This article was originally published in WARC News & Opinion on November 13, 2020.

Too many companies are obsessed by technology and data, yet few have experienced significant improvements in return on investment (ROI) as a result of personalisation, writes Lars-Alexander Mayer.

Between the changes from Apple (IDFA) and Google (cookies), coupled with increasing government legislation following the GDPR and the CCPA, marketers are growing concerned about data usage and ownership.

To manage these concerns, marketers have been assembling their own technology stacks to manage their customer marketing data. However, as TD Reply learned in our recently published report ‘Rewriting the Marketing Playbook,’ while marketers are right to ‘own’ their customer data, their approach to data management must be business-first and not technology-first.

In trying to emulate the success of Google, Facebook and the big technology companies, too many marketers have put the cart before the horse by thinking technology-first. This has resulted in organisations collecting lots of data, much of it duplicated across different company siloes. But what is the value of all this data? What key performance indicator does each data point enable the marketing team to understand?

From TD Reply’s work with leading global brands, I can tell you that the data management process must begin with business metrics. Organisations need to only collect the data sets which enable them to understand customer needs, improve performance, and provide better service.

Data lakes can quickly become data swamps

Today, too many companies are obsessed by technology and data. They invest in technology infrastructure to capture data across the organisation, with any and every customer touchpoint inserted into a database. What started out as a data lake becomes a swamp full of data, much of it with little applicable marketing or business value.

Instead, businesses must start by asking themselves business questions. What do my customers want and how can my team deliver it in the best and easiest way? Then, businesses need to focus on defining, collecting, and analysing the data which will enable them to deliver the solutions their customers want.

For example, last year, Adidas published research showing that its attribution data was erroneously accrediting e-commerce as the main driver for sales. Only through a deeper dive using econometrics did Adidas discover that the company had undervalued the impact of video and other brand-centered marketing activities. By asking better questions, Adidas was able to more effectively manage its customer-centric business.

Personalisation has been a trend in data-driven marketing over the last few years, yet few marketers have experienced significant improvements in ROI due to personalisation. Customers are not looking for a marketer who knows their name and what they bought last month. They are looking for someone who can make them an offer that will delight them today and in the future, and this can be accomplished by being a customer-centric marketing organization.

Be agile with people and technology

As we learned this year with COVID-19, business needs can change dramatically and quickly. That is why marketing organisations need to be agile. It means working with adaptive feedback loops which can be changed based on customer responses and market dynamics. It is also important to recruit people who can adapt to changing environments and market conditions, and implement tools and technologies that support agile operations.

Let me be clear: data ownership for marketers is critical. However, marketers need to be ‘business-first’ and not ‘data- or technology-first’. Marketers need to determine which data they collect and analyse based on the business objectives that the data will empower.

Real potential of data is neglected

Thinking business-first is also about seeing though the marketing hypes of today and keeping the big picture in focus. Contrary to what big tech will suggest, and as the Adidas case attests, personalised ads and user-level data do not actually make marketing more effective and have little to do with customer-centricity. In reality, the data they generate is virtually worthless for answering the big questions that truly matter: what marketing activities are really driving my sales and my brand? How is my brand perceived? What markets should I target next?

Today, unfortunately, marketers use data mostly for tactical purposes such as for the optimisation of campaigns, neglecting its much more interesting strategic, predictive and explorative potentials. As a result, user-level data makes up a big part, if not the biggest part, of the data sold by different martech and adtech companies today. Real strategic value for businesses, however, is found in cross-section data such as ‘Share of Search’.

For example, a recent WARC article addressed how Share of Search is emerging as a proxy for Share of Market. We have enabled several global companies to prove Share of Search as a highly accurate Share of Market proxy in countries in Europe, North and South America and Asia (including China, using Baidu Data). We enable marketers to not only save time and resources, but also to be more precise in their marketing planning, as Share of Search can also be calculated on a regional or city-level.

It is likely that with the coming end of the cookie era, approaches based around using cross-section – rather than user-level – data will gain in importance. While many providers will likely not survive this change, for marketing as an industry this might be good news.

Forced to shift their focus from tactics to strategy, marketers may finally move from people-based marketing to outcome-based marketing and contextual targeting, as our report projects. In doing so, they might once again rediscover classic marketing theory and begin to ask themselves on a more regular basis whether what they are doing really adds to sales numbers and brand strength.

In the end, it all comes back to marketing successes and using data to generate insights that are relevant for business. To achieve this, a business needs to ask the right questions to drive for, and enable, measuring marketing success first.

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