How retailers can succeed in the era of anonymised digital marketing

By Richard Wheaton, UK MD of data company fifty-five

As we peer out of the fog of Covid, and look towards a time when we can emerge from Lockdown in the weeks ahead, it is clear the retail outlook has altered dramatically forever. Many titans of the past few decades have collapsed and the genie is fully out of the bottle for online retail. Even the most ardent luddites have needed to embrace ecommerce with physical retail facing regular shutdowns. At the same time a raft of new privacy regulations means it is tougher than it has been to navigate the straits of online marketing.

While the outlook may seem challenging, actually the new world order presents significant opportunities for retailers – thanks to an unrealised strength they have, namely their engaged customer bases. Retailers now have a huge opportunity to follow the data and learn the lessons so they can remain relevant, whatever the year ahead holds.

The end of the the cookie
A huge feature of online marketing to date has been the ability to retarget customers across the internet. This has all been enabled by the dropping of cookies – files that sit on your PC and record your browsing activity. The dropping of these ‘cookies’ on websites has enabled brands to follow customers around the internet and social media sites targeting them with ads. After a series of privacy scandals this is an approach now being cracked down upon by both regulators and tech giants.

Europe’s GDPR and California’s CPA have set out the legal frameworks for new requirements for privacy compliance, and Apple’s ITP safeguards now block the use of third-party cookies on their devices. Additionally Google is adding blocks for its Chrome browser by 2022. The upshot is that retailers need a new approach for prospecting and re-targeting to ensure they spend their budgets efficiently and accurately.

Realising the potential of first party data
The new buzz phrase is consent-based marketing. Existing relationships where consent has already been obtained become far more crucial. For retailers this actually represents a good opportunity to realise the power and potential of huge and often unrealised first party data sets, ranging from transaction data to mailing lists.

The new questions that need to be answered, namely, who are your loyal customers and what are the best tactics for upselling them? Of course, the supermarkets pioneered loyalty cards to track and target customers with offers and, over time, new online direct-to-consumer disruptors have taken these tactics much further. However, in a cookie-less world power sits with the brand that has an existing relationship with a consumer and the key is to invite loyal customers to grant permission to use their data to enable predictive analytics and targeting. For retailers with years of customer data, this is a resource for efficient and effective digital marketing, based on aggregated insights.

The key challenge becomes unlocking the value of this data, collating it, scoring the customers and then being able to accurately and correctly target them with the right offers via the right platform, whether online or instore.

Harnessing the growing power of the adtech giants
And of course targeting new customers remains a priority too. The adtech giants – Google, Amazon, Facebook – look set to become even more powerful in 2021 thanks to their ability to provide an increased level of targeting options within their tools. Digital marketers who want to win new customers must focus on realising the potential of these tools and working with these platforms.

Google is in some ways the most advanced in delivering a scalable solution for cross-channel media-buying teams. Using artificial intelligence, Google processes huge volumes of anonymised profiles to generate aggregated insights for ad targeting. They can accurately track across publishers, devices and even offline channels. From this they extrapolate to the entire population, applying machine learning or more traditional online polling.

These audience aggregation capabilities may appear to be similar to Nielsen’s panel-based measurement model. But this really is digital marketing on steroids. It allows retailers to leverage the tech brands’ enormous identity graphs and universal app tracking capabilities. And because their identity graphs are vast and data collection in real-time, the final estimate is not only accurate, but most of all, granular and actionable – the two main limitations of traditional panel-based systems.

A data focused approach to decision making
While many might mourn the loss of the old systems that were driven by third-party cookies, the truth is that very few had the skills in-house to target consumers with precisely targeted messages anyway. There were often large data discrepancies and ad fraud that skewed the findings, presenting a false picture. Some will be uncomfortable with the consolidation of power within the big tech companies, but the reality is that working outside these platforms will be increasingly difficult.

In fact what is really required in the post-cookie world, is nothing short of a change of mindset when measuring performance. A cultural shift to put data-led decision making at the top table will be as important to you as the tools and technology that you use. As we witness the demise of so many retailers of the previous analogue era, it is time to fully realise we are in a new increasingly AI-driven digital era. Those who are prepared to adapt their thinking will be best placed to succeed.


By Richard Wheaton, UK MD of data company fifty-five

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