Mark Twain once said, “History does not repeat itself, but it rhymes.”
A generation ago, before the Internet became an all-encompassing resource for everything from groceries to news, print magazine advertising was a powerful channel to reach customers. Adweek’s Magazine Hotlist - with titles like O, the Oprah Magazine, ESPN Magazine, InStyle and Allure - shows hundreds of millions of dollars in advertising revenue. Things changed, of course, as eyeballs shifted to the Internet.
We’re at a similar inflection point with social media platforms.
Here’s a few red flags: Meta, formerly Facebook, has increased acquisition costs at a consistent clip since 2020, - brands report increases of almost 50 percent. However, Facebook’s influence with its most lucrative ad market is declining precipitously: Teenage users have declined by 13 percent since 2019 and are projected to drop 45 percent over the next two years. Young adults between the ages of 20 and 30 are expected to decline by 4 percent over the next 2 years as well.
Another, Apple's AppTrackingTransparency guidelines mean that users must opt in to have their data collected - which will limit access to customer information.
None of this is encouraging news for traditional advertising. It’s time to amend how we spend our marketing dollars and rely less on these platforms for finding customers.
We know marketing activities drive business performance; this year marketers need to revise their advertising budgets and evaluate where they can allocate funds to experiment. You can do this by building your own organic platform, keeping customers in the funnel and bolstering brand affinity.
The Future: Zero-Party Data
Chasing customers around the Internet is no longer a strategy: 41% of U.S. consumers regularly delete cookies and 30 percent have installed an adblocker. Consumers are tired of being the product and having their information bought, sold, traded, and owned.
As the name demonstrates, third-party data is impersonal. It treats customers like commodities to be reached through algorithms. First-party data is an improvement to this, but it’s not 100 percent voluntary on the customers’ part.
The ideal is zero-party data, an almost counterintuitive, old-fashioned approach to building relationships with your customers. Zero-party data is when a customer intentionally and proactively shares information with a brand. In 2022 and beyond, building the kind of business where customers want to give you their information will be critical. Case in point, 65 percent of customers are happy to share their data if it improves and personalizes their experience with a brand.
Brands need to communicate in local, hyper-narrow terms so that they’re serving what is most relevant to each customer.
Courting Your Customer
Two-thirds of customers are willing to share personal information with companies in exchange for some perceived value, and almost half of all consumers expect specialized treatment for being a good customer.
- What are you and your business offering your customers, in exchange for their voluntary sharing of information?
- How are you engaging with your customers in good times and bad?
- How are you personalizing the customer experience?
- What individualized experiences are you offering to your customers to keep them engaged and bring them back?
- How are you leveraging technology?
- Are you using it to enhance your customers’ experiences of your brand, or are you using it as a replacement for human interaction?
Any technology you list should improve your ability to serve customers rather than replace customer interactions. By simply putting money and technology against the ongoing challenges of acquiring customers, merchants are sacrificing the opportunity to engage meaningfully. The extra steps that come with using technology to truly tailor a customer interaction with your business can save you time in the long run by turning a one-time customer into a lifelong advocate.
Said simply: just because technology enables you to send one standard email to your entire customer base doesn’t mean that you should.
Creating an Experience that Builds Trust
Gaining access to zero party data is a way to build trust: 67% of consumers say that it takes anywhere from 3 - 7 purchases to be considered a loyal “regular.” Unfortunately, the time it takes to build true brand affinity is inversely proportional to how long it takes to lose it.
Zero-party data is personal - it’s an intimacy with customers that has become highly unusual in our digital age. It requires a brand to express sincerity in a period where we’re all a bit cynical - and to ask for meaningful information in order to provide true service.
Right now, as new customer acquisition practices take shape, is the perfect time to experiment, allocate budget to test new ideas, and to take chances on other marketing techniques. Failure of imagination will result in short-term results that diminish in the long-term.