Digital Advertising and The Comeback of Relationship Marketing

Michael Kaushansky, Chief Data Officer, Havas US

Digital advertising is everywhere. There’s so much of it and more than 50 percent of it is never seen, according to the IAB. $7.2B of digital advertising is fraud according to the ANA and with the recent YouTube brand safety debacle, how do you gauge what to trust and what not? All this starts with the fact that simply targeting actual people doesn’t generate enough impressions. After all, in the US we have a reported 125M households and 250MM “targetable” consumers, which is not nearly enough to justify the billions of impressions digital advertising exhumes with a double digit CAGR. So is it the end of digital advertising as we know it? Forrester claims so in their latest research report.

Not all brands, publishers and agencies are falling into the digital abyss. Brands are starting to rethink their communications approach. While brands want / need to grow and expand their footprint, simultaneously they realize that their existing customer cannot be ignored. This leads us to the four realities in the marketplace that help guide decision-making for the Modern CMO:

The rise of First Party Data: Today, brand loyalty is weaker than ever. Seventy four percent (74 percent) of people would not care if brands disappeared (Havas Meaningful Brands Study 2016). Something needs to change and first party data is becoming a modern CMO’s first choice for customer insight. Two-thirds of marketers identify first party data as fuel to drive revenue and first party data is where the battle for customer engagement will be fought (Forrester 2016).

As the rebirth of Relationship Marketing continues brands have to seek the right/trusted partner to truly bring their first party data to life and build meaningful long-standing relationships with their customers

The rebirth of Relationship Marketing: There is no other way more powerful to communicate with your customers than by name. There’s a perception that email and direct mail are antiquated channels. If so, then why when Starbucks sends any free drink offer it is always in the form of an email that leads with the customer’s name? By the way - that is the ONLY Ad from Starbucks that I pay attention to. Warby Parker just sent me the coolest direct mail piece, so awesome that I can’t just toss it, and so I gave it to my kids who pinned it on their wall. The newer social channels including Snap Chat, YouTube and Facebook have realized that using known customer data as targeting is most effective; therefore they’ve all launched customer match. Even established publishers are flocking to customer match (NYT, WSJ, AOL, etc.). In the event you’re not convinced, here are a few thought starters:

• Established customers will buy more, more often
• Satisfied customers often refer new customers
• Loyal customers tend to pay a premium
• Retaining customers makes gain by competitors hard

Privacy is the next Tsunami: Too many breaches, too much lost information and brands and agencies are at risk. Advertiser and media agencies cannot manage or host personal identifiable information (PII – FTC, FCC regulate potentially sensitive and identifiable data), unless they are certified to do so. Without certification, even simply taking an email list and uploading to Facebook can have stark ramifications for the agency and/or brand. Yet, knowing the value of first party data and as more channels become addressable and adopt customer matching, using PII and a certified partner will be critical. Furthermore, uploading a custom audience list to Facebook, without any prep work, is dumb-targeting. Brands should segment their customers prior to the upload / targeting to enhance personalized communications and content.

Tech orchestration is more critical now than ever: To truly manage first party data in an effective way requires marketing technology. It is one of the most important aspects of Relationship Marketing. The ever-changing purchase paths of customers beg for insight and emergence of new channels and data,and require integration. Yet, it’s hard to navigate the ever-evolving landscape of marketing technology as such brands need a trusted partner. Brands must demand integrated solutions from their agency(s) to become a truly customer-obsessed marketer.

Modern marketers have realized the importance of harnessing and nurturing relationships with their customers above all else. As the rebirth of Relationship Marketing continues, brands have to seek the right / trusted partner to truly bring their first party data to life and build truly meaningful and long-standing relationships with their customers.