Data geeks view COVID-tsunami marketing changes
Digital advertising stumbled in 2020, the year of the flu demons, but analysts are optimistic about the future because of consumers’ unparalleled e-commerce adoption during lockdowns.
In a webinar on the future of digital advertising hosted by Dstillery, a New York City data science firm specializing in advertising and marketing, participants explored how digital marketing is changing and why companies must reassess digital strategies in the massive consumer shift to e-commerce.
A GroupM study projects that by 2024 retail-focused e-commerce will hit $7 trillion annually representing 25% of all retail sales. By 2027, retail e-commerce sales will hit $10 trillion.
Brian Weiser, global business intelligence president at GroupM, a global media agency managing $63 billion in annual media spend, said 2020 was bad for companies and agencies but it could have been worse. Many companies adapted quickly to lessen the economic blows caused by changing consumer behaviors, even brands that usually haven’t depended on online transactions began selling online.
Because companies are being forced online and must have e-commerce capabilities to serve customers, panelists expect more digital-advertising spend.
“Brands are being forced to do the things they’ve been talking about for years,” Dstillery CEO Michael Beebe said. “They didn’t have a choice in 2020.”
Beebe said brands also have been driven to improve focusing their advertising and marketing dollars for effect. He said even brands beholden to retail for distribution developed consumer-direct strategies as online shopping increased retail-sales share.
“I think this trend will continue and intensify as lingering effects of COVID-19 continue into 2021,” he said, believing the shift will gain further traction.
Google-cookie loss benign
Looking at the loss of Google’s third-party cookies and data by 2022, the panelists generally don’t see a major impact on marketing and re-marketing.
Weiser said marketers will make use of the best data alternatives available, suggesting marketing budgets won’t change much but the channels they use will – possibly forcing major changes in winners and losers in the advertising game. He cautioned brands that if they don’t have “first-party data,” data that brands collect directly from their customers and potential customers, they will be at a disadvantage when trying to focus marketing and campaigns.
Every marketer will find different signals that matter to them, Weiser said about the loss of third-party cookie data, suggesting companies should invest heavily in their brand and market-driven strategies. Marketers should establish what they want to accomplish and what they will measure at the front end of the process and measure specific results at the back end. They should build feedback loops and testing through their data efforts to see if marketing is working.
The panelists emphasized that first-party data will be even more essential to marketers and advertisers.
“You have to make it easier for consumers to share their data, and if you can’t persuade them to do that you probably don’t deserve it,” Weiser said. He encouraged marketers to do things that help consumers share their data, such as building trust, exchanging something of value for data, and looking at other ways to earn the data you need.
Beebe agreed saying brands should consolidate around core customers (“the walled garden”) and spend more money there.
Melinda Han Williams, a Dstillery data scientist, said the loss of third-party cookies will mean a broader world of opt-in for data and a move toward increased use of artificial intelligence to manage data, both the data that marketers have and the unstructured data that AI considers when making predictions and forecasts.
Not more but better data
Having millions of points of data may mean increased use of AI applications to see what data to focus on, Weiser said, but cautioned marketers they don’t need more data, they need better data.
He alluded to government hearings on Facebook that said it didn’t know Russians were buying ads in the 2016 election runup. “Facebook has millions of data points, but they couldn’t recognize that rubles were being used to buy ads and data?” Weiser chuckled. “The issue is they were not looking for that data.”
He said marketers can process more data if that’s what they need, but data shouldn’t be processed for its own sake. Data could be lower fidelity information but have far more powerful impact because it’s related to the brand and its marketing strategy, such as SKU, category, and customer data.
Quality of data is more important, Beebe agreed. However, the beauty of AI is marketers don’t always know what they’re looking for. AI can cluster data to make patterns and possibilities easier to find.
More AI analysis
With less deterministic, event-level, observable data, AI will be more important in the marketing funnel to make predictions about consumer behavior, trends, products, and other consumer insights, Beebe said.
Weiser cautioned that marketers should start with the human intelligence piece, that is, what is your human goal, what do you need to measure and what results do you want to see when you do something.
Williams agreed, saying marketers should ask what they want of the data before they turn the data machine on.
Marketing will be more about testing and monitoring what is happening with campaigns, Weiser said. Marketing data also will be more about looking at a broader range of factors, such as the supply chain and procurement integrated with marketing initiatives.
He mildly chided marketers and advertisers because the industry is often driven by what people say or hear, not necessarily what is true. He would like to see more science in marketing and more testing of hypotheses rather than blind reliance on traditional marketing beliefs, such as frequency and reach contributions to actual sales results.
Williams said devoting money to research and development would deliver improved outcomes in marketing and advertising but said brands don’t want to spend money on testing, depending more on the creative.
Panelists agreed that media publishers will be revitalized in the new data world because they have so much first-party data and should be able to leverage their customer data to create greater value for marketers.
Beebe sees a more fragmented, uncertain environment for marketers and advertisers which could spark a renaissance in service and agency businesses. Big brands will be more apt to use service agencies who focus on specific audience targets and specialized media tools.