If I really knew what was coming down the pike, I would quietly invest in the market that benefits from my so-called predictions and be done with it. I am not much of a gambler. Still, that doesn’t mean I am wrong, but I certainly acknowledge that I might be.
With that bold statement of confidence, here are my quick predictions for marketers next year:
Brands will need to take a stand on marketing and customer data stewardship
Brands need to protect their customer’s data in two ways. The first is cyber security - protecting the customer data in their care from breaches. The second is protecting customer data and privacy from misuse. Think Facebook and Cambridge Analytica.
Both protections are a part of a brand’s customer data stewardship, but it’s the second risk – misuse – that brands will be held accountable later next year.
So far, brands have largely ducked the issue in regards to marketing data. Many are happy to let Facebook take the heat while growing their use of that ad platform (and other data targeting) to reach prospects and customers. No brand wants to be accused of misusing customer data. Better to let these monolithic media companies take the blame. And just what is “misuse” anyhow? Using new data sources and combinations to more effectively reach and engage people with content, offers and messages that are increasingly relevant to them is the positive promise of advanced customer data management. The dark side is the misuse of the new knowledge that brands may accrue on their customers. The examples often cited are health care insurers amassing behavioral data about customers that cause them to stop insuring them. I don’t know if that is happening but I can certainly imagine it.
The Cambridge Analytica example is similar. Gaining access to Facebook user data and unbeknownst to the end user, a company mined that data “to develop "psychographic" profiles of users, and target users with pro-Trump advertising, a claim that Cambridge Analytica denied."
Consumers are paralyzed by the complexity of data and privacy. According to the NYTimes,
“Research by Professor Turow and his colleagues has found that most Americans give up data for relevant ads not because of convenience, but resignation. Rather than participating in a rational exchange, he argues, consumers are giving up their personal information with “a feeling of futility.”
In 2019, the inertia caused by the complexity of the consumer problem will likely be broken by a confluence of events: the application of the GDPR-like California Consumer Privacy Act of 2018, the next brand-goes-too-far data-use scandal, the hubris of the VC community eager to back marketing data startups (especially AI) that promise an invasive set of capabilities and the 2020 election cycle which will show some of this ‘misuse’ in action.
As brands get serious about strengthening customer trust, a few will step forward voluntarily with their own, “customer data stewardship promise.”
Marketing personalization will remain nascent until 2020
Marketing personalization is a hot topic. Customers want it as revealed in the Segment 2017 study summarized by eConsultancy (chart above). Marketers are investing in more advanced capabilities to deliver the right message to the right customer at the right time via the right channel. The martech stack for personalization expands. And so on.
Ecommerce companies are the leaders. They can immediately see the direct impact on sales for sites and email now governed by personalization engines (i.e. “Customers like you also bought…”). The investment has short term gains. But even becoming Amazon overnight is hard.
Then there are the other businesses who can imagine the benefits of personalized marketing. Pretty much every brand out there.
Since this new capability hinges on solid customer data, it’s going to be slow going for a while. The VC and consultant community will push hard for personalization in 2019 eager to see their investments pay out. But brands who get serious about personalization need to get their house in order on data and that requires a cross-enterprise solution. New, significant case studies on marketing personalization won’t start to materialize until 2020. Think of 2019 as the year most marketers figure out just how hard it is and the foundation they need to have in place with data.
Customer Data Platforms (CDPs) will really become a thing
Customer Data Platform is a made-up term. But so are so many terms in marketing. Who would have guessed that ‘account-based marketing’ would have grabbed hold the way it has?
The marketing data world is awash in jargon: DMP, CDP, data lakes, CRM, data warehouse, datamart, and more. Browse a few marketing blogs to compare the definitions for just DMP and CDP and you will see it’s still a little wild west out here. (You can check out my post on the difference here)
A workable definition for Customer Data Platform comes from the CDP Insititute:
"A Customer Data Platform is packaged software that creates a persistent, unified customer database that is accessible to other systems".
This definition has three critical elements:
- "packaged software": the CDP is a prebuilt system that is configured to meet the needs of each client. Some technical resources will be required to set up and maintain the CDP, but it does not require the level of technical skill of a typical data warehouse project. This reduces the time, cost, and risk and gives business users more control over the system, even though they may still need some technical assistance.
- "creates a persistent, unified customer database": the CDP creates a comprehensive view of each customer by capturing data from multiple systems, linking information related to the same customer, and storing the information to track behavior over time. The CDP contains personal identifiers used to target marketing messages and track individual-level marketing results.
- "accessible to other systems": data stored in the CDP can be used by other systems for analysis and to manage customer interactions.
eConsultancy has a great grid (from the CDP Institute) that quickly compares the features of different data assets like CDPs:
The reason CDPs will take hold as a concept is that companies already have master data management (MDM) initiatives underway to organize customer and stakeholder data for the benefit of the entire organization – but not necessarily designed around the needs of marketers.
The marketing and customer experience professionals need a marketing-specific resource, one that is connected to the MDM system yet designed to power marketing content and delivery. CDP’s will become key to delivering personalized marketing. It is certainly possible to design the core functions of a CDP without buying a SaS, CDP-labeled solution. Building it via the IT function is risky and costly business. eConsultancy sums it up,
“A CDP is built with the marketing function in mind. Could you build a CDP yourself? In theory you could, and many custom IT projects try to achieve what a CDP does. Obviously, there are quite some big investments, time and risks involved in a custom project like that.”
CMO’s know that great customer data is foundational to tomorrow's successful marketing. In a recent Forrester study, CMO’s reported the following challenges (and more) to achieving marketing priorities next year:
- Poor quality, inconsistent, or inaccessible customer data 43%
- Poor alignment or collaboration with IT 43%
CMO’s will latch onto CDPs as the marketing data solution that can more easily be communicated to IT while not wholly relying on an IT-build and implementation. CDPs will take hold because marketers need a manageable concept they can rally their people to implement.
The immediate future of marketing hinges on the strength of 1st party data and 'data agility' - the ability to work quickly and easily to combine 1st party and 3rd party data for some benefit.
Other Interesting Predictions
- 6 digital marketing predictions for 2019 - Smart Brief/Kent Lewis
- Content Meets Technology: Marketing Predictions for 2019 - Martech Advisor/Casey Wuestefeld
- The 5 Biggest Marketing Trends For 2019 - CMO.com/Giselle Abramovich
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