Poor personalisation forecast could prove wide of the mark
Friday, January 17, 2020
If Gartner is to be believed, 80% of marketers are set to abandon the use of personalisation over the next five years.
The research and advisory company made the prediction as part of an analysis by Gartner for Marketers, which provides information on marketing trends and strategies to business leaders.
“This is a prediction, and the nature of that is to observe two key trends: one being the extremely difficult challenge of proving ROI for certain use cases,” says Benjamin Bloom, senior director analyst at Gartner’s Marketing Technology and Emerging Trends domain.
“The other component is that we see substantial headwinds, both in the US and globally, in the interest of consumers to participate in marketing strategies that require them to volunteer their data.
“The challenge of managing that data is likely to pose increased cost to the business, and the combination of these two factors suggest that many of these initiatives won’t be profitable.”
Bloom notes that respondents’ use of print was not specifically addressed in the research. And while digital personalisation may face greater challenges than print, the findings are nevertheless “staggering” to Andy Wood, chairman of Go Inspire Insight, which handles numerous personalised cross-media campaigns.
“Everything we do with personalisation produces much stronger incremental revenue and profitability,” he says.
“Direct mail tends to work 10 times better than email, but we see performance uplift regardless of channel. Simpler personalisation – things like ‘dear Andy’ – will add something like a 5% uplift. That’s assuming you’re personalising something in the letter text in a very basic way, or simple offers that have a bit more variation depending on age or gender.
“With medium-level personalisation, where you start to get a bit more variation in any letter text, you’ll typically start to get 10% to 50% uplift on the base performance.
“And with high-level personalisation, which is where you’re not just starting to create different letters, but where the images are also very specific to the recipient, you’re getting anywhere between 50% and 300% uplift.”
Wood acknowledges that digital personalisation “is a bit trickier” and says many marketers using this channel need to show more constraint.
“Because it’s free, they contact everyone with a pulse every minute of the day and that’s when you think, does it make a difference?”
He adds that many digital marketers have also become dependent on marketing automation software.
“We’ve seen a couple of clients go down the route of believing that when they buy this software, they don’t need the analysts.
“The problem with this is that if you’ve got the skills, you don’t need the software, and if you need the software because you haven’t got the skills, it’s dangerous.
“Data is the new oil – no matter what you do, you need to do analysis. You’ve got to be smarter and you’ve got to be more effective, and for that you need data analysis.”
Carey Trevill, co-founder and director of marketing consultancy Mission Element, says there has been a lot of short-term damage done from a digital perspective “when marketers have probably chucked all of their eggs into one basket” and that many marketers are currently trying to work out what methods are most effective.
“I’ve found that most marketers are rediscovering print and the joy of things like direct mail and its responsiveness in their overall integrated mix,” she says, adding that some of the digital channels are perhaps not currently being used in the right way for personalised marketing “or when they are being measured, they’re not being looked at in the right way”.
She says that consumers still expect personalised communications, but that they also “expect to be treated well”.
“We expect personalisation when it’s appropriate, but done badly it should absolutely disappear. I want brands to show me they understand me and not just follow me around the internet with things I don’t really want.”
She adds: “I think what we’ll see is probably a reduction in personalisation that has no consequence. Where people are starting to be a bit smarter about how they’re measuring, they are maybe looking at the ways that they’re approaching some of those consumers, in what context and in what environment.”
Personalisation is also growing in other areas of print, particularly the personalised gift market, which is now said to be worth around £24bn, up 55% from 2016.
One company to take full advantage of this boom is Wakefield, Yorkshire-based Charlesworth Press, which successfully completed its Company Voluntary Arrangement (CVA) last year and attributes its turnaround to the personalised children’s books market.
“There’s two aspects of personalisation, one being the type that comes through your door with the gimmick of your name which is taken from a database, and I think that that will reduce,” says Charlesworth managing director Mark Gray.
“But one thing I don’t think will reduce is something that is made specifically for somebody. I think personalisation in the gift market will grow and grow.
“The personalisation that we do has got a lot of legs to grow because there’s different ways to go with it. People are getting more inventive with the avatars inside the book and there’s also the opportunity for you to create a bespoke book for your child, or your child and their parent, their pet, or their friend.”
Despite Gartner’s predicted challenges to personalised marketing, digital personalisation still holds a lot of potential, particularly when employed the right way, or when used effectively as part of a cross-media campaign.
A major decline for printed personalisation, meanwhile, seems unlikely to happen any time soon.
70% of nearly 250 respondents to a recent Printweek poll that asked, ‘Do you think marketers will move away from personalisation?’, replied ‘No, the opposite’, which tallies with the continued growth projections reported for many of the industry areas that have already enjoyed success with personalised print.
Personalisation could be print’s best-kept secret
Tim Bond, head of Insight, DMA
Personalisation continues to play a key role in the way organisations communicate with customers. And despite the recent claims from Gartner, I would warn marketers not to overlook the power of personalised experiences, even if new data laws make this more challenging than previously.
In fact, research we’ve conducted over the past five years has pointed out how the promise of better personalisation can, in fact, encourage greater consumer engagement.
Our Data Privacy: What the consumer really thinks report shows that the number of people who claim they would be more likely to exchange their personal information in return for personalised products or services has risen from 26% in 2015 to 34% in 2018. In addition, the number that would be more likely to exchange data in return for personalised brand recommendations has increased from 20% to 31% over the same period.
Much of this discussion naturally centres on the host of digital channels now available to engage customers, alongside some of the ways to track them through their customer journey.
This wealth of data is clearly fantastic in what it can offer marketers. However, it also overlooks the power of offering personalisation from a single insight or segmentation, then offering a truly unique and tactile experience that makes the customer feel valued.
This is where print has truly come into its own in recent years, with the fusion of data and new technologies that enable personalisation at scale through print media. While maintaining a focus on the experience the customer has, too.
In a world where data may become scarcer with more restrictions, it could be that personalisation is print’s best-kept secret.
Do you see a future for personalised marketing?
Jacky Hobson, director, Up Marketing
“I think programmatic display advertising – those annoying adverts that follow you around the web – are where marketers are seeing that they’re not getting a return on investment. The flipside of that is programmatic direct mail, which I’m sure has got to be on the increase. My clients are printers on the whole, and what I hear from them and see them doing, and what we’re doing with our own campaigns, is all about personalisation. I don’t create any campaign that doesn’t have a personalised element to it.”
Robin Sumner, managing director, Romax
“Personalisation is about focusing on the unique preferences of each and every customer. Without a directly targeted communication – not just from a marketing only perspective, but from a single customer view perspective across the entire organisation – the customer journey becomes impersonal and increasingly less relevant. Personalisation is driven by data, knowledge of past preferences and, when allowed, modelling on future propensities to buy, so communications marketing and other, which should also be seen as marketing, should therefore be targeted, i.e. personal.”
Rachel Smith, managing director, First Move Direct Marketing
“On the level of basic personalisation, if you’re just using a customer’s first name on a letter or something very simple, it doesn’t have the impact it used to. However, personalisation can be as complicated as you like, in direct mail and elsewhere; I guess you could call it hyper-personalisation. And I think that has more relevance than ever. It’s proven that if you use personalisation as part of your marketing mix, it improves response rates; so I would say that more detailed, complex personalisation will continue to be used, in our industry and beyond.”