Personalization May Be Declining Due To Complications, Not Enough ROI

Brands may abandon their marketing personalization efforts in the coming years in the face of rising complexities, risks and the lack of a defined return on their investment. Research and advisory firm Gartner shares research that shows that by 2025, 80 percent of marketers who have invested in marketing personalization will abandon their efforts due to lack of ROI, the perils of customer data management or both. The company also found that 27 percent of marketers believe data is the key obstacle to personalization, revealing key weaknesses in data collection, integration and protection.

“Personal data has long been the fuel that fires marketing at every stage of the customer journey, and the drive to find new forms of fuel and devise new ways to leverage them seems to be boundless,” says Charles Golvin, senior director analyst in the Gartner for Marketers practice. “However, this quest has failed to meet marketers’ ambitions and, in some cases, has backfired, as consumers both directly and indirectly reject brands’ overtures.”

Marketers face other impediments to personalization success including the continuing decline in consumer trust, increased scrutiny by regulators and tracking barriers erected by tech companies, Gartner reports. While personalization comprises 14 percent of the marketing budget, more than one in four marketing leaders cite technology as a major hurdle to personalization.

“Consumers have developed an increasingly jaundiced eye toward marketers’ efforts to embrace them,” adds Golvin. “Their increasingly cluttered email inboxes and mobile phone notification centers may lead them to ignore even the most carefully personalized and contextualized message. Marketers must really adopt the basics when it comes to test and learn before investing in personalization technology and new tactics.”

Gartner also predicts that by 2023, chief marketing officer (CMO) budget allocation on influencer marketing will decrease by a third as consumers continue to lose trust in brands and entities they don’t personally know, and by 2024, artificial intelligence identification of emotions will influence more than half of the online advertisements consumers see. Also, by 2022, 25 percent of marketing departments will have a dedicated behavioral scientist or ethnographer as part of their full-time staff, and that in 2023, one-third of all brand public relations disasters will result from data ethics failures.

For marketing leaders evaluating their personalization efforts, Gartner recommends producing a pilot or proof of concept (POC) with a vendor before investing in a personalization tool. It also suggests growing personalization efforts from a set of tactics or tools to a capability by focusing on strategic planning, use case development and consent management as part of a personalization roadmap, and collaborate with cross-functional teams to align personalization efforts and increase momentum. It notes that sharing control of personalization efforts can lead to shared insight and expand collective impact and ROI.

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