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4 Common Beliefs About the Future of Advertising – And Why They’re Wrong

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Martin Kihn is senior vice president, strategy, for Marketing Cloud. In a former life, he was a research vice president at Gartner and he has advised numerous Fortune 500 clients on marketing strategy. This post is part of our Moment Makers series, which dives into how marketers use technology to build data-driven customer experiences that feel natural, relevant, and right on time. 

Imagine you walked up to your best friend one day and said, “Hi, it’s great to meet you! What’s your name?”

That scenario was posed to me recently by Josh Blacksmith, senior director of global consumer relationships and engagement for Salesforce customer Kimberly-Clark.

“Unfortunately,” he said, “this tends to be how many brands communicate with their consumers every day.”

Kimberly-Clark owns brands such as Huggies, Cottonelle, and Kleenex. As a consumer products company, it didn’t collect first-party data – that is, data that its customers provided directly. Instead, it leaned on large retailers, broad-reach ads such as television commercials, and offline media to reach customers.

But as advertising rapidly digitizes and offline media becomes less effective, Kimberly-Clark wants more direct relationships with customers.

“It’s almost like now, without having an email address and owning the relationship, you can’t actually do the brand marketing you’ve started to build all the muscle around over the last decade,” said Blacksmith. And if they believed in some of the common misconceptions below, companies like Kimberly-Clark could be pessimistic about trying new strategies.

In the very near future, even consumer product companies will need to build meaningful connections with customers to do effective marketing and advertising. Building trusted one-to-one ties to customers yields better targeting, measurement, and outcomes.

That said, it’s easy to feel down on digital advertising right now. A Duke University CMO survey fielded the summer of 2019 revealed some startling results: 

  • Twenty-four percent of marketers think marketing job losses are permanent, and budgets that were expected to increase 7.6% in February grew only 1.6%. 
  • Third-party cookies are fading. 
  • A lofty 73% of customers expect companies to understand their needs and expectations, as Amazon does. 
  • Despite that consumer expectation, they’re also more wary of sharing personal data.

Humans have a built-in bias for negativity. But during a recent all-hands call, Salesforce co-founder and chief executive officer Marc Benioff reminded us of an encouraging quote from Albert Einstein: “In the middle of difficulty lies opportunity.”

We agree with Albert. Here are four widely heard negative beliefs about digital advertising – and good reasons to reject the hype.

1.  Myth: Losing third-party cookies and data will be a hardship to advertisers and publishers

Third-party data – which is acquired from others, often at a cost – has been a mainstay of ad targeting for decades. In the digital space, any advertiser was free to purchase segments of (anonymous) users who were, say, “in market” for a car. This type of data is less common due to browser changes and regulatory regimes such as General Data Protection Regulation (GDPR) in Europe and the California Consumer Protection Act (CCPA) in the U.S..

However, neither cookies nor third-party data were perfect solutions. Third-party data doesn’t always provide a real advantage. As Brad Feinberg, North American vice president of media and consumer engagement at MolsonCoors, told me, “By relying entirely on third-party data, we know we are chasing information sources everybody else is using.”

The growing importance of first-party data collection has been recognized for years. It’s the talk of the town, at least in marketing-tech land. And the good news is that there are now a wide range of tools to help marketers collect, ingest, organize, and segment this information. That’s the role of Salesforce Customer 360 Audiences, which launches this month.

Marketers can use Customer 360 Audiences to resolve disconnected data, incomplete identities, and scattered segmentation efforts. Integrated tools such as Salesforce’s Datorama provide additional ways to integrate, visualize, and optimize customer and campaign data to improve the impact of marketing. The result: less “analysis paralysis” and more analysis awesomeness.

2.  Myth: Consumers are losing trust in institutions and brands, and they won’t share their data

Overall trust in institutions was declining before the pandemic (though it’s rebounded a bit this year). Skepticism affects attitudes toward brands and companies. An alarming 81% of respondents to a Pew Research survey confessed they felt they had almost “no control” over companies collecting their data.

But a lot of this so-called reluctance to share says more about companies than consumers. In fact, people will share data with brands if it’s collected in a transparent manner in exchange for real value. A number of academic studies have found (no surprise) that we are a lot more comfortable with open data sharing than we are with unacknowledged collection. And our own research shows that 58% of customers are comfortable with their data being used transparently.One company who’s had great success gathering customer data is Casey’s General Stores, a chain of convenience stores in the Midwest and South. They offer a free pizza for a sign-up to its Casey’s Rewards program, and redemptions in cash, fuel, or donations to a local school. The tactic here is a no-brainer: be open, communicate the benefit, and give your customers something in exchange.

3.  Myth: Advertising is controlled by a few large proprietary ecosystems that have all the data

It’s no secret that a few large platforms command a larger share of digital ad spend and access to a tremendous amount of data about their logged-in users. This data can be used for ad targeting and measurement, and it can be very effective.

But the shift to reliance on first-party data is creating a large number of “mini-gardens,” or proprietary data ecosystems. Some large publishers, brands, and platforms are creating their own logged-in user base that can – with appropriate consent – be available to advertisers. For example, the New York Times announced earlier this year it would offer 45 first-party segments for ad targeting available only on their properties.

As Blacksmith told me, “Essentially any platform we’re advertising on today is setting itself up as its own walled garden. It’s not just about the Facebooks and Googles of the world. It’s also about our retail partners.”

4.  Myth: Artificial Intelligence (AI) is turning targeting and measurement into a bunch of “black boxes” no one can understand

Few areas of the marketing discipline inspire as much excitement and angst as AI and machine learning. Most of our customers feel they’re behind in their efforts, but my experience is that their gaps are smaller than they think. Our research found that 84% of marketers used some AI, up markedly from 29% in 2018. Top use cases were personalization, segmentation, lookalike modeling, and next-best-action recommendations.

Many AI features will be embedded within existing products, prebuilt and ready to use, like Salesforce’s Einstein for Marketing. And an increasing number of no code/low-code tools for data exploration and modeling will open the field up to so-called “citizen data scientists,” expanding its adoption.

Without a doubt, the future of digital advertising may be opaque, but I can’t help but think the future is bright. As another great thinker, singer Pharrell Williams, said not long ago, “Clap along if you feel like happiness is the truth!”

Marketing Cloud offers solutions for digital marketing, email marketing, social media marketing, customer journey mapping, marketing analytics, marketing automation, and B2B marketing to help you personalize customer communications across every digital touchpoint — from anywhere.

In a former life, he was a research vice president at Gartner, where he wrote and spoke widely about marketing technology, and he has advised numerous Fortune 500 clients on marketing strategy. He’s also authored four books, including “House of Lies,” which was adapted for TV by Showtime, and the upcoming “Customer Data Platforms: Use People Data to Transform Marketing Engagement,” cowritten with Chris O'Hara and arriving in November. Fun fact: Kihn was head writer for the MTV series Pop-Up Video from 1997-1999.

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