hyper-personalized content.
Personalization isn’t rocket science, but it is a fine art.
So what’s the big deal? Brands have used personalization for a long time, right?
Brands often think they are offering personalization when they are providing optimization. Using machine learning to identify which ads that are most impactful is optimization. This is great for seeing what earns the most clicks at the lowest CPC (cost-per-click). But it does not work at the individual level, because it’s not personalized for each user.
One way to think about this difference is in terms of “fast” or “slow” data, says Marcos Cadena, Vice President, Digital Marketing, Distribution, CRM, Loyalty, Partnerships & Head of Data Privacy at Minor International. “Fast data is what we get directly from our customers. Any action we take based on this data is immediate and unique to that customer,” he says.
“Slow data is when we take all the information we have and analyze it to come up with multiple ads as a result,” he adds. In other words, the bulk data helps create an optimized version of an ad.
Personalization is not so easy. Have you ever called the customer helpline for your telephone service provider, only to waste the first five minutes verifying your identity and providing your telephone number (oh, the irony!)? Compare this to the experience of walking into your favorite restaurant in a city you haven’t visited in a few months, where you are greeted by name at the entrance and ushered straight to your favorite table.
Both service providers have the same information available to them, but one uses it much better than the other. Marcos says, “When a customer calls us to make enquiries about a particular hotel property, our customer service executive already has all of their information handy – where the caller is based, what type of room they booked with us previously, and whether they are travelling solo or with family. Having this information allows us to serve the customers much more efficiently.”
Don’t Sacrifice Data Privacy for Personalization
Consumers are finally coming to terms with the necessity of online ads, but they are also increasingly wary of how their data is used. With laws like PDPA (Singapore, Thailand) and GDPR (Europe), it’s not just a question of breaking customer trust; brands face the risk of severe penalties for breaches.
It’s tricky to find the perfect balance between personalization and privacy. People are emotional rather than logical when it comes to decisions about their personal data. Many are perfectly happy to share TMI (too much information) with total strangers on Twitter but keep the same information secret from their nearest and dearest. What triggers people’s concerns about privacy is difficult to discern.
Fortunately, as HBR pointed out, data scientists have been studying this balance for a long time, and there are ways that brands can use personalization without encroaching on privacy. One way is being transparent about how the personalization was made possible. If a person willingly provides information to this end, they are less likely to get incensed (and write that long, angry social media post about it) than if the information was obtained via a third party that the consumer may or may not have knowingly given consent to.
Conscientious and smart brands know which category they want to belong to. “Consumers have the right to understand what data is being collected and how it’s being used. Companies must build the infrastructure to make this transparency possible. It adds complexities to how we work, but it challenges us to change our strategies and adapt,” says Marcos.
Ultimately, the use of technology must go beyond paying lip service, must dig deeper than optimization to deliver personalization, but pull short before veering off into the dangerous waters of privacy infringement.
Use customer data to show a shopper a pair of socks to match; don’t try to sell them the same shoes again.