Personalisation in 2023: What do the experts predict?

Personalisation – is it the key to conversion and the logical endpoint for comms, or merely a marketing pipedream?

The answer is likely somewhere between the two, but to give us some more perspective on what marketers should expect from personalisation in 2023, I asked the opinions of some experts at AI-powered SaaS content platforms Movable Ink and Phrasee, as well as some ad targeting and data specialists (from InfoSum, Innovid, Space & Time, TripleLift, Wunderkind, Zefr). Econsultancy members can also consult our new Personalisation Best Practice Guide.

With uncertainty brought about by targeting constraints, changing consumer behaviour and privacy laws, what’s next for personalisation?

There still seems to be debate about personalisation that stems from differing definitions, or some expectation that it’s only for those with huge resources.

Do you find that strange, or is it just a complex area that means different things to different brands?

Parry Malm, CEO, Phrasee:

“Here’s the thing about personalisation: don’t believe (all) the hype. You don’t need to, and shouldn’t, personalise most things. There are, however, very specific and powerful use cases for personalisation. Spend your time figuring out what those are, focus on them, but don’t do it to the detriment of your other tactics. Personalisation is great, but it shouldn’t be the only tool in your toolbox.”

Alison Lindland, Executive Vice President and Chief Client Officer, Movable Ink:

“Personalisation has been around for years. The problem is most brands—because of data or technological limitations—are still “personalising” at the segment level. All of that is to say, they’re not really personalising at all.

“While marketers know the value of personalisation in building loyalty and trust, they’re unable to deliver uniquely tailored creative content for each customer; more than that, they’re unable to deliver it in an efficient, scalable way. Without the right technology or data access, it’s humanly impossible to deliver one-to-one personalisation across millions of customers.

“It’s less of a resource issue and more of a philosophical one. When nearly 70% of consumers say they’re more likely to be a loyal customer or increase their purchase rates when brands build personal relationships with them, as marketers it’s pretty much a no brainer.”

Dan Mouradian, VP, Global Sales Solutions, Innovid:

“Brands and agencies don’t need huge resources to take advantage of personalisation. The plug and play nature of technologies such as dynamic creative optimisation (DCO) allow campaigns of any size to enjoy the benefits of personalisation, such as improved media efficiency and increased purchase intent.

“That doesn’t mean DCO is a magic bullet — poor messaging and misaligned personalisation signals paired with audiences will drag down any campaign — but it can be easily integrated into existing workflows to both drive incremental lift and reduce workload. As cross-platform measurement improves, particularly in the fragmented Connected TV ecosystem, the capabilities of personalisation can be extended to omnichannel campaigns to optimise targeting wherever the desired audience can be found.”

With ATT and cookie deprecation there’s more talk of a renaissance in ‘old-school’ creative. Is that overblown – what does it mean for personalisation?

Parry Malm, Phrasee:

“Personalisation is the natural adversary to the marketing zeitgeist.  For example: say to anyone in North America who grew up in the 90s “Wazzzuuuppppp!!!” and they’ll know it’s Budweiser.  This campaign was far-reaching, memorable, and impactful – and still is remembered today. Conversely – only the rarest and best-executed personalised campaigns reach that level of ubiquity; one recent example, Spotify Unwrapped, is actually faux personalised – the overall campaign is a shared experience, and the content is unique.  The lesson?  Not every campaign needs to be personalised, and even those that do, not everything in the campaign needs to be personalised.” 

In your experience, does the current economic climate mean consumers are more accepting of triggered and personalised messaging?

Wulfric Light-Wilkinson, General Manager International, Wunderkind:

“Consumers will ultimately always seek value for money, but the ongoing cost of living crisis has certainly heightened price awareness. Our recent survey of 500 UK consumers reveals that 80.2% considered price to be the most important factor in their decision to purchase, while 41.2% said they planned to compare prices more diligently [in the 2022] festive shopping season, compared to [2021].

“This means that consumers are definitely in ‘deal-seeking mode’ and will be particularly receptive to timely recommendations and offers from businesses. This is especially the case when the messaging is relevant, personalised and  based on previously viewed products, categories and basket behaviour…

“Personalised messaging consistently performs better than generic communications because as consumers, we like to hear about products and offers that are relevant to us. If retailers get their messaging right, it can generate conversion rate uplifts of between 2-5%, on average – with the added benefit of making customers feel genuinely seen and valued. A separate survey of 2,000 UK consumers we conducted [in 2021] found that two-thirds (68%) are ‘less likely to engage with content that feels automated’, while a similar proportion (69%) are ‘more likely to engage with content that feels as though it has been tailored to their needs and interests’.

“Although these results aren’t surprising, there’s a real urgency for retailers to get it right given the current climate. Customer acquisition costs are rising – Facebook CPAs increased by 43% from 2021-2022 – and with third-party cookies being phased out in 2024, ecommerce businesses need to focus on driving revenue efficiently. By growing their owned audiences, building up their first-party data – and then targeting those audiences with relevant 1:1 messaging – brands can establish a sustainable revenue generation model that’s less reliant on third parties and more resilient in tough economic times.”

Raphaelle Tripet, Managing Director, Demand Sales EMEA, TripleLift:

“I don’t think the current climate is necessarily driving more consumer acceptance towards personalised messaging, rather personalisation techniques have considerably improved over the years meaning consumers have better understanding of what they are gaining from it.

