The ongoing pandemic has generated further growth in the online shopping sector in 2021. Competition among e-commerce vendors is increasing, thus advertising is a huge contest and users are flooded with offers all across the internet. Any company who wants to reach potential customers effectively and win this race will unavoidably have to rely on targeted addressing, in other words: Personalized Advertising.
Let’s take a look at new advertising options for personalization, see what targeting possibilities are available while considering data privacy and understand which role automation, data maturity, and artificial intelligence play in the process.
Social Audio, Live-Stream-Shopping and Smart Ad Management - what's new within the platforms
Audio Marketing will continue to be one of the big topics in 2022. After the Clubhouse hype, the social networks started experimenting with different types of audio features – from Live-Audio-Chats and In-App-Podcasting in Facebook, Greenrooms in Spotify and Twitter Spaces. Features like these open up new advertising and targeting opportunities for e-commerce companies, while at the same time creating an entertaining experience in an authentic environment close to the audience.
Social and Live Stream Shopping
According to statista, the share of users who made purchases via social media increased by an average of 68 % worldwide during the pandemic.
More than three-quarters said they liked the option to make one-click purchases right within the apps. With Generation Z heavily relying on Influencers shopping recommendations and 97% of them using social media as their top source of inspiration, the Instagram In-App-Check-Out Feature promoted in 2019 was a huge success. A continuous increase of revenue with in-app purchases within the next few years is therefore to be expected.
Instagram, Pinterest and Facebook responded with new developments and launched features for live stream shopping events in late 2021 and beginning of 2022. Moderated by influencers or brand ambassadors, who present products and discount codes within the event runtime and once again combining the entertainment factor with marketing.
Speaking of Entertainment: Of course TikTok, the most downloaded App in 2021, also jumped on the bandwagon and partnered with Shopify to enable in-app purchases in October and will introduce shoppable live streams and affiliate links for influencers soon.
Striking proof of success originates in Asia, where Live-Stream-Shopping is already a huge and very successful trend. Taobao, the largest online retailer in China, has already generated more than $61 billion in revenue with its livestream channel in 2020. It is probably only a matter of time before the trend completely spreads into other high-consumption regions.
Automated Ad Management
Where the creation of more outstanding content for personalization and relevance takes up marketing resources, these can be saved within the ad management. Google’s and Microsoft’s processes are being optimized even further using smart technologies and artificial intelligence methods.
Microsoft now combines shopping-ads and remarketing within their so-called Smart Shopping Campaigns. Bidding can now only be handled automatically, requiring a functioning UET (Universal Event Tracking) system.
Google’s new Performance Max Feature for campaigns will soon be available to all advertisers, combining the ad placement via search network, display, Discover, YouTube, Gmail and Google Maps. Google will also expand their cooperation with Zapier to automate the tasks that include importing and using CRM Data.
This of course leads us to the most important topic in the marketing industry in 2022: cookie restrictions and data privacy, which will heavily impact the importance of company's own data and the way they can get and use other’s “First-Party-Data” - in a privacy-friendly way, especially when it comes to the big players or so-called “Walled Gardens”.
As the big player's data will gain even more relevance, it is to be expected that next to the social network features and ad management options the Retail Media will also provide improved campaign management and advertising options.
Leveraging First Party Data
With Third-Party-Cookies not being an option anymore, companies will have to rely on the data they can collect in a privacy-friendly way. This includes specifically the data they own - their First Party Data.
As challenging as the new privacy laws and restrictions are: The rising importance of First Party Data can also be an opportunity to get creative and explore new ways to work with it in marketing - especially when it comes to customer loyalty, relationships and service. The data can e.g. be collected from email campaigns, surveys, quizzes or for offline retail even via customer identifying card system, combining information from offline and online behaviour. The information that companies get directly from their users and clients is always the most valuable and reliable.
With all data regulations in place data now has to be given willingly. And here comes the tricky part - over the years online users have realized how much data they give away online and how it is used, therefore trust and willingness to share data has greatly decreased. Now it's up to companies to win it back and strengthen the relationship to their customers. This works, when the data is used to create the above mentioned personalized ads and content that is highly relevant to the customers and adds value to their experience.
Without respective data, this kind of strategy is hard to build. Therefore E-Commerce needs to focus on collecting proper data and introduce data-driven processes, tools and workflows.
This recommendation also includes smart measurement of marketing and branding activities: Understanding the effects of the two is the key for the effective optimization of marketing strategies.
This is possible, for example, via Unified Marketing Measurement. It is to be expected such methods will develop further with the increasing capabilities and acceptance of machine learning and AI. Companies that are not yet using these extensively should now get involved as quickly as possible to be able to survive in the market.
Aggregated Data and Future-Proof Measurement Technologies
But what about the data that companies do not own - especially for e.g. from the so-called Walled Gardens, whose channels play yet the biggest role in advertising?
Marketing Measurement providers have been focussing on a bunch of different methods for privacy-friendly user tracking within the past years. Some of them turned out to be not so privacy-friendly, as expected, like e.g. Finger-Printing.
The most promising method works with aggregated data, which can be automatically drawn from all platforms and will not be linked to a single user. Thus, providing an effortless and privacy-friendly option for marketing analysis.
Marketing Mix Modeling
This future-proof technology is called Marketing Mix Modeling (MMM) - and is actually not even a new method. Before the age of digitalisation it was the predominant method for evaluating marketing effectiveness of offline channels, that did not provide any personal information of users. So it’s kind of taking a proved and tested approach to the next level.
Based on the historical aggregated data, MMM not only provides valuable insights from social media and display campaigns, but is also able to generate predictive forecasts through modeling the impact that each marketing channel has on sales - including offline channels and external factors, such as seasonality or weather.
Combining it with the strength of Multi-Touch Attribution (MTA), it enables for the Unified Marketing Measurement mentioned above - and as MTA works with single user’s data, the combination of First-Party- and Aggregated Data is required.
Developing personalized advertising and building user trust when dealing with data will be essential in the future. However, this will only work if the information is collected and processed in a reliable manner.
There are already a lot of automated solutions available that facilitate the entry into advanced data collection, measurement and management processes to set the course for the future and free up resources for the creation area.
The big players such as Google and Facebook will optimize and automate their features in the advertising market even further and faster, continue to grow and thus probably leave smaller Data Management Platforms (DMPs) behind.
It is now more important than ever to leverage aggregated data in addition to First-Party-Data using advanced technologies for an overall holistic, future proof and successful marketing.