Things change so quickly in the digital space that it can feel like there is too much to take in. And it’s true. The digital ecosystem available to brands has turned into a veritable Hydra with more heads than anyone can count – let alone keep track of. Back in 2019 (love that we can say that now) I wrote about the biggest challenges facing brands. Some of the ideas put forth continue to be highly relevant in 2020.
E-commerce still remains problematic as an opportunity because of customer expectations and the Amazon effect. Consumers seek out experiences and each brand gets homogenized when they appear on social platforms where everyone is using the same formats. Influencers are a risk for brand image with questionable returns.
But there are new developments, particularly around privacy, that are throwing curveballs to brands and their strategic planning. In some cases it might seem more prudent to take a conservative “let’s see how it goes” approach, but we all know that deep down those who will win the most are those who tackle these issues head on in intelligent ways – they will be on top when we all come out on the other side of 2020.
The first three challenges are based around privacy and customer data. We have entered the period of what I’ve been calling the Privacy Wars. Apple is going on the offensive and Google is running print ads about how to control your data on their platforms. Browsers and platforms are tightening accesses to third parties and California introduced new privacy legislation. To marketers, then, the first challenge is:
Goodbye retargeting: cookies are disappearing
Cookies are an important part of how the web works, both for monetization of content platforms and for driving effective digital media campaigns. Apple’s decision to remove cookies from iOS and Safari has already had a significant impact on reporting and it has greatly reduced the size of potential retargeting audiences. Mozilla has done the same and it’s conceivable that other browsers will follow suit (not Chrome though).
For privacy-conscious consumers who are creeped out by who has their information and wondering what they are doing with it, this is very comforting. Plus it hits Google where it hurts. Google’s business model runs on advertising and analytics and cookies are key to both.
It hits digital marketers hard too. First we had to build in extra services and options to our websites and apps in order to add cookie banners and policies that enabled people to select the cookies they accepted. This was a painful but a necessary evolution – both because we should be more accountable in what we track and because we had to with the GDPR.
Now with some of the tech players blocking cookies entirely, that screws up a lot of things. First we don’t know what a lot of visitors to our site do when they get there. It’s hard to optimize your site when you can’t map customer journeys and the places where your customer journey is broken. The consequences stretch beyond e-commerce too, everything from landing pages to sign up forms are affected, and it means marketers spend more time in the dark or make decisions with less information.
The newest laws are designed to protect consumers from being tracked across the web, but that is exactly what we as digital marketers are trying to do. Retargeting is one of the best things to come out of technological advancement. It allows us to touch people who were visiting our sites or looking at our products already. It makes much more sense than just getting blasted by messaging because you share certain genetalia with one sex or the other.
In fact, retargeting is arguably the realization of the promise of digital advertising: maximizing spend on people who are really in your target. Provide them with a tailored message or discount to get them to come back to complete a purchase. In terms of ROI, nothing is more effective than retargeting (this can be misleading because retargeting budgets often do not take into account the previous waves of traffic generation and awareness).
Without cookies there is no retargeting. Not even the giants like Facebook are spared. If I am using iOS and Safari and I click on an ad to check out a pair of sunglasses but don’t complete a purchase, the sunglasses brand cannot try to reach me again with a 10% discount offer because Apple said no to all 3rd party cookies. I’m going to have to run a different campaign focused on the same audience and see what sticks. It’s like going back in time to the untrackable media like billboards.
The less we know about our digital visitors, the harder it is to give them what they want, and the trend of personalization feeds into the second challenge for brands in 2020, but not how you might think.
Customers want customized – not personalized – experiences
At L2’s digital leadership event in London last year, one of their bright minds talked about a study they did on personalization. The hypothesis was that the current trend of trying to swallow up as much data as possible to provide a truly personalized experience might be wrong in one surprising way: people actually are creeped out by being tracked and having a personalized experience that goes too far. Surprisingly, the chunk of audience that looked negatively upon personalization from a consumer point of view was nearly half!
Personalization has always been more of a goal than a true practice. The belief is that adding more and more data layers provides you with a greater level of segmentation for ever-more granular campaigns. There is no consensus about just how personalized an experience needs to be, but ideally you link socio-demo to purchasing history and affinity to be able to provide the widest possible appeal to your audience both in breadth (types of experiences) and depth (the experiences get better with time).
The good news is that we can finally stop the quest for data lakes. Getting to the final levels of adding more and more information is a waste of time from a marketing perspective. When you rationalize the types of information you need, sometimes it makes sense to focus on only two or even one data point.
