“Not so long ago,” writes the Doxee Marketing Team, “data-driven marketing was shrouded in an aura of mystery, a kind of unknown territory into which only technicians with specialized skills could venture. And for this reason, it was rather rare.”[1] They go on to insist that data-driven marketing (sometimes referred to as digital marketing) is something “companies can no longer do without.” This assertion, however, comes at a time when digital marketing is coming under greater scrutiny and access to data is becoming more difficult. Bryan Leach (@bryan_leach), founder and CEO of Ibotta, explains, “As Apple and Google have strengthened their privacy rules, many of the largest ad platforms have begun to ‘lose signal,’ meaning they can no longer effectively target specific audiences based on past viewership habits. Advertisers in the consumer packaged goods (CPG) industry are reporting 30% increases in their cost to activate new customers from digital ads, with click-through rates often dropping below 1% and many of those clicks being accidental.”[2] This begs the question: Is digital marketing the future or the past?
What is data-driven marketing?
According to the Doxee team, “Data-driven marketing builds plans and strategies starting from the data of consumers (already acquired or potential) with whom it comes into contact (or that it aims to intercept). It is an approach — which is based on technological premises and has important cultural implications — that is increasingly adopted by organizations of all sectors and sizes.” They go on to explain the advantages of digital marketing, which include:
• the ability to target ads with a high level of personalization,
• achieving a higher level of engagement with target audiences, and
• maximizing ROI.
They conclude, “With data-driven marketing, data represents the starting point for creating effective and targeted campaigns, promotions and initiatives of various kinds.” Even though data might be the starting point, the benefits derived from that data are unlocked by leveraging cognitive technology (aka artificial intelligence). Ceyhun Yakup Özkardes-Cheung (@YakupCheung), an AI content manager, explains, “Artificial intelligence is the new frontier of marketing. Marketing with AI has been proven to be a successful strategy for many businesses. It is a new way to reach customers and is much more personalized, targeted and engaging than traditional methods. AI marketing can be used for customer service, sales and marketing, lead generation and more.”[3]
Two words mentioned by Özkardes-Cheung set off alarm bells for consumer advocates. Those words are “personalized” and “targeted.” Many consumers view personalized and targeted ads as breaches of their privacy. Shama Hyder (@Shama), founder and CEO of Zen Media, asks, “Have you ever had an online ad follow you for days on end?”[4] Of course, we all have. Hyder explains, “Like a ghost, it tracks your behaviors with a quiet, sometimes creepy, determination. This e-haunting is thanks to digital marketers, who are tracking your online behaviors to showcase their products and drive sales.” Thanks to “e-haunting,” consumers have begun to fight back. Hyder observes, “[In the past,] marketers relied heavily on third-party cookies to deliver highly-targeted ads. Through various web browsers, they were able to collect sensitive data about consumers and re-target campaigns based on this highly specific information. Utilizing these strategies led to severe privacy risks and the distrust of the public. There is a reason why so many internet users block cookies from their web browsers to this day.”
Is data-driven marketing still relevant?
The easy answer to that question is “yes.” Unfortunately, keeping data-driven marketing relevant is not that easy. Hyder notes, “The world of digital marketing is moving in a new direction. This new age focuses on protecting consumer privacy through less invasive advertising tactics. The tides began to change in 2017 when Apple introduced its Intelligent Tracking Prevention program. This program started the trend of blocking third-party cookies, which are now in the process of being phased out legally by 2023. Browsers like Safari and Firefox are already following Apple’s lead, while Google Chrome is well on its way.” The fact that digital marketing is moving in a new direction is a clear indication that it is not going away. Wendy Gonzalez (@wendykgonzalez1), CEO of Sama, explains, “By mixing fundamental marketing concepts from previous generations with state-of-the-art AI technology, today’s ad agencies and brands can harness machine learning to stay relevant.”[5]
In large measure, remaining relevant starts with the data rather than the analysis. Mariia Lvovych (@mariialvovych), founder and CEO and founder at GetReviewed, observes, “Marketing — in its conventional form — requires using data to ensure success. And that is why famous author and social media scientist Dan Zarella says, ‘Marketing without data is like driving with your eyes closed.’ … Marketing is nothing without data. Decisions made on the basis of data are (often) better decisions.”[6] So how do companies collect data in the age of privacy? The best method is by directly requesting the data from consumers (i.e., first-party data). As Hyder notes, “The age of privacy is asking the e-commerce space to learn about consumers through relationship-building tactics. … With the average American seeing 4,000 to 10,000 ads per day, there is a need for new channels like these to replace the e-haunting of the past and build consumers’ trust.”
It’s a fair question to ask whether a mature digital marketing strategy real makes a difference. According to Boston Consulting Group (BCG) analysts, it does. They report, “New BCG research in 2021 has found that more mature brands increased their sales by an average of 18 percentage points more than their less mature peers (2 more than in 2019) and boosted cost efficiencies by an average of 29 percentage points (16 more than in 2019). These companies outperformed on market share as well, with more than twice as many digitally mature brands increasing their share in [2020] — by 3 percentage points or more on average — than low-maturity brands.”[7]
Concluding Thoughts
In answer to the question posed at the beginning of this article (i.e., Is digital marketing the future or the past?), experts seem to be in agreement that digital marketing still represents the future of advertising. BCG analysts conclude, “The factors influencing digital marketing maturity will evolve with time, of course, as new technologies disrupt the market and as competitors further develop their capabilities. Nascent and emerging brands have their work cut out for them: unless they move up the maturity curve quickly, they risk becoming irrelevant to consumers.” At the same time, companies need to be aware that being driven by the wrong data can also risk their becoming irrelevant to consumers. Michael Baer (@Michaelbaer1), a marketing executive with Stratecution Consulting, explains, “Data can be unclean — or worse, misleading or meaningless. … Data can be filled with errors or holes. Spending time and resources on bad data is not just a waste of time, but a danger to your brand. … Activating on bad data obviously won’t produce the results you’re looking for.”[8]
He concludes, “A better approach to being ‘data-driven’ is being ‘data-informed’ — the happy medium between leveraging experience and instinct only, versus being completely reliant on data. Whatever it’s called, this is the key — using data in conjunction with experience, instinct, and business strategy. Ensure you are making decisions based on data, but within a larger context of market, users, goals, and vision.”
Footnotes
[1] Marketing Team, “Data-driven marketing: why companies can no longer do without it,” Doxee Blog, 26 April 2022.
[2] Bryan Leach, “The Next Frontier in Digital Advertising,” AdAge, 21June 2022.
[3] Ceyhun Yakup Özkardes-Cheung, “How AI Ads Are Disrupting Marketing,” Entrepreneur, 25 May 2022.
[4] Shama Hyder, “How To Do Digital Marketing in the Age of Privacy,” Inc., 20 May 2022.
[5] Wendy Gonzalez, “How Machine Learning Is Shaping The Future Of Advertising,” Forbes, 18 January 2022.
[6] Mariia Lvovych, “Role of big data in digital marketing,” Venture Beat, 5 June 2022.
[7] Kristi Rogers, Javier Pérez Moiño, Henry Leon, and Alberto Poncela, “The Fast Track to Digital Marketing Maturity,” Boston Consulting Group, 7 September 2021.
[8] Michael Baer, “The Risks Of Being Too Data-Driven,” The Marketing Insider, 20 December 2021.
