Change Is on the Horizon
Marketing as we know it is in the midst of massive change. Legislation like the General Data Protection Regulation in Europe and California Consumer Privacy Act have put consumer privacy directly into the general conversation. But there’s a bigger change looming on the horizon — the so-called death of the third-party cookie. And marketers are worried. Recent research found that 69% of marketers believe the end of the third-party cookie will be a bigger deal than privacy legislation. And 96% of marketers say first-party data will be vital for moving forward — and we agree!
We recently conducted a research study to find out how professionals view these changes and how they currently gather and use data. In today’s blog, we’ll talk about what these changes mean for marketers, the future of targeted ads, and how to kick-start the process of making your consumer relationship management (CRM) work for you.
Changing Times, Changing Targeted Ads
As access to third-party data continues to change, marketing will have to change with it. Learning about consumers, targeted ads, and measuring performance will be much more difficult without the third-party cookie. So let’s look at how marketing’s role will change.
Identifying prospects: You’ll no longer be able to identify prospects by devices or user profiles. Instead, you’ll need to identify individuals and gather information about them with explicit consent and through first-party data.
Engaging prospects: When a prospect visits a website and clicks on a product, third-party cookies will no longer be able to track that prospect to another website and show an ad for that product or a related one. As a result, you will need to gather your own data from your website, customer surveys, and email lists, which you can then use to plan ad campaigns.
Closing sales: Recent research shows that 80% of consumers are more likely to buy from a brand that offers a personalized experience. Third-party cookies have limitations with customer insights. Close sales by using first-party data to understand your customers on a deeper level.
Cost per ad: Some marketing experts predict that the return on investment (ROI) from ad spend will drop 30% once third-party cookies go away.
All this amounts to a lot of pressure on business marketers to get it right.
Different Organizations, Different Ways to Measuring Success
Our research found that organizations measure marketing success in various ways.
- 56% of marketers are evaluated by their marketing activities’ ROI
- 45% by the cost per acquisition
- 45% by the conversion rate of leads
- 35% by the conversion rate of activities
Today, the success of paid media depends on the third-party cookie. As we mentioned in our previous blog, tracking click-to-purchase rates through third-party cookie-targeted ads will no longer be possible. As a result, marketers need to rethink KPIs — specifically, how they measure them.
Instead of tracking conversions from retargeting ads, marketers can ensure they’re using Google Analytics to track their website data and train staff to monitor, analyze, and make recommendations based on those results.
Soon, acquiring customers through Facebook targeted ads will be a thing of the past. Marketers need to adjust their customer acquisition funnels and be change leaders in their organizations to stay agile. It all starts with upgrading your data stack. The steps to measure customer acquisition will also change. Consider nurturing customers through engaging content like organic social posts or blogs.
How to Use Your CRM (and Use it Well)
There are many options for managing first-party data, including Excel spreadsheets, database software, and dedicated CRM software. Our research shows that many marketers use all of the above methods, but CRMs lead the way with 68% of respondents saying that’s what their organizations use. Additionally, 72% say they use a CRM often to do their jobs. However, many respondents say their CRM isn’t as effective as it could be. Check out these insights:
- 50% say data input takes too much time and effort
- 42% need more training to get the most out of their CRM
- 33% would get more out of their CRM if they had on-staff experts
Although it seems daunting, investing the time and training into these areas is worth the payoff. If you are starting out with little to no data, spend the time mapping out a plan. Ask yourself questions like: What data do you want? How is it going to be formatted? Where is it going to be stored? What other departments need it?
If you have a good amount of data, start off with an audit to see what you have, where it’s being used, and where it’s being stored. Then make a plan on how your company should use that data and the changes that need to be made to get there.
The takeaway here is that your CRM needs to do the heavy lifting for your organization. It should pull data from all departments, not just sales and marketing. Human resources, operations, finance, IT, and additional departments also have a stake in the game.
How Attitudinal Segments Collect Data
After conducting the research, three distinct attitudinal segments emerged: Independent, Data-Reliant and Concerned respondents.
Independent respondents aren’t too worried about new policy legislation because their organization doesn’t use much third-party data. They already have systems to gather first-party data — like a CRM — and know how to use it.
Data-Reliant respondents believe data is the key to effective marketing and helps marketers weather change and take advantage of opportunities. Despite thinking it’s perfectly ethical to use third-party data, this group worries about their organization’s chance of success if it goes away.
Concerned respondents think it’s risky to use third-party data and believe the best prospect lists are developed in-house. They’re also concerned about the privacy of their data.
Both Data-Reliant and Concerned respondents are more likely than Independent marketers to purchase data from other companies about their customers. Data-Reliant are more likely than Concerned marketers to say their organizations collect basic information about their customers.
You can collect a lot of customer data, including call notes, in-person visits to brick-and-mortar locations, and social media engagement. Unfortunately, less than half of respondents say their organizations collect any of the above data. 68% say their organizations collect basic customer information like names and emails. Although this will only get you so far, all marketers need to increase their data collection in order to succeed in the future. And they need to know how to use it.
Most of our respondents use data to identify customers for sales and marketing purposes. Those tasks will be more successful if they have high quality, relevant data.
Data will go bad and will be entered incorrectly. Human error is real. First-party data is reliant on human interaction at some point. Since you can’t monitor everything, set aside time to go through your data. Consider investing in services like Melissa.com or Kickbox to help verify customer data and keep it current.
Encourage your entire organization to think about what customer data would be valuable to them, and start gathering it. Consider the following buckets:
- Identifying information: name, email address, mailing address
- Demographic information: education level, gender, marital status, home ownership status
- Quantitative data: purchase history, website visits, social media engagement
- Qualitative data: information gathered from surveys or interviews, such as customer satisfaction, customer feedback and reasons for purchasing
Lead With First-Party Data
Even though third-party cookies will be on Google Chrome until 2024, start preparing for the change now by putting a better data management process together.
Start by making sure that all data is filled out correctly and in the right format. Bad data can be just as bad as having no data. For example, if you send an email to a user and personalize it with the wrong name, it’s less likely to be opened or it can be deleted altogether. This can cause you to miss the sale and even the customer. Next, connect as many of your systems together as you can, and audit and verify your data at least twice a year.
By using a company-wide CRM or implementing a customer data platform (CDP) that fits your industry, you can break those silos and start working together. This takes all data in, matches it with the appropriate user and then sends it to the different platforms. CDPs are also bidirectional, so if something changes in one place, it will change everywhere else.