Commentary by 4Cite CEO Bob Gaito
Direct marketing has come a long way since physical mail addressed to “Resident” was state of the art. But while marketers have achieved an increasingly high level of sophistication, the problem of identity remains.
For today’s retailers, success in the marketplace increasingly depends on the ability to personalize interactions. This in turn depends on the ability to recognize individual audience members (including customers, prospects, and other visitors) across channels and devices. In other words, the ability to identify consumers each time they interact with your brand is key, whether they provide any identifying information or not.
Too often, marketers lack the tools, data, and expertise needed to establish identity. This is further complicated by U.S. consumers using an average 3.5 devices, plus a growing array of smart home appliances and entertainment gear, to do their shopping. According to the Association of National Advertisers Data, Marketing, and Analytics division (DMA), only 15.3% of marketing organizations say they can confidently identify their audience members across channels. A whopping 68.8% think they’re only partly successful at identity in general. No wonder the DMA reports that marketers find it difficult to explain the value of their identity-based initiatives—the initiatives themselves seem far from successful.
It’s all about identity
Not surprisingly, the DMA expects U.S. marketers to spend $900 million in 2019 on identity solutions, growing to more than $2.6 billion in 2022. Regardless of identity spending, many marketers are still unaware that effective personalization cannot reliably happen without a persistent, cross-device, universal identifier for each audience member.
The “walled gardens” like Amazon have built-in universal IDs because users log-in, but most retailers don’t have that luxury. Fortunately, the email address can make an ideal universal ID, and with the right technology, can be linked to otherwise anonymous shoppers each time they visit your website. To ensure consumer privacy, this can all be done using a “hashed” email identifier.
The email identifier unlocks a treasure trove of data as online interactions are captured, as well as through linkages to additional identifiers with associated data—such as other email addresses, physical addresses, mobile phone numbers, device IDs, customer IDs, and loyalty numbers. The more data that can be collected and stored in relation to the universal ID, the more each interaction can be tailored to the consumer’s unique interests, preferences, and tendencies.
Don’t pollute your identity graph
When it comes to establishing identity, it’s essential to understand the difference between using third-party data for identity versus content purposes. Third-party data is often probabilistic and aggregated from a variety of sources that may not use proper data capture and management procedures, so its accuracy is questionable. For situations where there is little cost or consequence if personalized content is not ideal, it can be a good resource. By contrast, polluting your identity graph with incorrect information can result in cross-channel messaging inaccuracies that multiply over time. As they say, you can’t unscramble the egg.
When determining identity, only first-party data should be used—that is, data collected through interactions between the retailer and consumer. To expand identification capabilities without the polluting effects of third-party data, consider using a network where participants agree to share quality-controlled, first-party identification data (sometimes called a Verified Identification Network).
Using first-party data also makes it easier to address expanding privacy regulations. Third-party data that’s collected from multiple sources and handed over multiple times makes it nearly impossible to ensure that privacy standards are adhered to.
Be careful what you give away
According to the DMA, the biggest challenge for retailers is their inability to extract audience data from walled gardens like Facebook, Google, and Amazon. These platforms add a layer between the retailer and consumer, collecting the retailer’s first-party data and then restricting access to it.
This makes it difficult to build a comprehensive view of consumers across touchpoints, not to mention that the walled gardens use this valuable data to enrich themselves.
Retailers need to better understand the worth of their own data, and to ensure they have the technology in place to collect and leverage it themselves. They also need to think about how, and how much, they should use the walled gardens—because it might be wiser to keep control of their own first-party data as much as possible.
“Resident” done right
Identification is the key to relevant, timely, and cohesive cross-channel marketing that increases sales and builds brand loyalty. Do it right, and you’ll achieve the kind of truly personalized marketing of which our predecessors could only dream.
Bob Gaito is CEO of 4Cite, the first and only full-service People-Based Identification and Insights provider with a proprietary Data Network that maximizes the identification of previously unidentifiable customers, enabling retailers to more effectively acquire, retain and reactivate customers to influence purchasing decisions, drive brand loyalty and increase revenues. For more information, visit www.4cite.com.
Photo above by Ryoji Iwata