Personalisation: Hanging in the Balance

White Paper

Let’s make this personal. We’re all individuals; we all value personal relationships; we’re all impressed by great, personalised service. But today, as we interact, socialise and buy more in the digital space, our ability to enjoy high standards of personalisation is at risk. Extreme views and misperceptions around data and how it is used for marketing are threatening to seriously curtail marketers’ ability to deliver great personalisation and great service. The purpose of this white paper is to consider the various factors and forces at play so that the reader can take a more balanced view of consumer data and how it’s used for marketing.

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Executive Summary

Let’s make this personal. We’re all individuals; we all value personal relationships; we’re all impressed by great, personalised service. But today, as we interact, socialise and buy more in the digital space, our ability to enjoy high standards of personalisation is at risk. Extreme views and misperceptions around data and how it is used for marketing are threatening to seriously curtail marketers’ ability to deliver great personalisation and great service.

The purpose of this white paper is to consider the various factors and forces at play so that the reader can take a more balanced view of consumer data and, in turn, how it’s used for marketing.

Introduction: current attitudes towards data use

At the time of writing, the sun has been around for 4.57 billion years1. In that time, it has proved not only essential to us but a welcome friend; how many of us don’t enjoy a sunny day? However, that same ‘friend’ is in many respects a massive nuclear engine which not only sounds alarming: looked at the wrong way, it can cause real harm.

Data, like the sun or any other energy source, is neither inherently good nor bad. Handled carefully and put to good use it greatly enhances our lives. However, if it’s misused or abused, the consequences can be serious.

Data - a private function?

Before going any further, a key aspect has to be security. The baseline for security and consumer privacy must be set extremely high for all uses of personal data. We must keep data safe, secure and operating both within the letter and the spirit of the law. We must be transparent about how we collect and use data and we must be responsive to questions whether raised by regulators or the public.

So why are some people concerned about the use of personal data? It’s natural really, given some news stories and growing consumer awareness of personal data as we generate increasing amounts of data across our many and varied devices.

A 2012 study by the DMA (UK) and Future Foundation2 highlighted some pertinent findings:

  • 70%+ of everyone in the EU uses the Internet (50% via smartphones)
  • 65% of people expect organisations to use data to improve service
  • 80% believe disclosing data is part of modern life
  • 70% believe attitudes to privacy are changing.

The research segmented individuals into three categories according to the terms of their attitudes to data use:

  • 53% were ‘pragmatists’ (biased towards being female and under 25)

    • Pragmatists unsurprisingly are prepared to allow the use of data so long as it delivers value to them and is properly managed 
  • ​​16% were ‘unconcerned’ (biased towards being male and under 25)
    • The unconcerned are very laissez-faire in their views, relatively unconcerned with how their data is being used
  • 31% were ‘fundamentalists’ (biased towards older males with low Web use and little to no use of social media)
    • Fundamentalists are very suspicious of the use of data and want to see it more limited and regulated.

Other fascinating findings include:

  • 80% of people surveyed understand ‘tracking techniques’ are employed by organisations…
  •  …while only 30% agree it yields an improvement.

Narrowing the perception gap

The disconnect needs to be addressed and is a key metric for this debate. The survey also found that ‘trust’ is the number one reason for sharing data; so it follows that if consumers know data is being ‘tracked’ (admittedly an emotive term) but far fewer see it making a difference, then why would they continue to trust those who have and use their data? As this paper will go on to suggest, the prime goal of the marketer and data industry, beyond the baseline of keeping data safe, must be to deliver value to the consumer.

Unfortunately, some people have a ‘one-size-fits-all’ understanding of data which greatly clouds their perceptions of our industry. Personal data may be used for many purposes but more sensationalist commentators group data used for marketing in exactly the same category as data used for far more sensitive purposes such as financial services, healthcare, and even crime and security; this is ludicrous.

Personalisation - An Acxiom Viewpoint

Returning to the consumer segments contained in the introduction and contrasting the ‘fundamentalists’ with the ‘unconcerned’, there are parallels to be drawn with a separate Acxiom white paper, ‘Data In Balance’. The “fundamentalists” would severely restrict the use of data meaning it would be equally likely a 25-year-old interested in live music would receive a cruise holiday offer tailored for retired people, while a 70-year-old would receive a promotion for new music programming software. This would be a step back for targeting, one of the foundations of good marketing and good business.

By contrast, the ‘unconcerned’ may welcome a world where registering with an employment agency is publicly available for our bosses to see, and where details of what food and drink we consume is available to the healthcare and financial industries, so they may determine what restrictions to place on our care provisions or what premium to charge us for cover. This is also a position that the majority would surely want to avoid.

The constraints of freedom

The problem is how much people really understand when it comes to the uses of data and the implications of that. There is always a risk to using any data; the risk of it going wrong. This needs to be balanced against the potential upside. Overall this balance is not particularly well understood and while it will be rightly debated for more sensitive uses of data, the consumer should be encouraged to understand that marketing’s use of data is merely to do two things: deliver a more relevant message that brands hope will result in the consumer spending money with them, and also to fund the provision of free services. Here, the argument to process is relatively compelling.

According to the Internet Advertising Bureau (Europe), there is a ‘marketing deficit’ of at least €100bn per annum across Western Europe and the US3. This means that if consumer data were seriously or completely restricted, leading to a huge drop in advertising revenue, then we as consumers would likely face the prospect of having to fund that revenue deficit if we still wanted to enjoy many online services for free, such as social sites and search engines.

