Today’s shifting advertising landscape demands a new advertising approach

By Forrester Consulting

The marketing role has never been easy to occupy, and it’s about to get harder. As the advertising landscape evolves to meet the rising demand for personalized and engaging ad experiences, which also respect regulatory and customer privacy boundaries, marketers across industries will be put to the test.  

Soon, the digital marketing tactics they’ve come to depend on (e.g., third-party cookies, mobile device IDs) will no longer be viable. Marketers will either adapt to an entirely new way of operating or risk severe limits on the scale, relevance and effectiveness of their advertising content.

A recent Forrester Consulting study commissioned by IBM reveals how marketers are concerned about the impending digital disruption and the complexity of maintaining advertising impact while searching for solutions. The challenges that marketers contend with today and the implications for select industries include:

Threats to customer trust. Customers expect brands to understand them and serve relevant, personalized content. With the loss of traditional identifiers, personal data that customers are willfully offering up is becoming highly valuable.

However, consumers are becoming selective with the brands that they are sharing their personal data with; consumers must see value in exchange for their personal information and trust that brands will uphold the highest data privacy standards. In this environment, the loss of customer trust in a brand’s marketing tactics has devastating consequences. Indeed, decision-makers in the study cited a loss of customer trust and a resulting reduction in brand loyalty as their top concern.

  • CPG marketers must cultivate trust as they seek to build more direct customer connections. Historically, retailers have mediated much of the relationships that CPG brands have with the end consumer. Consumers’ embrace of e-commerce shopping (particularly during the COVID-19 lockdown) has provided CPGs with a prime opportunity to focus on direct-to-consumer selling. Through direct selling, CPGs gain valuable data that can be used to expose consumer preferences and personalize offers.

However, consumers are relatively new to directly transacting with CPG companies, rather than the retailers they’ve traditionally come to know and trust. As identifiers are restricted, it will be even harder for CPGs to build relevance and trust, and in turn, deliver loyalty-building ads.

Risk of regulatory scrutiny. A growing number of customer privacy regulations in the last several years (e.g., GDPR, CCPA) has made tracking and storing customer data much more complicated. Failure to comply with these regulations can lead to enforcement action, fines and bad publicity that could erode customer trust. It’s no wonder that with today’s regulatory landscape, 49% of surveyed marketers fear the risk of regulatory scrutiny on their marketing and data collection efforts.

  • Healthcare marketers must balance customer convenience and privacy. The risk of regulatory scrutiny is especially pronounced in highly regulated industries like healthcare.

As consumer access to digital health and wellness resources and tools proliferate, healthcare marketers have a unique opportunity to use customers’ data to anticipate their health-related needs. The challenge is connecting with patient populations in the right channels and during the customer’s moment of need, while still prioritizing privacy and regulatory constraints.

Limits on privacy-friendly customer data. An overwhelming majority of surveyed marketers (91%) agree that consumers’ expectations for personalized and engaging advertising is on the rise. As consumers increasingly engage in privacy-protecting behaviors, and while regulations continue to constrain data tracking and storing capabilities, marketers are left searching for ways to personalize ad content. In fact, 85% say they’re drowning in data but are challenged by how to use it in privacy-friendly ways.

  • Automotive marketers must stand out on the virtual showroom. Digital channels offer consumers a wealth of information at every stage of the automobile purchase process, from researching different models to comparing prices and even making a final purchase.

In turn, digital customer experiences have become a new loyalty measure for automobile manufacturers. For improved experiences, marketers need to ensure that every digital touchpoint is personalized to the customer and prioritize reaching them with the right message at the right time in the buying journey. This task is increasingly difficult to execute as identifiers become more restrictive.

Obstacles to messaging and creative scalability. The COVID-19 pandemic has forced companies across industries to adapt to entirely new ways of  engaging with customers. Models of customer understanding quickly became irrelevant as consumers’ most basic needs and ways of transacting evolved.

The pandemic showed companies how critical it is to become adept at quickly delivering messaging and creative assets that are in tune with customers’ immediate needs and context. Unfortunately, 66% of marketers struggle to effectively scale their creative strategy in this way.

  • Retail marketers must fine-tune creative execution in a post-pandemic landscape. Even as the pandemic wanes and life returns to some level of normalcy, including in-store shopping, retail consumer behavior will be forever altered. Consumers will expect seamless messaging and experiences, no matter the channel.

With the loss of traditional identifiers looming, retailers face the difficult task of scaling messaging and creative strategies across digital channels, including display, mobile, and connected TV, while also optimizing for hyperlocal nuances.

A new intelligent approach to scaling advertising stands ready

Reactive advertising strategies will struggle to stand up to today’s challenges. Advanced AI can support a more modern and flexible approach that doesn’t depend on traditional identifiers. Solutions such as these can lift much of the ad execution burden off marketers’ shoulders by:

  • Enabling brands to have intelligent 1:1 conversations with consumers at scale. These interactions not only surface deeper insights about consumer preferences, but they are also more likely to engender trust due to the fact that they are consumer-led.
  • Targeting consumers in their immediate context using anonymous data sources, such as pairing weather and purchasing data to anticipate consumer behavior based on the forecast.
  • Identifying consumers with a high probability of taking specific actions using real-time market signals and a brand’s first-party data.
  • Uncovering and dynamically applying the most influential creative attributes across different audiences to ensure message resonance and scalability.

Learn more

For more information on how advanced AI can help you improve advertising strategies and mitigate key challenges, download this IBM-commissioned thought leadership study authored by Forrester Consulting, “The AI Advertising Advantage.”