Decision-tree overview and guideline considerations for CMOs, CIOs, CDOs, and marketing professionals in the Automotive Sector
- Published on August 30, 2021
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Like many enterprises I have been speaking to lately, perhaps you too are planning to super-charge your marketing strategies with a personalization engine with which to engage customers at key moments throughout their lifecycles. Pursuing this direction requires courage to make the efforts and manage the risks required to make such a transformation a success, especially at this time within the automotive sector. What makes personalization initiatives that include implementing a CDP (customer data platform a key enabling MarTech component), tricky is that this is still an emerging tech space and marketing discipline. Some of you may already have started down this road already, so you may be able to relate to this from first-hand experience.
In this article I offer some insights which I have discovered and which may help support your internal discussions and decision making process by shedding light on potential blind spots – especially the under the section below: “Choosing a CDP” . Let’s start this conversation with some definitions and context.
What is NextGenPersonalization?
Most of us are familiar with the basic concept of personalization. It is about getting the right name, right context reflected in a message targeting an audience segment. The message is based on attributes such as demographics, interests, physical location, and purchasing behavior. Often this data is pulled from within the marketing functional silos – media, CRM, sales – to support outbound campaigns. And, as is so often the case within the auto sector, enormous budgets go towards performance marketing, broadcasting messages and sales promotions to generate leads and sales. Leads then are sent to dealers for follow-up. Mission accomplished. Success is measured on conversion KPIs like CPL, CPA. It’s transactional.
This age of marketing is dying fast. It’s tremendously wasteful and a growing ratio of customers today are demanding so much more of OEMs.
NextGenPersonalization, a trend recognized by various analysts including Forrester, goes much further. For a start it is experiential. It is fueled by a seemingly unlimited and growing number of data signaling sources. These are feed in real time into a single source (CDP), where they are matched to a unified profile, and then AI is used to instantly analyze and synthesize these signals into hyper targeted audiences. These profiles are then pushed and activated at the points of customer engagement – email, banners, onsite, OHH, CTV, etc. The UIDs are matched to hyper-personalized content, rendered at digital millisecond speed, and to deliver personalized experiences in key moments of the customer’s lifecycle.
The purpose is not transactional. It’s relational, continuously always on, scheduled in moments relevant to the consumer.
So why now ? Automotive Industry Sector Change Drivers
It’s time for a change, and not just because it is technologically possible. Lately the market dynamics impacting the automotive sector have been exceptional, unpredictable, and generally challenging for management leaders to navigate. From marketing professionals, these times demand a creative and effective response in order to survive and thrive. Here are a few of the critical change drivers that marketing and business strategies must take into account:
1. Multiple Covid-19 waves that continue
2. Supply chain bottlenecks and chip shortages increasing uncertainties around costs, profits and profitability planning
3. Climate mitigation and CPO26 pressure to meet targets
4. Accelerating pace of competitor innovation and time to market speeds,
5. Changing consumer preferences driving privacy policy, security and protection, increasing migration to digital everything, IOT, purchasing,
6. Shifting business models from conventional car ownership towards car sharing and mobility-as-a-service subscriptions
7. Industry consolidation mergers, acquisition and emerging new OEMs
A number of automotive OEMs have made NextGenPersonalizion one of their top 4 key initiatives to as they see its potential for massive impact on their ways of doing business. Here are some examples of the change drivers it addresses:
Sustainability: The IPCC report released in August of 2021, has increased the sense of urgency for every business to seek out every opportunity to eliminate waste, and minimize negative climate impact through operational reengineering. This includes marketing. NextGenPersonalization has one of the highest potentials to reduce wasteful allocations of marketing resources across many dimensions of marketing. To illustrate one example: simply reducing the delivery of messages to people who are not in-market while focusing on cohorts of individuals who signal clear behavioral intentions in the moment – to buy, to rebuy, to defect, to consume services, to share and evangelize experiences.
User Experience CX: A Forrester analyst recently claimed that up to 80% of marketers will likely abandon personalization as we currently see it being implemented. Consumer attitudes are changing and sharing all kinds of data about themselves. When leveraged within a trusted context, these data sources can support an enormous range of creative possibilities on which OEMs can build compelling, sticky experiences that win fans and recurring revenues at scale.
“Younger generations are broadcasting their lives on Instagram, everything is related to an extraordinary experience, with visual experience becoming even more important,” Van den Bergh told CMO.au., “… only when something extraordinary is created will it be posted and shared. So, brands need to create something that is special, because new consumers only think it’s special when it is sharable. This is what the younger generation wants.”
Profits: NextGenPersonalization has potential to improve operational efficiencies, build customer equity, automate and eliminate manual operations, increase profit margins and demand. To illustrate with one example, using AI, data flow design, and automated processes to replace costly teams of scarce talent typically required to analyze and pull relevant audience manually within siloes – CRM, programmatic, social, etc. – saves time and money. The list of potential profit-making opportunities is long.
What is a CDP?
A CDP, customer data platform, is a central platform that enables brands to manage and activate customer data and data signals from multiple sources from a single point. It uses AI to translate signals and patterns into audience insights and segments. It enables campaign orchestration and optimization tools to activate hyper-targeted audiences, linked to relevant content, rendered at digital speeds. CDP helps to unleash the creative potential of data signals, to fuel personalized experiences.
