By Alex Song, Forbes Councils Member
As technological advances and the explosion of marketing channels proliferate, marketers have more information, insights and opportunities to connect with customers than ever before. On one hand, this has made it easier for marketers to deliver the personalized, connected, cross-channel experiences modern customers demand; on the other hand, this has magnified the complexities involved in doing so.
As the marketing ecosystem continues to evolve, the demand for data and insights will continue to grow. Particularly in a challenging economic environment, 94% of marketers are already feeling more pressure to deliver ROI than they did previously. Meeting rising expectations while navigating new limitations will be essential to finding success in today’s changing environment. To do so requires marketers to understand the current state of the marketing ecosystem and what can be done to ensure short-term and long-term success.
Will targeted advertising ever be the same?
One particular area under the marketing microscope is targeted advertising. Since the iOS privacy changes, social media platforms are not as effective at finding the right audiences. Targeted marketing was once the key to personalization, increased brand awareness and higher engagement, especially via social media channels. But now, consumer privacy rules are threatening to destroy targeted advertising.
For example, as a result of the iOS changes, Facebook says it will lose $10 billion in revenue this year. There are some who are predicting that this is the end of targeted advertising
Targeted advertising has gotten a bad rap. It serves a purpose, and that purpose doesn’t have to be at odds with consumer privacy. It’s important to note the value of targeted ads: Not only do they offer products and services to consumers that meet their specific needs, but they also help with acquisition costs, which ultimately impact the end price for the consumer.
So, what can brands do to manage the changing face of targeting advertising and still deliver exceptional customer experiences and brand success?
TikTok is having a moment right now, and it can feel like the Wild West. But the reason for this is that there is incredibly high audience engagement and some remarkably low customer acquisition costs. A clear playbook hasn’t been written yet for success, but those who are willing to experiment with the platform are reaping huge rewards by jumping in early. As this ecosystem matures, the cost of acquisition will increase and stabilize. In the meantime, for digital businesses that have a strong creative content strategy, optimized conversion funnels and effective growth marketing capabilities, there are vast opportunities to seize.
Marketing leaders need to hustle hard and experiment with many strategies across multiple channels in order to maximize return on ad spend. Such volatility is better for entrepreneurs because uncertainty makes for a more competitive environment—one where everyone is committed to winning incremental advertising dollars rather than comfortably protecting a huge market lead.
Start with your first-party data.
First-party data is valuable because it is collected directly from the consumer, and it’s data that the brand owns outright. But in today’s environment, first-party data is still hard to get and may offer only a limited amount of scale depending on the size of your business. Additionally, it only gives brands information about current audiences, not about those who are not yet to be engaged. Still, scaling up your first-party data should be your priority, since, with enough volume, this dataset can lower advertising costs and improve your returns on targeted ads.
Look for second-party data.
Second-party data, acquired through brand partnerships with the consent of the consumer, removes the middleman and can be a good source of high-quality, precise data. Because consumers have opted in, this type of data has not been impacted by iOS privacy changes. Using second-party data can give you insights into current and potential consumers while adding transparency to the process.
Leverage third-party data and AI.
Third-party data providers are getting more sophisticated and can now optimize their datasets with AI and data science. This is helping them learn and iterate as they go, which is proving to be an effective way to seek out new audiences while still protecting consumer privacy. Third-party data, combined with machine learning and AI, is paving the way for the future of targeted advertising.
If marketers have learned anything recently, it’s that the only constant is change. As the marketing ecosystem continues to evolve and the rules around targeted advertising continue to shift, modern leaders must stay nimble. Those who aren’t afraid to test out new methods of audience targeting will be in a much better position to deliver the high-quality experiences customers crave and achieve the ROI that brands need to thrive.
Article originally appeared on Forbes.
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