Would consumers really want to pay to search or go social, for example ‘unlimited searches for just £15 a month’? The irony is they would have to submit more personal data to do so by registering and providing financial information. That’s before the fuss of having to log in every time as the browser will conveniently ‘forget you’.

The alternative is the continued careful use of data to enable ever more targeted and personalised digital and datadriven marketing. While not every message or offer will be perfect, surely if you’re to see an ad on your device, you’d prefer it to be of some relevance rather than irrelevant? The chances are that for someone who lives in a flat, an ad for a lawnmower or garden shed is likely to be less relevant than one targeted at them based on their love of travel or fashion.

A virtuous data triangle

The consumer sometimes asks the question, “Why are you making money out of my personal data?” The answer is, it’s all part of the economy and value exchange. Think of a triangle. In one corner advertisers such as retailers and manufacturers pay publishers and marketing technology firms, based in another corner, to help them reach customers and they get service and solutions in return. In the final corner is the consumer, who pays the advertisers for goods and services, and gets value from those goods and services in return.

So, on two of the three sides, value flows one way and money the other. However, there is no direct payment from consumers to publishers and marketing technology firms, despite consumers getting value from them in the form of search services, social media and the like. The implied payment is publishers receiving consumer data they can use to increase the performance of their services and get paid by their advertisers.

Some ask about personal data lockers and the ability for the consumer to control their data. If this had been the standard approach from the outset it may have worked very well. The issue is, it isn’t an approach that was applied consistently across countries and channels. The more consumers understand how sensible use of their data can help not only the economy but themselves too, the better. If personal data lockers of one kind or another help this awareness and appreciation, then that’s a good thing. The only caveat is just how effective can they be in practice; will there be one standard approach or many versions?

In the US, Acxiom launched in summer 2013. The website is a consumer-focused web portal that enables consumers to learn more about how their data helps companies create better and more relevant online experiences. Furthermore, the portal enables consumers to see basic data elements featuring significantly more attributes and a wider breadth of sources than any company had ever before made available to consumers at this scale. Once consumers access their data, they can decide if they are comfortable with it, would like to update any elements of it, or opt out – either from online marketing only or from all of Acxiom’s marketing efforts.

Social mores

Social media is accelerating this issue and is a major driver of ‘big data’. Social media allows consumers to reveal more about themselves than any other data-enabled marketing tool. It can accelerate consumer and brand relationships; good and bad, brands can be built quickly and burned even quicker!

Social media is also an equaliser. When brands do a good job of prospecting or serving customers, the knock-on effect flows through quicker than ever before; brands need to get social right. The keys to this are respecting the fact that consumers often see the social space as ‘their space’; they see it as personal so we, as marketers, need to respect that.

Another aspect of social media and proliferation of channels is the need to avoid ‘brand schizophrenia’. Would we speak to our best friend on the phone but ignore them in the street? No. Would we answer our friend’s emails but ignore every text? No. So, unless social media is connected to other media, we run the risk of presenting the consumer, our prospects and customers, with a disjointed, unconnected and impersonalised experience. The consumer will notice!

Conclusion: Your next best action

The message for marketers is clear; use all data, whether big data or not, with care and sensitivity but do a great job of putting it to good use. Connect across media, channels and devices, to deliver a genuinely impressive experience for both prospects and customers. Consumers have embraced the digital age and will love the personalisation they crave, the personalisation we can deliver. Common sense should prevail and everyone will view data in balance so long as we as marketers really do deliver the personalisation we aim to provide – and that ball is in our court, for now.

Practical steps to drive consumer value

1. Put the Customer

First Always easier said than done. However, let the consumer’s interests shape the reasons you’re collecting and using data - to do a better job of engaging them so that they reward the brands doing just that - and how you protect that data. Let the prime measure be customer value 

2. Keep Data in Balance 

Orientate marketing, but ideally the whole business, to the consumer and driving value for them. The consumer must see value in return for the data they are willing to see others use. This generates trust

3. Calibrate Based on Context

Explore and understand the various uses of data from the extreme of crime and security to marketing, and create the appropriate balanced use of data in light of the marketing context

4. Protect Data

Ensure the fundamental baseline is set very high. Do not take any chances with data collection, data security or data use. Operate within the letter and spirit of the law and if in doubt, seek expert help – you must not get this wrong

5. Be Open and Transparent

Take the opportunity to explain that data used for marketing is very different to personal data being used for other reasons. The main drivers are better targeting and personalisation; brands that do this well are rewarded by happier consumers. Those doing the right thing have nothing to hide

6. Social Media = Accelerator

It’s a great opportunity and threat and brings brands very close to consumers. Treat the data with care; avoid what could be misinterpreted as intrusion or snooping. High responsiveness and action are expected from good social brands by consumers; be ready to deliver against this expectation

7. Connect Everywhere

Consumers are everywhere, so connect data everywhere. Silos should have been eradicated years ago and they still persist. Brands that fail to deliver personalisation across all channels, media and devices will be the ones that fail to meet modern consumers’ expectations and begin to fail

8. Deliver Value and Build Trust

Value for consumers, value for the brand. More of the right kind of customers is what every brand wants. Use data responsibly and carefully. There’s nothing wrong with using data creatively, finding smart ways to derive and apply insights. But whatever you do, deliver great personalisation to the consumer - the brands that do so will be rewarded.

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