Choosing a CDP: Guidelines and Lesson.
To help with this question, I was delighted to discover this article on the topic, in the July 28th edition of MarTech Newsletter (an excellent resource by the way for marketers, CMOs, CIO, ICT!). I have paraphrased a few highlights verbatim which caught my attention below and which are well worth taking into considering in your decision tree journey:
Independent vendor dominance
“Over the next five years, you’re likely to see most energy in the CDP space continue to emanate from independent vendors. They have a multi-year lead on the majors like Adobe, Microsoft, Oracle, and Salesforce. Independent vendor solutions can more easily fit into diverse stacks, while the larger vendors have proven reluctant to extract themselves from aging investments in their legacy engagement-tier platforms. Their CDP offerings tend toward parochial as a result, and they’ve largely retreated into relationship-oriented CDP sales strategies — or unsubtle bullying — rather than proving out technical and business fit.” Note: there are over a hundred CDP focused vendors. It is still an emerging tech segment. So it is currently “a highly fragmented marketplace endured, with rapid innovation…”
Unlikely to consolidate
“….You may see some roll-up attempts, where a single vendor acquires multiple solutions to address different market needs (this rarely ends well). You may see technology aggregators acquire a stalling CDP vendor to milk the ever-beloved maintenance and hosting revenues (not great, but not catastrophic for you the licensee). You will see some venture-fueled CDP players get sold to private equity concerns as a transition from a growth to an earnings play (again: not necessarily bad). If the WCM market offers any parallel, you will not see many CDP vendors disappear outright.”
Scope as major differentiator
“…. CDP vendors appear to be differentiating primarily on scope, and secondarily on cost/complexity. Over time, I’d expect the latter dimension to become more important as enterprise capabilities shake out and the market elongates as it matures. In the near term, though, CDP vendors are increasingly distinguishable by scope:
- Vertical depth in terms of the backwards-facing enterprise data management functions they may (or may not) subsume, and forward-facing engagement and orchestration services they may (or may not) provide; and
- Horizontal breadth in terms of the number of enterprise customer experience use cases they address beyond simply the marketing department
Note that expansive depth and breadth in a CDP may not prove the right fit for your architecture and definitely comes with heavier resource burdens.” Explains this MarTech article.
Personalization Platform: What you should do?
From my personal perspective there are basically 3 broad categories to consider:
1. CDP Build your own: integrate and customize from your existing major 4 MarTech vendor. This offers strategic control and broad scope. Cons: It comes with a price tag, vendor lock-in, steep learning curve, potentially slower innovation cycles, and potential talent acquisition squeeze/dependencies on service delivery partners/consultants, slower time to market.
2. CPD dedicated vendors: possibly high-speed innovative cycles, lower cost, breadth/depth potential. Cons: Potential high cost to access CDP specific talent, dependencies on service delivery partners/consultants/activation agencies.
3. CDP-as-a-Service Automotive Sector Marketing and Sales Scope: Speed to realize ROI, sector specialization with reusable operational blueprints – no need to reinvent the wheel to speed learning and time to market, access to talent managed service/self-service mix options to support rapid scaling; cost transparency, flexibility creates transitional opportunity to learn needs before locking into any one CDP solution and until the tech matures further. Cons: potential dependency on external operational support.
None of these categories are implicitly bad choices. Some are more suited than others depending on your organization’s capabilities and business strategies. I have clients that are currently experimenting in each of them. The key is to make an informed choice and get started on your NextGenPersonalization journey.
Further advice from MarTech: “…As always, perform viability diligence on any vendors you consider. An independent CDP vendor may employ only 100-200 staffers, so they may be smaller than some of your other martech suppliers. But don’t dismiss that out of hand; the lesson from the WCM market is that smaller vendors can prove more agile and often more enduring.”
– …. take care not to overbuy here. You may become tempted to select a jack-of-all-trades CDP, but it could prove less agile and more resource-intensive, therefore slowing you down at just the wrong time.
– … don’t underestimate the services side of a CDP. Many CDP initiatives simply never end. The demands for new data inputs and additional activation channels typically don’t let up. You may need outside help on a consistent basis, particularly with respect to data and event integration. Consider carefully whether the vendor’s own services arm offers the best long-term fit here.”
The Personalization Experience Delivery Engine
To further inform your strategy I wish to refer you two Forrester reports that I found extremely relevant to this topic:
1. The Future of Enterprise Marketing. I liked their infographic showing a need to shift the scope of personalization: from cross-channel – to contextual – to moments.
2. Align strategy and Technology To Deliver NextGen Personalization – a functional tech stack schematic and 9 point check list to support orchestration of personalized experiences. It outlines what a personalization experience delivery Engine could look like.
My passion and mission is to help visionary companies to “unwaste potential” through the removal of barriers to growth through innovation. Whenever you have questions on CPDs, NextGen Personalization or any other growth related topic please contact me. I welcome your feedback and any experiences you may wish to share:
Published by John Lindsay, John.lindsay@wide-open-networks.com
#NextGenPersonalization #CDP #CDPasaServce #MarTech