“Consumers are also more mindful and educated about the balance between personalisation and privacy, and are more likely to accept targeted ads as long as they feel in control of how and who accesses their data.

Alison Lindland, Movable Ink: 

“What consumers today are seeking is tangible value and brands have the opportunity to take centre stage with their loyalty programmes. When price is top of mind, consumers need a reason to stay loyal, and sending triggered personalised loyalty offerings is a good reminder of why they should continue to engage with the brand.

“Consumers are also more receptive to non-commercial and more editorially-driven  personalised messaging than ever before, regardless of whether a given consumer is a spender or not .

“I anticipate more brands leaning into content the way media brands do, and will be driven by the consumer. Consumers can get saturated with articles, videos, and social media posts focused purely on brand awareness and selling, and I believe that’s why there is an appetite for this.”

Parry Malm, Phrasee:

“Correlating the current economic climate and the acceptance rates of personalised messaging and triggered messaging is like correlating the swimming pool death rate in Alabama with the release dates of Nicholas Cage movies.”

First-party data strategy is maturing rapidly

Tom Carter, Business Director, Technology, Space & Time:

“Many of our growth marketing strategies relate back to efficient use of customer data in optimising campaign activity based on actual outcomes, as well as using demographic profiling to improve messaging and targeting for new and returning audiences. There’s been a fairly recent shift, mostly along with the rapid digital transformation arising during Covid, of treating CRM data activation as an ‘always-on’ strategy, rather than something to be done when a product or strand of activity wasn’t performing. 2023 will see growing demand for automation in the collection of CRM data for use in wider reporting stacks, mainly out of necessity for crucial data to be visualised, surfaced and acted upon rapidly during an economic downturn, but also a growing trend and appetite for platforms to support the data being de-siloed.

“MarTech’s 2022 Replacement Survey, where 23% of respondents replaced a CRM tool in the past year, indicated that the facility for integration and open APIs were the most important factor in choosing a replacement. Closely followed by over half who also mentioned data centralisation capabilities.” 

There’s a lot happening in AI on the creative side – what does it look like on the decisioning side, and which is the most exciting for a marketer?

Alison Lindland, Movable Ink:

“They’re two sides of the same coin. With AI at the wheel, marketers and creative teams can free themselves from the typically laborious and monotonous work of their day-to-day and focus on more strategic initiatives.

“[Our] Da Vinci [personalisation engine], for example, optimises each customer interaction to increase revenue, loyalty, and lifetime value. The approach goes beyond narrow approaches like product recommendations, as the algorithm focuses on discovery… looking down the road to predict what categories a customer will want to engage with in the future.

“As the model learns more about the customer… it maps customer behaviour, product catalogue, and content performance in a three-dimensional geometry to guide customers along their journey.

“For marketers and creative teams, it delivers actionable insights aligned with their brand rules, giving them visibility into what creatives drive the best results for each individual customer.”

What do you see next year from a privacy point of view?

Emma Lacey, SVP EMEA, Zefr:

“In the coming year, we can expect to see a continued surge in the number of marketers harnessing the capabilities of contextual targeting. Contextual has replaced behavioural targeting as the key to the personalisation of ad campaigns, offering a privacy-first alternative, where ads are placed alongside relevant and brand suitable content – a win-win for consumers and advertisers. The next year is likely to bring further development of AI capabilities which allow brands to better understand the context of digital content and the audience it serves.”

The contextual advertising boom: What is it, and how can brands take advantage?

 

Ben Cicchetti, VP, Corporate Marketing, InfoSum: 

“Over the past year, we have seen a massive acceleration in the development and application of privacy-enhancing technology (PETs) across marketing and advertising use cases that until recently relied heavily on risky data sharing practices. In 2023, we will see more companies investing in these technologies as they increasingly understand how to extract the full potential from first-party data and use it to maximise performance and return on ad spend without risking privacy or security.

“Likewise, in 2023 more companies must accept that privacy is no longer a ‘nice to have’;  it is a foundational element of running a customer-centric business, and should be the next pillar in the ESG revolution.

“Data clean room technology will continue to provide the ultimate combination of performance and control as advertisers prioritise partnerships with media companies that can offer direct access to their audience profile, and data partners that can provide crucial audience information, while protecting the consumer.”

Alison Lindland, Movable Ink: 

“A spotlight on data privacy regulations, tech changes, and consumer preferences has caused a cataclysmic shift across the marketing industry.

“Big tech companies, such as Apple and Google have established new privacy protections to address consumer demands for more transparency regarding how their data is used. And this is only the tip of the iceberg….

“These changes will disrupt the way many marketers have operated until now, forcing marketers to pivot to zero- and first-party data sets. Yet, the changes also create new opportunities while giving consumers more control over their online interactions and privacy, especially as new technologies, like AI, gain prominence in marketing strategy.

“In our Audience of One 2022 survey, we found that one in five (20%) consumers say a lack of transparency around how brands use data is a top concern when sharing information about themselves. Misuse of personal information can have dire consequences and may even be a deal-breaker for consumers with 39% saying they would cancel services or not purchase from the company again. 49% ranked data being sold to other parties as a top concern. All of this is to say, the importance of embracing more consent-driven approaches to data capture will be key for brands in the years ahead.”