30-second summary:
The National Retail Federation has projected holiday sales to cross 10 percent grossing sales between $843.4bn and $859bn
Business leaders must rethink their online presence, consumer experience, operations, and data practices to ensure they can thrive in a digital future
Liberty Latin America’s global head of digital marketing – Sr. Director shares advice and recommendations for becoming a consumer-first brand
The fading away of third-party cookies is an inevitable reform set to change the face of the advertising landscape for better. First-party data is taking center stage has already tapped into the zones of customer trust, brand integrity, and ethical marketing. All these elements decide a brand’s fate in the market and directly impact brand presence, customer experience, and share of voice.
The cookie death will have a crippling effect on programmatic advertising and its revenues. Brands’ ability to target customers, create advanced audience segments, and measure the overall impact of campaigns will hit revenues that are derived from advertising efforts. So, how can marketing leaders make this a desirable change that crystallizes growth and drives positive organizational shifts?
The polarization and first steps to creating a level playing field
Several industries will face a higher level of data loss, challenges, and complexity. Automotive and consumer packaged goods (CPG) industries, where brands do not directly transact with the final customers, stand a greater chance of losing the lion’s share of their data visibility and growth. Meanwhile, ecommerce and retail are a step closer to the customer and their first-party data which makes them the obvious front runners.
The universal message remains the same, however – to retain market share businesses across all industries need to think fast and devise strategies to establish genuine relationships with their end consumers. This will be the sole route to ensure they are capturing and using first-party data as desired. Leaders need to consider long-term implications and strategically plan their contingency to navigate uncertainty, risk, and compliance.
Who will benefit?
Walled gardens will reap huge benefits from this transformation. This means the likes of Google, Meta, and Amazon will capitalize on the situation. MarTech providers are scrambling to develop new ad targeting alternatives that are reliable, compliant, and ethical. There are interesting efforts from Google and the IAB which make the future an interesting Rubik’s cube.
The role of the CMO – CTO – CIO in building a first-party data strategy
All three of these functions need to recognize that the value of direct engagements with the customers will increase. And that has implications from a marketing as well as technology perspective. Because ultimately, what advertisers need to think is, “how are we going to create those consumer connections?” Those valuable engagements happen across multiple touchpoints and the leadership team needs to think about how they can build the brand ecosystem around this reality.
Technology, information management, and marketing need to figure out effective ways to build direct relationships with their consumers. Creating a two-way value exchange in which the consumer gets something, and the brand gets their data, will be mutually rewarding. The bottom line is that these functions need to orchestrate how this new operating model works across the organization.
Questions that will facilitate the C-suite trio
It is easier said than done but communication is key. Asking the right questions and collectively exploring solutions can work wonders and help navigate the toughest conversations. Business leaders are custodians of their respective brands and must put themselves in the customer’s shoes.
Here are some key questions that can serve as a crude checklist to set the foundation of a first-party data ecosystem.
Questions the CMO must ask
“What kinds of technology do we have in place to capture that first-party data?”
“How can we maximize the data that we capture?”
“How can we progress towards a 360-degree view of the customer?”
“How do we make sure that we are stitching that data together to have a comprehensive view of the customer?”
“How are we making sure that we are driving value to the business?”
The latter is a technological challenge which is where the technology function steps in, as it typically has visibility about the data a brand is already collecting from its customers
Questions for the CTO
“What are the (missed) touchpoints where we can capture data that our technology needs to manage?”
“What are the digital touchpoints that our consumers use?”
“How can we make sure that we’re capturing the desired data?”
“How can we ensure the best possible usage of the captured data and technology?”
Questions for the CIO
Since data compliance sits with the CIO, they know that the risks of not being data compliant can damage revenues, reputation, and the liberty to advertise.
“How can we strike a balance between keeping our promise to our customers and regulatory compliance while collecting data?”
“How are we maintaining discipline in using the collected data to truly deliver more personalized experiences?”
“What do those personalized experiences really look like?”
Key components for marketing and sales to capture first-party data
It starts with identifying gaps and opportunities in the consumer experience with online as well as offline transactions. The data can be channeled into walled gardens, maybe even use some AI technology for identification. Marketers need to create experiences that allow them to engage with those consumers. Don’t forget, meaningful interactions trump transactional interactions.
For example, if you are a car manufacturer, what kinds of experiences are you going to provide to your customers, before and after the purchase to create that relationship with them? You can help them choose the perfect product fit. Deliver after-sales services that are an extension of the brand experience. This way you build a relationship where trust is the reward. Once you win consumer trust you nurture that relationship over time.
Building genuine relationships
A lot of people say you need to build trust, I don’t necessarily agree with that. You need to build a genuine relationship that breeds trust.
Understand the customer pain points/needs > Build genuine relations > Trust follows > Sales grow
The key elements of marketing and sales should be built on the foundation focused on forming and nurturing genuine customer relationships.
Best practices to build a first-party data ecosystem
The first thing you need to do is map out all the different interactions that you have with your end consumers. This gives you a breadcrumb view of the interactions and touchpoints your brand has with those consumers. Treat these touchpoints as opportunities to either capture more data or activate your existing data.
Once you create a map of your data universe you can identify gaps and pain points.
Marketing leaders must ask themselves:
Does your brand have a loyalty program that can support clients after the sale?
Does your customer buy offline?
If you have offline buyers, how can you support your customer’s journey to that physical store?