From a generic brand standpoint, we all tend to try to all pull in the same information and then end up sending out campaigns about Mother’s Day. But brands have to think about the types of experiences they are able to offer to their customers, and this can take many different forms. Sometimes you only need one real data point to provide an exceptional, customized experience.
Take Pamper’s. Their website was based on providing a guide to mothers and families. They would follow along a child’s development providing tips and information relevant to the age of the child. So the site only asked for one piece of information: the date of birth of the child. As each new visitor adding in this information, each time they came back they got a customized experience. But it was not personalized. It was the same experience that everyone else was getting just adapted to the age of the child. Since children are all pretty much the same when in comes to pissing and shitting, Pamper’s didn’t have to create a thousand guides to parenting, just one.
Sure, Pamper’s could ask for names and propose all other types of services like personalizing diapers for the holidays, but that doesn’t make babies shit more, so just stick to what they know they can provide in a qualitative way.
So the good news is that we need a lot less data than we think to be effective. But – and I cannot stress this enough – as a brand, you cannot rely solely on partners, you need to own your data.
You need first party data
It still amazes me that businesses worry about setting up mechanisms to capture customer data, as if it were some parasitic expense that eats into the bottom line. To be honest, if it’s just an address book that’s not being used in some way, then that’s definitely the case. But as we’ve seen, there is no real need to set up massive amounts of customer data in order to provide extremely personalized experiences, so instead of running an RFP and going with SalesForce, businesses can use much simpler databases and focus on the experience.
In a high-level e-commerce environment where everything runs on SalesForce, then it makes sense, but if you’re already at that stage then you don’t need to be convinced about first party data. For all of the businesses out there that are buying their data (as in not collecting and storing it themselves) or relying on audiences on social networks, the sands of digital platforms are constantly shifting: both technologically and legally.
Combining the creepy-factor of too much personalization with the cookie casualties of the privacy wars and a lot of the Internet’s data is already rendered useless. But this is just the froth on the tip of the wave from a governance and legal standpoint. Europe’s GDPR has spawned copies – most notably California’s new data privacy law that just went into effect – and a lot more countries and states are going to follow. The new strictness of the law will force many companies to rethink their relationship with their customers’ data (a good thing) – but it will severely handicap groups that sell customer data as their business model (also a good thing). The bad thing is that businesses that rely on buying customer data will find themselves in need of new audience strategies. Businesses that didn’t spend time cultivating their first party data could be stranded on the sidelines in the coming years.
The biggest social platforms in the world didn’t even exist 15 years ago. Since then they and the big tech companies have been doing n’importe quoi with our data and customers are catching up. There will be a lot of reckoning in 2020 as people jump from place to place following public opinion and future developments. The only thing that you can rely on is an explicit agreement with your customer when they tell you “I want to hear from you.” Then give them something that they’ll love hearing and own that relationship.
It’s harder than ever to go it alone: collaborations are key
Open up Spotify‘s New Music Friday playlist and you will see single tracks that are a collaboration between four or five artists. And that’s every other song. Scroll through Instagram and see the latest collaboration between a sneaker brand and luxury fashion house. Drool over a photo of a Japanese Peruvian fusion dish on Pinterest. We are living in an era of unprecendented collaboration.
The Internet has unleashed never-before-seen creativity by connecting the dots of humanity in real time. Sharing becomes inspiration which is shared again in a virtuous circle of creation. And artists and creators find audiences because fans seek them out. So much of today in terms of business, language, art, and thinking is a product of this creativity.
All of that is great news for brands, because it is getting harder and harder for brands to carve out their own niches in the digital space. It’s no longer about the lucky ones that had the foresight to jump on a new platform. There are two paths to getting people to know about your brand or business: pay to tell them, or leverage other people’s networks.
I wrote about Other People’s Networks a long time ago. The concept from the last decade still very much applies, but the barrier to entry is even higher. It’s getting harder and harder to gain true earned visibility when everyone is trying to get paid for a recommendation. So, you need to collaborate.
Collaboration can take many forms, not just splashing a logo on someone else’s product. In fact product collaborations are probably the hardest to pull off – though we do see huge groups like P&G and Disney that can go through that hassle. Even bundling multiple products together to sell gets into a logistics and financial nightmare (but certainly something to consider if you can pull it off).
