ON THE CMO AGENDA: RAISED (NOT RUINED) BY DATA
Published on June 08, 2020
Reach, relevance, awareness.
These are the fundamental tenets to brand recognition. However, as the marketing ecosystem has expanded over the years thanks to the growth of digital, the role that marketing leaders play today has changed. No longer limited to the initial customer discovery process, marketers are now tasked with cultivating the long-term consumer journey in a bid to maximise retention and cultivate lifetime value. Responsible for underwriting the rules of personalisation as we know it today, data plays a pivotal role in how brands are able to deliver experiences that consumers have grown to both love and expect.
Technology is not only the enabler, it is the experience. It’s what allows for precision targeting, enabling brands to reach the right customers at the right time, personalising messages based on consumer profile, habits and preferences. Compare this to how advertising campaigns were designed in the past, with creatives informed by market research and standardised audience profiles. Progressing in a linear order, once commercials were commissioned, little could be done thereafter to optimise a campaign once live.
Yet, marketing executives know that with the rewards of data, so too come the risks—whether that’s keeping apace with ever-evolving regulatory frameworks from country to country or increased scrutiny from consumers themselves. While it would be remiss to say that we ought to “forget” about that for a moment, let’s imagine a time where privacy compliance is no longer an afterthought: marketing technology solutions would be developed with privacy-preserving enhancements in mind and businesses could leverage data in such a way where consumer relationships are only strengthened rather than compromised.
When used carefully, data can empower the modern-day marketer, enabling them to truly espouse customer-centricity in everything they do. In this iteration of On the CMO Agenda, we’ll be unpacking several approaches that CMOs need to adopt in order to realise a fully data-driven view of the future.
For your firm: Be vocal
While data compliance and data security are often areas of concern left to information security teams, CMOs need to play a more active role in the dialogue and decision making surrounding privacy-by-design. As leaders, you will need to take it upon yourselves to make the difficult decisions on behalf of your customers. Admittedly, abiding by data privacy frameworks is not an easy task—depending on where your company is located, requirements stipulated by regulators may include needing to employ a Chief Data Officer or investing in specific methodologies to ensure that data is appropriately anonymised or pseudonymised.
According to Globalscape and the Ponemon Institute’s 2017 study, the average cost of compliance for surveyed companies was US$5.47 million, indicative of the reality that privacy compliance does not come without its costs. That being said, when measured against the cost of non-compliance, valued at US$14.82 million, the trade-offs are clear. This is measured as the cost of business disruption, productivity reduction, fees, as well as other legal and non-legal settlement costs and penalties.
That being said, some privacy advocates have argued that a frameworks simply aren’t doing enough to incentivise compliance and that some companies have stalled regulators altogether, allowing cases to drag out due to court appeals. In spite of this, recent survey by law firm DLA Piper argues that GDPR fines are set to grow, pointing to the fact that regulators are actively revisiting how these are calculated. Most notably, Germany’s Datenschutzkonferenz (DSK), the joint body of the German data protection authorities, released a new model to create a more transparent, systematic, and comprehensive model to calculate fines. If followed by other member states, this will lead to even far more severe penalties that are designed to be far more proportionate for companies generating high profits from their revenues. If applied in its strictest form, the DSK model would see fines in the millions for violations of “mere formal requirements”.
While cost-cutting measures are necessary during periods of economic difficulty, slashing spend being allocated towards data compliance is a big no-no. In a time where productivity and business agility is everything, marketing leaders must ensure that their toolkits are running smoothly—and today, that needs to begin with data privacy considerations in mind.
For your consumers: Be aware
Today, people are able to traverse the furthest reaches of the digital landscape with little regard for geography or industry. From websites to OTT streaming services and social networks to games, the number of touch points within which brands can interact with consumers only continues to grow. In light of this, having a strong understanding of user behaviour, preferences, and habits is key to anticipating their wants and needs. Beyond delivering a cohesive experience that ensures that brands are heard, brands too, need to listen.
There is merit in going back to basics, leveraging traditional tools such as consumer research reports, real-time feedback from customer service or sales staff, as well as survey platforms to better inform your approach to customer relationship building. According to Gartner, this is especially crucial when marketing during periods of uncertainty, recommending that all their clients ought to ramp up customer listening capabilities in order to steadily monitor how sentiments and preferences are changing on a weekly basis.
With the aim of enabling increased customer-centricity, brands cannot afford to simply rely on existing audience profiles when preferences are rapidly changing especially in the context of unprecedented circumstances.
For your partners: Be strategic
Despite the benefits offered by programmatic, ISBA’s recent findings have shown that there remains “a big hole in the value chain” as reconciliation remains a pivotal roadblock. According to ISBA, it took advertisers and publishers nine months to retrieve data from tech vendors, indicating the pitfalls of a woefully opaque and complex supply chain. Meanwhile, auditing partner PwC found that “a lack of understanding and consistency” among adtech suppliers pertaining to how data can be legally shared, stored, and formatted has also contributed to the problem. In sum, a resulting ripple effect of inefficiencies impacts every aspect of the programmatic supply chain, from how quickly impressions can be reconciled to how easily payments can be allocated to campaign stakeholders.
In a campaign environment, having access to real-time data means real-time insights, allowing decision makers to make better strategic decisions in the hopes of maximising performance. To address this issue, CMOs must take it upon themselves to make better investment decisions in marketing technologies that help to mitigate these systemic issues. For one, blockchain has shown a great deal of promise in enabling end-to-end transparency in programmatic campaigns, giving participants a clear picture of the lifecycle of a given impression. With blockchain’s inherently immutable quality, stakeholders can have the assurance of every impression’s provenance. When paired with smart contracts that have pre-encoded metrics that can ensure that ads were only ever served in brand-safe, fraud-free environments, this can lead to significant cost-savings for advertisers. As a means of assessing campaign performance, this valuable record of performance can also serve to inform brands of how their preferred partners are doing.
CMOs should remember that data-driven decision making takes place at every level. From the vendors you choose to work with to the insights gleaned that can inform real-time optimisation, data plays a vital role in campaign success.
Mastering the data game
It goes without saying that data takes on a valuable position in every business. Leaders would certainly agree that data now plays a key role in strengthening the brand-consumer relationship as much as it helps to guide better informed business decisions. Despite its associated costs, data need not be a burden if marketers treat it well. With the multifaceted role that it continues to play in the life of every marketing leader, we should expect that its importance will only continue to grow in the years to come.