Gilbert Corrales, CEO of Leaf, recently spoke with Forbes on data, marketing, and eCommerce in the current tumultuous landscape.
As markets around the world slip into recession, marketing budgets will inevitably come under scrutiny. When it comes to performance marketing, brands find themselves caught in the middle of the perfect storm, balancing cash flow concerns and supply chain challenges with the need to drive revenue into the business.
Marketing teams, meanwhile, are having to work harder than ever to stay in touch with their customers as Apple increases its iOS privacy settings, Google phases out third-party cookies, and Shopify, which powers 30% of all online commerce in the U.S., introduces an all-encompassing new customer events solution that expands its reach from browser-only to include restrictions on server-side tracking, overriding the more targeted cookie banner consent.
TLDR: It’s tough out there. The challenges we all face are daunting and complex. There’s certainly no simple solution to all of the above. However, I have outlined five tips to help your data marketing strategy thrive in 2024.
Accept that the days of big data are over
For years, marketers have been able to binge on data. A series of moves by regulators, legislators and big tech means we have reached the summit of peak marketing data and we’re heading down the other side. The demise of third-party cookies is going to make that downhill slope even steeper and the descent even faster. We can’t say we haven’t been warned; Google first announced it was phasing out third-party cookies in February 2020. The problem is, that we’ve become so used to having copious amounts of data, that it’s hard to let go.
Fall in love with first- and zero-party data
Some marketing teams will put their hands up and say they hoped the death of the cookie would go away. Others are rushing to implement alternative solutions such as server-side tracking and cookie banners.
But server-side tracking — where a central system function relays data to marketing channels directly from the store’s servers — often haemorrhages data. The challenge is that many people are thinking of it as a long-term solution when it could, in fact, just be a sticking plaster. To make matters worse, some server-side tracking may not even be compliant. But while data-savvy server-side solutions do have their place, your data strategy must make use of first- and — crucially — zero-party data.
Zero-party data, where a customer voluntarily shares personal data with a business, will increase in value as other forms of data dwindle.
It’s important to bear in mind that there is a near-constant move from regulators toward greater privacy. For e-commerce and D2C brands, the risk is a constant game of cat and mouse, where solutions quickly become non-compliant. Any form of medium-term planning should assume that your access to first-party data will be eroded. In short, you need a zero-party data strategy.
A good zero-party data strategy — a mechanism for allowing prospective/existing customers to volunteer data about themselves as an integrated part of the shopping journey — should do three things:
- Offer the customer something of value.
- Provide the brand with valuable customer profiling data.
- Foster the customer-brand relationship.
Don’t just think about an offer — consider the shopping experience. It’s a game of give and take for both the brand and the customer. The shopping journey could include a discount in return for an email address and date of birth, but it could also include a short survey that enables the brand to gather deeper profiling information about the customer while providing a personalized product recommendation experience that enriches the customer’s shopping experience. Any opportunity the brand has to get to know the customer better is an endeavour worth pursuing.
Get creative
Having so much data to play with means that brands haven’t always had to think too hard about online advertising creative. This is all set to change. Having less data to optimize creatives and campaigns means brands will have to work much harder at creative advertising online.
Targeting on social media has already gone broad and Google is set to follow suit with the advent of topics. More effort is having to go into creative concept building and web UX/UI, using first-party customer data to inform design.
Efficiency is key
With marketing budgets under scrutiny, agencies and in-house teams need to ensure they are maximizing campaign efficiency — and talking about it to those who hold the purse strings.
Before requesting or spending additional budgets, ask yourself if you have implemented every possible efficiency. Start by investing in campaign optimizations (structure, creative or targeting) and improvements in web conversion rates. These can deliver better long-term marketing spend efficiencies and increased top-line revenue than simply increasing spend on prospecting campaigns. Perhaps more importantly, in the current economic climate, your finance team will thank you.
Learn and learn again
The key to driving efficiency is auditing. Audit everything — your tracking, analytics and historical data. We recently audited 24 months of promotions for one of our clients. We lined up the type of promotion alongside ad spend, conversion rate, revenue and profit to help determine the right set of promotions for Q3 and Q4. A tiny difference in percentage discount or the mechanic for redeeming the offer can make an enormous difference at scale. This audit completely changed our approach to promotional strategy and helped unlock additional performance gains for Q3 while setting up a strong Q4.
As brands accept they have to make do with less customer data, a point will come where many will decide to stop rearranging deckchairs on the Titanic and abandon ship. For some brands, the answer will lie in a combination of server-side solutions and a deeper relationship with individual customers. Looking slightly longer term, expect to see the likes of Instagram, Facebook and Google shift toward becoming native e-commerce platforms alongside larger retailers. Keeping the transaction on-platform means they will own the customer and, therefore, their data.
It’s time for brands to consider what these changes mean for them and what their D2C and/or e-commerce strategy looks like going into 2024 and beyond.