Scott Symonds, Managing Director, Media of AKQA Media
What do three of the top six largest companies in the world by market capitalization have in common? Personalization.
Personalization as a Business Driver
Google (Alphabet Inc.), Amazon, and Facebook all use personalization as a core component of their business’s intellectual property, getting smarter every time one of their hundred million or billion plus consumers use their product.
These companies also use the positive flywheel-like effect of personalization across a massive scale of consumer engagement. They do this to not only further evolve their business product and competitive moat, but to refine their opportunity to continually deliver more predictive and personalized product to their consumers.
These three personalization powerhouses are also not just the youngest three members of the world’s largest companies, but they are also the fastest growing. For reference, the other three are Apple, Microsoft, and Berkshire Hathaway.
Companies of all sizes making personalization a core part of their business IP are also among the most successful and disruptive firms out there. For example: Netflix, Tesla, Uber, and Spotify are all rapid growth industry disruptors based on personalized services delivered through algorithmic learning and insights vs. one-size-doesn’t-fit-all methodologies.
Personalization as a Marketing Strategy
If personalization is good business, maybe personalization can also be good marketing?
Many smart marketers have already started to ask that question, and many smart marketing technology brands, consultants, agencies, and providers are already starting to answer it.
According to a recent McKinsey article by Julien Boudet, Brian Gregg, Jason Heller, and Caroline Tufft: “data-activated marketing based on a person’s real-time needs, interests, and behaviors represents an important part of the new horizon of growth. It can boost total sales by 15 to 20 percent, and digital sales even more while significantly improving the ROI on marketing spend across marketing channels.”
Marketing technology providers like Google, Adobe, Salesforce, and Oracle are realizing this opportunity to boost sales and ROI for their customers by building tools and best practices to define and automate marketing personalization.
At their recent client summit in Las Vegas, Adobe’s Vice President of Technology, Amit Kamath, shared his thoughts for how the industry can identify and break legacy habits to better prepare their approach for the personalization era. He sees a primary challenge enterprises currently face, which is that they are organized around their own departments, channels, or products. However, a genuine consumer-first personalization perspective must break down these categories and work from the consumer outward across all channels and products.
If personalization is good business, maybe personalization can also be good marketing
Mr. Kamath’s suggested solution is to break down the idea of “intelligence in silos” and instead think holistically across these three categories of applied intelligence:
1. Customer intelligence, which focuses on a customer’s propensity to buy something
2. Content intelligence, which seeks to understand how to pair the right content with the right consumer
3. Context intelligence, which focuses on other signals like location, time of day and where the ads are appearing
With this construct, Mr. Kamath said that personalized marketing can then be ‘turbocharged’ with machine learning applications that can define higher fidelity consumer segments and make real-time data-derived decisions that simply could not be done before without this philosophy and technology. Kamath sees machine learning as ‘table stakes’ in the personalization era of business and marketing and any business owner who remains ‘wary’ of it probably needs to reassess their fears very quickly if they want to compete in the global marketplace.
McKinsey calls this idea of a personalization platform powered by machine learning the “Customer Data Platform (CDP)—a data discovery and ‘decisioning’ platform. The CDP makes it possible for marketers to scale data-driven customer interactions in real time.”
Fortunately, McKinsey also says, “unlike a wholesale IT transformation, deploying a CDP isn’t a replacement of current customer-data systems, but rather an operational solution that can piggyback on existing systems. In our experience, many marketers already have a large part of the marketing-technology equation in house; they’re just not using it properly.”
As Managing Director of AKQA’s (a WPP company) Media and Data practice, I agree with both Mr. Kamath and McKinsey in their perspective on the competitive necessity of marketing personalization as deployed through a CDP. Our number one growth area in our practice is working with clients to help them use their marketing technology more effectively. This helps them to harness their first part data more efficiently, apply better business insights, and use programmatic media to deliver more targeted messaging.
Fast moving businesses native to the 21st century have learned to create a virtuous circle, or flywheel effect, by using machine learning and personalization applied at scale and redirected back into their businesses to win in the marketplace.
Marketers are now looking at this model and pushing similar technologies and approaches into the marketing suite to create ‘Customer Data Platforms’ (CDPs) that drive more relevant customer experiences and more ROI for their companies.
If mass production and mass media powered the economy of the 21st century through low cost distribution of lowest common denominator products, then the 21st century already looks like it will create a new model around consumer-centered personalization at scale and powered by data, machine learning, and the marketing technology that pulls it all together.
If they haven’t started already, smart c-suite decision makers should start monitoring these trends and make sure they have the right structures, people, partners, and technology to make sure they are prepared for success in the personalization era of the 21st century.