Dive Brief:
- Eighty percent of marketers will drop personalization efforts by 2025, according to a report from research firm Gartner, "Predicts 2020: Marketers, They're Just Not That Into You." The key reasons cited for why marketers could retreat from personalization are a lack of ROI and difficulties with managing customer data.
- The report says 27% of marketers feel data is the main obstacle to effective personalization because of issues with data collection, integration and protection. Other factors negatively impacting the appeal of personalization as a tactic include a decline in customer trust, increased scrutiny by regulators and anti-tracking efforts by browsers and others.
- Meanwhile, the Association of National Advertisers (ANA) chose "personalization" as its marketing word of the year. Questions from members on personalization started to ramp up in 2018 and accelerated in 2019, the organization said.
Dive Insight:
Personalization is clearly a hot topic right now, as evidenced by the ANA choosing it as its marketing word of the year. Gartner's prediction that personalization's role will significantly diminish in a few years doesn't deny the appeal of personalization as a marketing tactic, but underscores the growing frustrations with it.
After the ANA staff identified finalist words, the organization's members voted to determine the winner. None of the comments from the voters — cited by the ANA in its announcement — indicate anything but marketer interest in personalization. Here are two samples:
- "Personalization is what customers expect. Every current and prospective customer expects that your brand knows them and can deliver what they want."
- "Consumers are busy. Too busy to invest time with anything that's not relevant to them personally. It's all about relevancy, aka personalization. 'Make it all about me.' "
In a sign of the appeal of personalization, the ANA's Marketing Knowledge Center issued a report in the middle of 2019 that said more than half of customers expect companies to know their buying habits and anticipate their needs, and that half of marketers expect to increase investments in personalization tech. One report team member described personalization as "the most important marketing trend of the century."
But the ANA also pointed out that some data suggests consumers can be underwhelmed by efforts to personalize, more personalization may not necessarily provide a better experience and there is consumer skepticism about the misuse of data for marketing.
Other sources also indicate personalization's pitfalls. An Accenture report last year, for instance, found 41% of consumers felt it was creepy to get a text from a brand or retailer while walking past a physical store, and 35% felt the same thing about seeing social media ads for products they've browsed online.
But the same report also found that 91% of consumers are more likely to shop with brands that send them relevant offers and recommendations. The challenge, Accenture noted, is how to serve consumers' interests without being annoying, overwhelming or using personal data irresponsibly.
Gartner's report focuses more on the internal challenges marketers face with creating personalized messaging. A key takeaway is that if those challenges prove overwhelming at the same time consumers are growing more skeptical of personalized marketing, some marketers could reconsider their commitment to personalization.
To enhance personalization efforts, Gartner recommends marketers conduct a pilot — such as tailored recommendations at the segment level — with a vendor before investing in a personalization tool. Other recommendations include building from strategic planning, using case development and consent management and sharing personalization control with cross-functional teams in order to share insights and expand impact.