For me the best way to go is finding complementary products and creating joint communications campaigns where content is co-created and visibility is shared. A lot of brands are reluctant to attempt this because of the perceived loss of control that it entails. Others might worry about crossing brand signals. But brands often forget that what Claude Shannon said when he invented information theory: communication is the message received – not necessarily the message that was intended to be sent. Keeping “full control” over your brand image means that you miss out on a lot of creative and exciting opportunities that can turn out to be both qualitatively amazing and quantitatively performant. It also means that people will interpret your brand in a certain way – and the implicit recommendation of association with a brand they know can do more than an off-target message.
I’m not saying that having a strong brand position isn’t important, and that brands should bend to the wind anytime a breeze comes along. The irony is that the stronger the brand, the more they can collaborate successfully. Fortunately, those brands need other brands to collaborate with. Calculated collaboration can take a brand further in 2020 than any other marketing strategy outside of mega advertising budget.
How you do what you do is becoming as important as what you do
We could say that capitalism provided us with the standard of life that most in the West enjoy. Yet the history of business is a dirty one. We used to just be able to sell stuff and people would either buy it or not or like it or not. Businesses and brands would fight to reduce costs while building brand equity and generating profits. The corners they cut affected not just their bottom line but the environment and the working class. For every individual winner, many lost. And somehow, financial wizardry means that I can buy a kiwi from New Zealand for 1€ at the supermarket in Paris.
The convenience and quality of product used to be enough. The plight of what it means to actually produce most of the stuff that we consume was invisible because it was unseeable. Until we gave half the people in the world the Internet and a device to record reality.
The smartphone is arguably the culmination of human intelligence and society. The Internet represents billions of connections between each of us around which pass humanity’s information. Our smartphones enabled the breakthrough in two ways: because they allow this connection wherever we go, and enabled us to contribute to these connections, creating connections of our own. Together, the Internet and smartphones – the synapses and neurons – form a giant societal brain.
And like a brain, it starts to analyze what it knows. Thanks to all of these new imputs, we can see what reality looks like around the world. All of the things that were hidden from sight have become visible. We see the trash floating in the ocean, we see the haze choking cities in northern India. We see the young girl with four fingers cut off from the loom she was using to make our 5€ H&M throw-away t-shirt. The conscientious part of our brain can’t help but object.
The biggest wave that is upending businesses from top to bottom is the visibility demanded in terms of how products are made. Everyone has both a magnifying glass and a megaphone in their hands. Brands and businesses have to move away from creating, or even using, products that come between the crosshairs of public scandal. What used to be a competitive advantage in terms of pricing is now often a liability. The shift has to be rapid – but subtle.
Too much talking about how conscientious your brand is can backfire. For example, take greenwashing. Brands communicate about the good things they do for the environment but almost any critic can punch holes right through that. To promote the green aspect, a company has to really be ahead of competitors and have a product and distribution that is relatively low-impact. Otherwise the greenwashing just calls attention to other, less-green parts of your business.
Pepper in the difficulty that any true progress made is incredibly fragile because businesses have to adapt along a number of different axes. It’s not enough to have a product made in a certain country, or create a bio-degradable packaging, or ethically-source raw materials. Customer service has to be thoughful, the site and/or app have to be clean and easy to use. Employees (who also have magnifying glasses and megaphones in their pockets) have to be fulfilled. Profits have to be reasonable and donations to supporting causes have to be on par.
I’m not exaggerating either. The start of “woke” culture is really an apt term for the awakening of the societal brain. We get more and more specific about what bothers us as we analyze and solve more and more problems. Brands today might be able to get rid of plastic straws and do a fundraiser for seahorses and come out looking like one of the good guys. This is not going to last long.
If you have been putting off the push towards becoming a more conscientious business – you might already be too late. The past few years have gone in a lot of different directions but one thing is clear: people are paying more attention to how companies operate and they are selecting the winners with their wallets. Businesses need concrete roadmaps to walk the delicate balance between improving how they do business, how people hear about it, and still manage to eke out some profit.
In the future, no one will mourn the dinosaurs that destroyed our planet and rained misery upon the working masses just so we could eat a kiwi for 1€. It might not even make sense to future generations that we could sell out the planet and our fellow man to be able to sport a different color shoe every month. I certainly hope so.
As Marxist as I might sound right now, I don’t mean to bite the hand that feeds me. I have the chance to live an unprecedented life of peace (for now), prosperity, and entertainment. I own as many sneakers as any of my readers. But I, like the societal brain, am aware of what this means, and as we discover what the true cost of all of this is, I’m going to be directing my consumption towards responsible brands and businesses. And I’m definitely not alone.