THE GOOD, THE BAD, AND THE UGLY OF TARGETED MARKETING
Published on May 8, 2020
From Facebook to Instagram and Tik Tok to Twitter, an increasingly interconnected digital world has produced a broad base of touchpoints for marketers to leverage. Throughout these platforms, every click, purchase, search, and like, forms a repository of insights to lean on for future interactions.
As every CMO would know, these digital data trails inform personalisation efforts for better targeted marketing. But at what cost?
Amid mounting regulatory scrutiny on the back of notable data breaches and clear violations of consumer data privacy rights, it would appear that needs are changing. With users no longer satisfied with the status quo where personal data is a commodity for exchange, privacy is increasingly being perceived as a right rather than a luxury.
With that in mind, is there a place for targeted marketing today in a privacy-conscious world?
The Good: Consumers actually value efforts at personalisation
In 2011, Google coined the term Zero Moment of Truth which describes the moment when a consumer begins the journey of researching a product that will meet their need before a seller even knows that they exist. This is crucial as it implies that marketers have the ball in their court—are you showing up at the right time, the right place, and to the right person?
Salesforce found that 51 percent of consumers expect brands to get this right, believing that companies will be able to “anticipate their needs and make relevant suggestions” before their first interaction. It’s clear that knowing your customer, what they want, and what they need from you is valuable.
Following that interaction, that expectation is heightened. After all, a consumer has now engaged with your brand, perhaps followed its social channels, and maybe even completed a purchase. Research certainly supports this claim, with Marketo finding that 79 percent of surveyed consumers worldwide cited that they’re only “likely to engage” with an offer if it’s been personalised to reflect their previous interactions with a brand.
Today, the how is certainly no question. Marketers have tools at their disposal, from social data on social networking sites to consumer data management platforms that can inform audience profiles. In fact, big tech giants such as Facebook and Google have clearly shown the profitability of data as a resource, with both companies responsible for 65 percent of advertising spending taking place today.
The Bad: Intention informs behaviour
Customers are at the heart of marketing efforts as eventual campaigns can hopefully produce measurable results in the form of purchases or increased sign-ups and readership. In balancing returns, this is the challenge for brands and advertisers today as they look to uphold the efforts of personalisation amidst questions of privacy and ethics. While it may be tempting to play it safe, brands that’ve yet to jump aboard the targeted marketing bandwagon are only set to irk their customers with 63 percent stating that “blasting generic ad messages” are “highly annoying”.
But where do we draw the line?
Targeting practises can sometimes veer into the territory of becoming discriminatory when aimed at so-called “immutable” characteristics. Immutable characteristics are qualities that are essential to who you are as a person—think of gender or ethnicity. When used in the context of pinpointing the ideal customer for certain products, services, or even political campaigns, things can get messy. Ethical issues such as the consequences of stereotypical targeting come to mind and that can lead to negative effects in brand perception.
Results from Kantar’s Link™ ad testing product found that while over 80 percent of marketers in Asia Pacific think they’re doing a good job of avoiding gender stereotypes in their campaigns, audiences feel differently, with over two-third believing that advertising in the region still panders to and reinforces stereotypical gender roles. Globally, this number increases with 76 percent of female and 71 percent of male consumers finding that gender portrayal in advertising is “completely out of touch”.
While targeted marketing is valuable, it’s clear that it’s also a question of the metrics being leveraged. Actions say more than inherent traits.
The Ugly: Loss of trust = game over
There’s always a limit to the extent and accuracy of targeted efforts that marketers need to keep in mind. According to a report by SmarterHQ, 79 percent of surveyed consumers felt that companies knew too much about them. After all, data presents itself as a boon when it comes to meaningful consumer engagement and quality conversions but it’s important to be prudent not only about its use but also how it’s stored.
While it may be tempting to amass large quantities for the next campaign and the next one after that, the last thing you want is a data swamp on your hands. Lacking in organisation, curation, and appropriate management, data swamps are a surefire way to open firms up to unnecessary security risks and compliance violations. With our over-reliance on data to adequately personalise campaigns, are your consumer data management platforms being managed properly?
Recall notable data breaches that have taken place across industries spanning retail, tech, financial services, and social platforms. Remember the recent discovery of hundreds of thousands of credit card details issued by Southeast Asian banking institutions on the dark web? Breaches can happen at any time and no company—whether a startup or a leading global conglomerate—is immune.
With the amount of data that consumers surrender to companies over time, the implications of a breach can be grave: consumer trust simply cannot be rebuilt or regained overnight. In fact, a report by Ping Identity found that 81 percent of consumers would stop engaging with a brand online altogether following a data breach.
Mitigating risk: why distributed systems are the future
That said, the responsibility of security can’t simply fall on the back of dedicated in-house teams or security researchers. From the get go, CMOs and brands have the responsibility to make the right decisions of choosing infrastructures that are built with security and privacy in mind as the two go hand in hand.
While there are many ways to approach the matter of today’s centralised systems, we’ve opted for a distributed, cryptographically-secure method through a federated identity management platform. Unlike existing centralised alternatives that pose significant security risks, distributed or decentralised systems eradicate the possibility of a central point of failure on an infrastructural level. This ensures that hackers or bad actors are unable to exploit infrastructural weaknesses that have the potential to debilitate an entire network or a database.
“Data is the new oil”
The oft-cited phrase coined by British mathematician and entrepreneur Clive Humby has almost become a mantra for big data enthusiasts and marketers alike. Much like the commodity, however, its value is determined by its refinement.
As we venture into the new decade, the realities are clear: consumers are bombarded with more avenues of choice than ever and in response, they’ve become more discerning than ever. While it's clear that personalisation and targeted marketing are sorely needed to cut through the noise, marketers will do well to remember that it’s all about moderation.
Most importantly, it comes back to trust. Taking steps to better secure data infrastructures and ensure that campaigns are, as they say, “woke”, can make all the difference.
Before that Zero Moment of Truth comes into play, are you even ready to meet your consumers in the middle? For a prospective consumer, we’re willing to bet that such efforts can create even greater brand loyalty than an uncannily accurate ad.
Curious to learn more about some of the groundbreaking techniques that exist today to better protect consumer data? Check out our Beginner’s Guide to Differential Privacy and Federated Learning.