Anyone involved in marketing knows that the industry has changed dramatically over the last decade and it’s accelerated even faster in the past five years thanks to digital technology. As consumers interact with brands both offline and online, marketers are struggling to adapt. Why? Because the only way to effectively communicate with customers across media, time and devices in real time is to have a robust customer recognition capability. And findings show that marketers are failing at recognizing customers.
To better understand how marketers can achieve strategic customer-recognition goals through technology and data capabilities, Epsilon and Conversant partnered with Econsultancy for research across more than 200 brand and business-marketing executives in North America. To get deeper insight on the findings and dispel the belief vs. reality in digital marketing capabilities, we sat down with Warren Storey, SVP of product management at Epsilon and Ben Eason, SVP of client development at Conversant to learn what they’re hearing from marketers:
Q: 84% of marketers describe identifying users, personalizing messaging and measuring impact as “very important to growth,” yet only 10-14% enjoy strong capabilities in this area. Based on your conversations with marketers, why do you think there is this lag in digital capabilities?
Ben Eason: Marketers don’t know what they don’t know. Often times, marketers don’t have an understanding of the customer identification gap that exists within their organization. This is because they don’t have a means to see how many cookies and devices the average customer is associated to. Without a full understanding of the missing pieces, they aren’t pushing the marketplace hard enough for a solution. When it comes to their partners, most digital vendors are cookie-based and aren’t in a rush to have this issue solved. In this type of environment, you can see how the problem perpetuates.
Warren Storey: I’d also emphasize that this is largely because customer recognition is not easy to accomplish. Very few vendors can truly solve this problem for clients in a comprehensive way. Marketers and their organizations do see the importance of the problem, however solving it, across all channels and methods of identification, is like solving a jig saw puzzle. It takes time and the right partner to develop a solution that truly allows for personalization.
Q: Speaking of partners, nearly 60% of respondents say that the reality of their data management technologies does not align to the promises they were sold. Where do you see many data management vendors falling short?
Warren Storey: Technology in the area of consumer identification and personalization is changing rapidly making it difficult to keep up. Most tech stacks are focused on either cookie or personally identifiable information (PII) based identification and do not have the mapping in place to effectively identify cross-device linkage. Even further, marketers must then be able to tie all of this back to offline behaviors and transactions.
Ben Eason: I echo Warren’s sentiment, the issue often starts with tech stacks. Many tech stacks were built either with cookie-based solutions or miss on key areas such as cross-device consumer identification. Given the gap that this creates, vendors have not been able to keep up with how consumers interact today online, with multiple devices often clearing and/or blocking cookies.
Q: You mentioned the non-linear path to purchase and bridging the online and offline gap.According to the report, only 5% of the industry as a whole is able to tie offline sales back to online activities. How important is cross-channel attribution in the age of digital and measuring marketing success?
Ben Eason: It’s hugely important as consumers spend so much time online before making many offline purchases. If you are optimizing your ad dollars to just the small percentage of online sales, you are making bad decisions regarding your online advertising investment.
Warren Storey: If you cannot measure the real, in-market impact of your advertising spend, you will never be able to optimize media mix. The ability to tie back to actual purchase behavior, in a reliable and accurate way, is critical to ensuring that you are getting an accurate read on Return on Ad Spend. It is challenging, however there are data sources and vendors that have the ability to complete the loop, create a single customer view and assign transactions to online impressions effectively.
Q: Overall the report finds that only 12% of marketers have a true single customer view. How are these companies at an advantage? And what do companies that are falling short need to do to deliver personalized communications?
Ben Eason: Based on the fragmentation that we see each and every day, the marketers that get this right have a huge advantage in terms of minimizing waste in ad spending and improving the customer experience with creative that is more personal and relevant. With ad dollars being focused where they actually work, these organizations also benefit from operational efficiencies.
Warren Storey: I agree with Ben. The advantage extends into the market place on many fronts including customer experience. If you are able to orchestrate your communications across all channels with the knowledge of who you are communicating with, what their propensities are and what past marketing they have been exposed to you will be able to ensure that each consumer is being reached with optimal messaging. Overall, this enhances the customer experience with your brand and elevates your brand equity.
Advertising effectiveness is also an advantage these organizations realize. The return on spend is greatly increased if you are able to meter your communications and time your messages based on accurate customer identification. This enables marketers to truly refine the overall marketing spend to focus dollars on the right consumers, at the right time and with the right message to drive sales. Finally, if you have backend closed-loop measurement, you will be able to constantly monitor the impact of your advertising and make the appropriate course corrections based on actual ad performance.