The concept of data-driven marketing is fast merging with the customer-driven enterprise. The common thread is the transformation of the marketing process through the use of technology to convert the unknown audience into the known customer base. This concept enables marketers to be more targeted, developing a personalized customer experience while not ignoring the larger universe of potential customers. Just look at CPG companies, which aim to create a more direct relationship with their customers by gathering email addresses in exchange for coupon offers. Their goal is to know more of their customers directly rather than rely on third-party sales channels. They want to convert the unknown to the known!
Advertising has long been seen as a subset of marketing tending to focus on the paid interaction between brands and customers. Advertising has taken a more important seat at the table in recent years because of the proliferation of digital media and its ability to target consumers through addressable, personalized messages. Advertising tends to focus on the external paid while marketing focuses on the owned and earned, both to the external market as well as to those whom a brand has identified in some manner, whether that be through a purchase or simply through opting in to email or some other kind of CRM. Closing that gap between the unknown (or anonymous) and the known is the intended goal for data-driven marketing, and the conversion to a customer with higher lifetime value is the intended goal of the customer-driven enterprise.
As more media becomes addressable over the next 10 years, the journey from unknown to known will become more inclusive. According to some numbers, this is the first year where spend on digital advertising will exceed television, but as television marches inevitably toward a digital future, the scope of addressability in media will have exponential impact. When you sit down, turn on the TV and log in to your viewing experience, the ads and even the recommended programming will be customized to you, based on the behaviors you’ve exhibited across platforms. In this way, addressability creates a reciprocal benefit for both you and brands. Advertisers get to be more personalized in how they present messages to you. You receive a more customized experience, one you are more likely to enjoy.
Of course there is a line to be drawn for how personal is too personal. You should never be able to accurately identify 100% of the audience on a 100% known basis, but if the industry acts accordingly and the proper guidelines are established, you should be able to get more granular on segments of the audience, enabling targeting based on behaviors, if not by name. This kind of data already exists in many formats, and privacy concerns are allayed because industry standards are in place for magazines, direct mail, etc. These can be applied and even strengthened for digital media, ensuring a fair value exchange.
If these standards are adopted and television delivers on the promise of addressability, I foresee a world where brands that invest in the transformation of marketing will be able to close the gap between the unknown and the known. I see a market where outbound efficiency in terms of targeting and messaging is coupled with back-end increases in performance, loyalty and lifetime value. This can translate to measurable impact on net revenue as well as profitability -- which supports my theme of the last few weeks, that marketing has become a business driver more than a cost center, and the CMO is becoming a more important player in the enterprise organization.
Am I overstating the importance of data? I don’t think so. What do you think?