Should there be tension between Data, Privacy, and Innovation? - Part 1

in the end, it is important to remember that we cannot become what we need to be by remaining what we are - Max de Pree, in Leadership, is an art

Some fascinating perspectives are now front and center on the shift to digital and the opportunities and challenges associate with this transition, especially for incumbent companies working on finding answers to "win in the digital age." The perspective shared on:

• Companies move from mission to purpose and differentiate themselves whether, on sustainability, race in the workspace, climate changes, privacy, automation, and AI, to name a few.
• The consumer and how marketing is evolving to understand and meet (new) wants and needs
• Companies leveling-up their assessments, priorities, choices, and response on how to capture and sustain digital growth strategy potential promise
• How to balance the expected short-term and long-term return of capital in pursuit of the transformation(s)
• The data, specifically transitioning from collecting into a connecting data economy.

It's fascinating, complex, and demanding creativity and a tremendous problem-solving mindset in enabling and capitalizing on these potential next cycles of companies' growth.

Let me start with the end, the data, as my experience is mainly in sales, marketing, and data domains. Before going there, I'm assuming the following to exchange and grow our combined perspective.

a.We are Marketers doing marketing online, and the 4Ps are still very important and relevant.

b. Any expenditure is an investment; we should explain it, measure it, compare it to baseline and be able to report and provide insights on the incremental.

c.People we address are maximizers, i.e., they don't care (yet) about our interest or profit; they need and seek services to satisfy these needs with respect to their budget allocation; loyalty is secondary to satisfaction and experience.

d.When we advertise, we expect to get a response from it, by receiving a call, and inquiry, by wanting a prospect to go to our website or use our app, we know the job-to-done from that could indicate her/his interest in what we offer, and we can collect and measure these effects.

e.Advertising is all about salesmanship; a good salesperson expects a return on the work he does in the proportion of objectives and investments.

f.Marketing is a triangle (strategy, science (engineering), and execution); we cannot afford to be weak on these angles (we don't know who could be our next competitors, and customers are just one click away from...well... the others)!

g. Money invested (spending) is a serious business!

h. Privacy and business or innovation are not trade-offs. They are complementary if we're smart 😉

Focus on issues to which we can meaningfully respond

Staying on top of things today requires going the extra mile, especially in dealing with more and more technological and societal shifts that may or may not impact your business or your domain of responsibility.

How to take and to make the right decision and the one you can meaningfully respond to is a factor of the volatility of the direct drivers impacting your domain(s) and your ability to manage them whether by improving the core, extending the core, or (re)inventing the core proposition, assuming you have the case, the alignment, the mandate, and capital to execute

One thing is certain, to plan, do, check, and act; data is not an option anymore.

I'm not going to talk about the usual amount of data collected, which we are good at, especially since the emergence of 'big-data' technologies, analyzing them for operational or customer insights, but more about the connecting side.

Today to innovate, we need to think more inside-out vs. outside-in with and keep entrusted customers' data safe and with the proper consents.

In my next post, I'll talk about that, but let me share some fascinating trends with you first.

•  The global population increased each year by 1% and stood (in 2020) at 7.83 Bn.
• Mobile has become the most crucial channel; 66.6% of the total population uses it today.
• Internet penetration now stands at 59.5%
• Social media users account for more than 53% of the total population.
•  International Data Corporation predicts $274 Bn revenue generated through data initiatives by 2022.
• But according to Forrester, 73% of data never get used or analyzed (less portability, hence liquidity in the ecosystem)

The Intersection of E-commerce and Online advertising

• Businesses have now the opportunity to use personalized messages to communicate everything from marketing, transactions, and customer service -across the entire customer lifecycle
• 5G will materialize, it is expected that consumer is likely to adopt it quickly as a significant driver of the demand, are data-heavy entertainment services that require faster speeds and better coverage
• Google and Facebook dominate the online advertising ecosystem for more than a decade, accounting for over 70% of all online ad spend in the U.S. and nearly all of the growth
• Amazon has emerged as a new disruptive entrant into the digital ad ecosystem, growing advertising revenue to over$14B in 2019, up from ~$4.5B in 2017
• Many other retailers, including Wal-Mart, Target, Kroger, etc. are developing advertising strategies given they also have proprietary first-party customer/purchase data and brand relationships
• In response, both Google and Facebook are innovating their platforms to create a more seamless shopping experience for consumers and drive more value for their eCommerce advertisers
• There is a massive opportunity for these platforms and retailers to capture hundreds of billions of trade promotion spending that has been traditionally budgeted for in-store

Journey Orchestration and Experience in a non-physical world

What's clear is that shoppers want a consistent experience across all channels, and they want to be treated as a unique individual customer, not just any customer.

o  21 is the average number of touchpoints before a consumer makes a purchase

o  73% of consumers say they are more likely to buy from companies that personalize their shopping experience

o  84% of retailers worldwide noted that creating a consistent customer experience across channels is important to them

o  50% of customers surveyed said they turned to a competitor after a bad customer experience

Identity and Ecosystem-led software players on the rise

• Significant opportunity remains for technology to seamlessly identify customers across channels, identify their intent, customize marketing messages, and deliver a unique customer experience for them that results in a purchase and loyalty

• Many players will emerge to try to address breaking down silos on the path to purchase and building a credible journey orchestration and personalization platform for omnichannel
• Marketers are dealing with a problem: never have customer expectations been so high, yet loyalty so fleeting (70% of loyalty is up for grabs, and 77% of consumers now retract loyalty, faster than three years ago)
• Massive amounts of data are created by all customer touchpoints requiring advanced technology to understand the customers' intent

Embracing the tension between Data Power and Privacy

At the same time, companies must do so in a data-compliant way with better use of 1st and 3rd party data

• 84% of consumers have declined to do business with companies that required too much personal information

• The growing importance of data ethics, access, and security (GDPR and CCPA) requires more scrutiny for how "data machines" procure data.
• Data privacy has emerged as a key strategic differentiator for brands to establish trust with customers.

o  69% of data users report their organizations are taking steps to build and implement strategies to govern their use of audience data

o  94% of marketing executives agree data privacy is vital

• Business performance after GDPR took effect found that GDPR-compliant organizations had outperformed non-compliant companies by an average of 20%
• Privacy regulations have thus far had a limited direct impact on data investments, as the increased scrutiny on consumer data has driven a wave of demand and investment in technology and infrastructure to provide data security, governance, and transparent utilization
• 90% of consumers feel that companies must be more proactive about data protection, requiring marketers to be more forward-leaning on cybersecurity and collaborating with IT Teams to ensure the proper steps are being taken

The tension between the requirement of hyper-personalized solutions and data privacy is creating opportunities for security, compliance, and privacy-minded vendors

sources:

• Baird Investment Banking: Marketing, Tech, services sector, eMarketer and SimiCart, MO Capital Markets Media & Internet reports, Business Insider, Forbes, Forrester.
• Scientific Advertising: Claude Hopkins
• Bulletproof Problem-Solving: Charles Conn, Robert McLean
• The Strategist: Cynthia A.Montgomery