The Barriers to Great Personalization

Last Updated: December 16, 2021

From mass media to digital messaging, marketers are rapidly moving toward a place of hyper-personalized engagement. Companies are wrestling to address consumers’ expectations that brands know who they are. In the struggle, brands are running headlong into a common set of barriers. In this piece, Matt Mobley, CTO at Merkle will discuss these barriers including, identifying the consumer, using data and insights to create relevance and maintaining the consumer identity across the entire consumer experience, and how marketers can overcome them. 

From media to digital messaging, marketers are rapidly moving toward a place of hyper-personalized engagement. Companies are wrestling to address consumers’ expectations that brands know who they are. In the struggle, brands are running headlong into a common set of barriers: identifying the consumer, using data and insights to create relevance, and maintaining the consumer identity across the entire consumer experience. Personalization can reduce acquisition costs by 50 percentOpens a new window , lift revenues by five to 15 percent, and increase the efficiency of marketing spend by 10 to 30 percent. This means personalizationOpens a new window at scale is an absolute imperative for marketers to achieve business outcomes.

Learn More: 3 Step Identity Strategy for Hyper-PersonalizationOpens a new window

The Current State of Identity Spending 

The ability to recognize the consumer at every touchpoint is the Achilles’ heel for most marketers. That’s why they allocate a significant portion of their marketing technology budget to it. Indeed, 68 percent of US companiesOpens a new window and 82 percent of UK companies spend 16 percent or more of their marketing technology budget on identity alone. With this level of spend, we should be seeing a rise in the maturity levels of an organization’s ability to identify consumers. However, according to one survey, which is an ongoing tool used to assess the maturity of Merkle clients, found that 75 percent of US organizations are still in the developing stages of their identity maturity. Overall, this points to a massive capability gap. Are companies wasting spend on identity capabilities?

This year, US marketers will invest nearly $900 million in services and solutions focused exclusively on identity and, this is expected to grow to $2.6 billion by 2022Opens a new window .

Often, the channel is viewed as the primary conduit for engagement with the consumer. In reality, it is just the presentation layer. Data and analytics drive the experience. The primary component for channel personalization is the identifier (e.g., email address, cookie, device ID) used to engage the consumer. Yet marketers are missing the boat – they are spending in the absence of a sound identity strategy to address their entire identity scope: first-party, second-party, and third-party identifiers.

Investing in A Balance of Management and Operational Technology

Identity drives our ability to know who we are engaging, while analytics provide our ability to be relevant. Companies spend a large portion of their marketing technology budget on capabilities to manage data and insights.

A portion of the management technology budget is reserved for operational technology, which enables engagements to be relevant by adding context, such as data, intelligence, and analytics to each customer interaction. Only 1/4 of marketers spend equally in these areas, with about 1/3 of marketers spending completely on one side versus the other. This imbalance is a massive problem. Marketers should be leveraging marketing technology budgets for operational technologies, but this should not be done at the expense of the management technologies. We need both to create value. Oftentimes, these technologies can operationalize identity, data, and insights. When they are operationalized, every channel can leverage this single source of truth to apply identity, context, and intelligence to create a shared, relevant experience across channels.

Learn More: Here’s How You Can Take Your Loyalty Program GlobalOpens a new window

The Evolving Roles of IT and Marketing in Data Literacy

A frequent challenge lies in the fact that management technology investments are modeled from traditional IT design patterns around building data warehouses. They are highly rationalized data assets controlled by IT structures that don’t provide an agile enough environment for a marketing organization to function.

This problem is two-fold:

1. IT applies control because, in many cases, marketers don’t have enough technical data literacy in their organization to remove these controls.

2. The level of data literacy demonstrated by the business informs the relationship between data science and marketing.

In order for marketing organizations to quickly react to consumer demands and market conditions, a pact must be forged between IT and marketing. As marketing increases technical data literacy, IT will function as a provider of data services and allow the business to be the ultimate controller of how they will consume and use data. This does not circumvent any IT-based process around compliance control and risk mitigation, but it draws a line saying that the business should control the rules of engagement when it comes to data.

As organizations drive toward more personal interactions, they need to be hyper-focused on the key drivers to personalization successOpens a new window : identity, data, and insights. Being able to leverage all of these components together in an agile way is the only path to differentiated experiences. Brands must invest in technologies that allow them to know their customer and operationalize their knowledge. Without these investments, organizations are left with a fragmented and unfulfilling customer experience, limiting marketing success.

Customers view their experience with your brand as part of the product. It shouldn’t be your weakest feature.

Matthew Mobley
Matt leads Merkle’s Enterprise Technology Group and has 20 years of IT experience with 16 years focused on marketing technologies. Merkle’s Enterprise Technology Group is focused on marketing technology innovations that enable Merkle’s clients to achieve Connected CRM. These innovations are focused around Connected Recognition, cross-channel event management, real-time interaction management, and delivering personalized optimized consumer experiences. He has helped clients evolve and improve their marketing efforts around multi-channel customer relationship management, and he has specific experience from traditional data warehousing to big data management and from analysis to channel execution. These efforts have included the integration of traditional channels to digital channels and media in order to support acquisition, retention, and loyalty. Prior to joining Merkle, Matt was a senior executive with other leading marketing service providers. In those roles, he managed client marketing solutions, enterprise decision management, and marketing consulting practices. For one of those marketing service providers, Matt established and led the European consulting practice that provided strategic marketing advisory services covering marketing strategy, advanced analytics, and marketing technology. He has provided these services across multiple industries: financial services, retail, telecommunications, travel, and entertainment. Matt was a member of the United States Air Force.
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