Can you architect an offline customer journey online that will help your brand better serve the customer base?
The car manufacturing industry is a great example of how brands and car dealers have an effective way of tying up touchpoints. For example, before the customer physically visits a car dealership/retailer they’ve already customized their car, chosen everything per their choice, and typically have a printed-out version of the work done. This is a near-perfect example of what is meant by mapping out and harmonizing offline and online touchpoints.
After this, you begin to craft those consumer experiences.
Identify the pillars of your ideal customer experience
Think about how you can build assets that will create an ecosystem that feeds trust and caters seamless consumer experiences. Apple is a stellar example. In 2018, Apple Music had a ball-park revenue of $6.7bn per year – and this is just a drop in the sea.
Apple has the App Store, iPhones, iPads, MacBooks, Apple Music, and a host of online products and services that are monetized. Once a person has a single ID, which is their Apple ID they enjoy access to its ecosystem which is a bundle of products and services, like the Apple TV.
Think about your brand and how you can architect a similar experience. Pool in views across the business to make a checklist. Use it to design meaningful experiences, and ideally, make your brand customer-first, so that it cares about the consumer beyond just transactions.
Rethink your marketing technology
The next layer is re-evaluating your marketing technology to ensure you have the right stack. Use it to bolster your consumer profiling to enable accurate targeting and higher personalization built into your ecosystem.
Marketing leaders must have an engine that is aligned with the business model and team operations. The martech stack must work as one entity that consorts all the loose ends together rather than serve disconnected channels that see a myriad of meaningless customer interactions.
The role of customer data platforms (CDPs) is becoming increasingly prominent to stitch together your brand’s data universe.
Optimize your “walled garden”
Make the most of your walled garden capabilities. Considering that you would by now have a clear understanding of how you’re capturing data and your technology stack that enables this – use your marketing strategies to activate this data. Don’t limit this to just your own servers running data centers. Make a very solid strategy for segmentation, user identification, and then use that information to create look-alike segments in social media and search.
Leverage all the abilities these platforms provide to brands for finding similar audiences to tap new prospects that are of high value to you.
Allocate budgets for paid, organic, and owned media
The last point I will make is that once you have all the above elements in place, you need to think, “what is the right mix for all unpaid media?”
Try to maximize parts of your ecosystem that are related to owned media. Make sure that you get as much spread as you can with your own channels. Use that visibility and branding to capture new audiences in ways that will enrich your data ecosystem.
Finally, use both sets of paid media effectively to fill in the gaps where you cannot necessarily get the right mix with the owned channels.
Advice for the holiday season
The pandemic has pushed more people to buy and transact online. Use the holiday season as short-term opportunities. First, maximize the value of your walled gardens. Use it to identify look-alike audiences and segments relevant to your brand and utilize your walled garden platforms as a great source of revenue generation.
1. Use social listening to inform and drive your strategy
Listening to your customers will fuel your strategy and results as it exactly points in the direction of your customer service gaps, wins, and losses.
Customers actively share their brand experiences on social media platforms. Remember, social listening is not the strategy, but the enabler of your digital marketing strategy.
Use these social signals and sentiment analysis to understand your customer’s post-sales service expectations and the product quality that will help pivot your market strategy in real-time.
2. Hyper target your advertising placements
Advertising placements though old-fashioned are a returning trend. Think tactically about how your brand and placements can stand out with hyper-targeting. Don’t try to go broad. Instead, go very specific and later focus on your audiences that can move the ROI needle.
For instance, when you think about contextual advertising, there are many places where you can place your ads. If you look closer, you realize that the market is highly segmented even though for the same product category.
There are many different placements for contextual advertisers that will cater to different audiences – male versus female, young versus mature, tech-savvy versus non-tech-savvy, you can try to do that segmentation exercise.
3. Embrace experimentation
In my experience, many brands don’t want to run experiments during holiday season because of the size of the commercial opportunity. However, the holiday season is a great time to experiment due to the high volume. I advise marketing leaders to test new things and observe what works for their brand. This is the best time to not just generate revenue but also tap into new ways to engage your audience in various contexts that will add insights for your long-term strategy.
It can be a safe bet to experiment with say, 10 percent of your audiences. You could also use some historical data to identify audiences that would be open to experimenting with your brand. Because if your experiment works it gives you the benefit of real-time insight – that paired with agility can help your brand scale and implement, resulting in amplified results. Don’t be afraid to experiment, adopt a test and learn mindset.
4. Treat holiday season data as seeds of your long-term brand strategy
If you haven’t already prepared yourself with the right technology and are building up your first-party data, the holiday season is a great place to start. You can have a head start, hit the ground running, capture a lot of consumer insights and capitalize on it throughout the year. That’s a huge window of opportunity for brands right around the corner.
Closing note
Remember, your strategy works for you, only if it works for the consumer. That is paramount. You’re missing the point if you’re not viewing your brand experience from the consumer’s perspective. It is not about you or your brand it is about the consumer and what they need. In simple translation – how relevant is your brand and your products for a particular consumer in a particular moment of time?
You can’t escape failure if you ignore consumer relevance. Because if you are not consumer first, you are probably consumer last.
Luis Navarrete Gómez is the global head of digital marketing – Sr. Director at Liberty Latin America. He is also an esteemed ClickZ advisory board member and has previously served as global head of ecommerce marketing at the LEGO group. Luis can also be found on Twitter @Luis_Navarrete.
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