You may be familiar with the terms first and third party data. But you might just smile and nod when somebody starts going on about second party data. Or you may wonder which type of data can deliver the greatest ROI. Then this blog post is for you! In this post, I will break down the three types of data, explain what they mean, and help you understand the value to be gained by each data type.
The entire retail industry can relate to Mark Twain’s reply after reading his own obituary in a newspaper, “The reports of my death are greatly exaggerated”. Forrester’s Online Retail Forecast, 2017 to 2022 has just been released and the results are surprisingly positive.
What has the press missed amid a slew of store closing and bankruptcy announcements this year? Retail is actually growing steadily and is in the midst of a massive transformation. And many of the store closings are a result of brands finally making the tough decisions to right size. Let’s face it, the retail industry has looked at store openings as a way to drive growth for years, but now we’re faced with an overabundance of underperforming assets. Recent research from commercial real estate firm Costar makes this clear:
- US retailers added an average of 160 million square feet of store space every year between 2000 and 2008.
- The US now has an average of 24 square feet of retail space per capita, compared with 16 square feet in Canada and 4.6 square feet in Great Britain.
- In the US, sales per square foot have declined from $350 in 2000 to $330 today.
Facebook has become one of the most effective advertising channels thanks to the amount of data it has on its users. This data allows for a wide array of targeting methods for advertisers. On one hand, the variety of options can be a blessing since it allows Facebook marketers to get more granular with targeting than they can anywhere else. For marketers who know exactly who they want to target, this is great.
On the other hand, the large number of options can also be a curse, since it’s very easy to waste ad spend testing various targeting combinations in an attempt to arrive at the best-performing audience segments.
At Custora we are big believers in the power of continuous testing and optimization. But we’ll let you in on a secret that we have found through our work with some of the largest and most sophisticated retailers in the world. Combining predictive customer lifetime value with Facebook Lookalike Audience targeting consistently delivers 5 to 10x improvements in Facebook advertising performance.
The marketing technology landscape is like the universe, vast and large. By last count, Scott Brinker of chiefmartec.com counted over 5000 marketing technology vendors. And these solutions—driven by the diverse needs of marketers and the imagination of innovative entrepreneurs—don’t always fit into nice, neat categories.
This contributes to the confusion that many marketers feel around MarTech. There is no standard taxonomy for the MarTech solution space, which makes it difficult to break it down into smaller, more manageable chunks of capabilities.
But after many conversations with research analysts and after reading many great articles on the subject, I’ve developed a simple approach to help make sense of this confusing world.
There are three systems that you need to understand
After spending many years as the VP of Marketing at one of the leading personalization technology providers, I have a pretty good understanding of the benefits and limitations of personalization. And while there are very clear advantages for retailers that adopt a well-designed personalization strategy, I worry about the personalization bubble that has been created. There is irrational exuberance in the marketplace today, an almost mystical belief in the impact that personalization technology will have on a business.
Messages from analysts and thought leaders are fueling this fire. Here are excerpts from an email I just received promoting an upcoming analyst webinar on personalization—sound familiar?
“Personalization is being redefined as individualization—structuring interaction, functionality, and content around the real time individual needs of customers.”
“Discover why individualization, not segmentation, is becoming the new standard for personalization.”
The implication is that with the right technology investments, brands won’t need to do any heavy lifting in marketing. They won’t need to dig deep to understand the differences across customer segments, they won’t need to develop personas, and they won’t need creative breakthroughs to propel their business. Just leave it to the algorithms to crunch the customer data and deliver the perfect message to each consumer at just the right moment. Sounds like magic, right?
As my mother always said, “if it sounds too good to be true, it usually is, unless it’s me.”