Over at AdForum.com Jacques Van Niekerk, Wunderman Data’s CEO, shares his perspective on why agencies are merging with data companies. Dentsu has acquired Merkle; Interpublic and Acxiom; Publicis and Epsilon, to name a few. As Van Nikerk says, “While analysts fret over whether these moves are good fits or bad, the overarching trend is clear. Marketers no longer see data as a measurement tool but as a central strategic asset, necessary for competing in the modern marketplace.”
But getting to that data can be tough for brands. With more customers spending time on platforms like Facebook, Amazon and Weibo, etc., those platforms end up owning and controlling data that brands only get access to when they pay premiums for advertising. And even then, it’s not all the data. Also, because the platforms own the data, there’s nothing that can stop them from using it to launch new products, even those that compete with yours.
Van Nikerk highlights three trends behind the market consolidation we are seeing today, and why an understanding of them will define the winners and losers of the future.
Trend #1: First-Party Data And Privacy
Data that has not been properly handled or lacks the right permissions is useless. First-party data is at the core of your brand, revealing how and when your customers spend time and money in channels you own. When properly setup and managed, first-party data will go a long way to optimizing the customer experience and even anticipating future needs. The mergers between creative agencies and data firms reveals that there is a need for deeper expertise in this area. It’s amazing how much data many brands are sitting on that goes unused because it is thought too costly to connect it all.
Trend #2: Identity Management
Identity management allows your brand to know who your customers are, their preferences, where and how to reach them, and what kinds of offers they will likely find valuable. The problem is, managing identities across fragmented systems can be a challenge, which explains the trend wherein brands are looking for partners that can help solve this problem. Above all, identity management expands on your limited first party data to allow richer insights to be surfaced to meet customers where they are.
Trend #3: Machine Learning And AI
AI is a buzzword, but machine learning is a more practical subset of AI that holds tremendous potential for marketers, especially when we want to learn things from larger data sets. Thanks to cloud computing, putting this technology to work is within the reach of every marketer. If you target audiences using look-a-like models, you are using AI. Marketo, one of the leading marketing automation platforms, rolled out content AI which uses machine learning to deliver engaging content based on past buyer behavior. It can even predict the ten most interesting pieces of content for a particular audience in real time.
There’s a few examples of brands that are using advanced data techniques to grow their business:
- Target predicted pregnancy when they hired a statistician, Andrew Pole, to analyze shopper data and create a model that could predict which shoppers were likely to be pregnant. This data was later cross-referenced with women who had registered for Target’s gift registry to identify common patterns. But it also exposed a weakness in governance when they started sending coupons to a 16 year old who’s father found out about the unintended pregnancy through the mailings.
- Outdoor clothing retailer North Face partnered with IBM Watson to offer a highly personalized shopping experience. The virtual assistant walks users through a series of questions and learns to offer shoppers the most relevant products based on their needs.
In his 1982 book Megatrends, John Naisbitt wrote, “We are drowning in information but starved for knowledge.” The consolidation trends we are seeing marrying marketing and data show that, at least a few brands have a serious desire to get wiser.
Wiser. The goal for every brand today.
Branding Strategy Insider is a service of The Blake Project: A strategic brand consultancy specializing in Brand Research, Brand Strategy, Brand Licensing and Brand Education