The Future is Personalized Marketing
At Jivox, we had our best year as a company in 2020. We grew significantly over 2020 and had our most profitable year to-date. We also grew our team by over 25 people and signed up many new customers including eight new Fortune 500 brands. This was, in many ways, a paradox and certainly not what I expected, considering how dreadful the economy, marketing budgets and just the difficulty of doing business became during COVID-19. As I reflected on this over the holidays, I thought I would share some of my thoughts on why we were able to continue our growth and success as a company despite all of these hurdles:
Marketing budgets shifted significantly but did not disappear
While it is generally true that in severe economic downturns advertising and marketing budgets are the first to get hit, what was different this time is that they didn’t go away but just shifted – some of the shifts being seismic in nature. First, many brands – retailers in particular – quickly realized that eCommerce sales were the only viable option to get consumer purchases to continue, and started shifting away from outdoor, TV, sports and other advertising areas to digital marketing and advertising. Second, while some brands like Travel and Hospitality were hit very hard (with several stopping all advertising spend), others like Telcos and retail eCommerce increased their spending significantly. So even though these shifts were substantial, they resulted in a balancing out of our business, with the upsides overtaking the downsides overall.
Cost Savings and ROI became very important
Brands quickly had to figure out a few ways to save money on marketing spend as budgets were cut in response to lower consumer demand. One area that stood out like a sore thumb was content and creative production. Amortized over smaller media budgets, these costs became even more pronounced. Most brands were spending way too much money on duplicative and manual methods of producing creative and content. Whether for simple language and packaging variations or for personalization of creative and content for eCommerce, traditional, manual production processes were eating up marketing budgets especially as the need to run such content across many channels (e.g. the various social platforms, CTV, native etc.) were growing exponentially. Brands quickly realized that investing in creative automation technologies such as DCO could save them lots of money. Here at Jivox well before COVID, we published a research report showing how brands saved $642M by using the Jivox DCO creative automation platform. We are continuing to develop technologies that do this even better.
The move to eCommerce and Direct-to-Consumer Marketing
The move to direct-to-consumer sales accelerated significantly during COVID as retail brick and mortar channels got significantly disrupted. This called for brands to quickly shift from upper funnel brand building strategies designed to drive people to stores to lower funnel performance marketing designed to get people to buy online. This required a move to more product-specific and offer specific personalized messaging, which again traditional tools and methods could not accomplish at scale. Enter Jivox DCO creative automation. This capability, enabling precise and data-driven creative and messaging to be produced and delivered at scale, was used for launching DTC and eCommerce marketing programs for several brands during the pandemic.
Consolidation of Tech Stacks
As brands looked for cost savings, their marketing teams quickly realized they were paying for several platforms that were doing essentially the same thing or at least overlapping significantly. This was partly caused by their reliance on agencies to pick their martech stacks rather than on a well thought-through plan to evaluate and pick the best stacks. Agencies would often pick vendors they were comfortable with or had special pricing arrangements with. In addition, since agencies themselves were siloed and did not typically handle marketing channels like email, website and social, tech selections were limited to similarly niche and narrow channels. Brands took this task on and found significant cost efficiencies to be gained by using broader tech platforms and using their leverage of greater usage across channels to negotiate better pricing than the agencies could. Jivox being an omni-channel platform handling both paid and owned media, benefited from this significantly, our strong first-party identity technology and compliance with data protection standards made us stand out as the platform to prioritize over other technologies for consolidation.
Our Company Culture
This may seem like an odd item on this list, but many vendors providing technology to marketers were thrown in a disarray as their employees were faced to work from home as the companies themselves were facing financial troubles due to loss of revenue. The resulting fear paralyzed many companies and drove them to make significant cuts to investments and personnel. At Jivox, I am very proud of the way our team quickly pivoted and embraced customer needs with the realization that the above trends were driving the market and important to our customers, instead of retreating or being paralyzed with fear. Our People and Culture leadership team (aka HR in other companies) also brought the team together in a very family-like manner, ensuring everyone felt safe, secure and optimistic about our prospects as a company. From organizing Zoom happy hours and talent shows, to sending goodie bags home, our team never felt so globally connected as during COVID. We came up with a name for this culture and created our own hashtag of #unstoppable. This is probably the most important thing that happened at Jivox: it shows that when we as a team come together, nothing can stop us, not even a pandemic as severe as the one we’re seeing. Our investments during 2020 in eCommerce tech and creative automation have already started paying off significantly as we go into 2021.
As we start the year 2021, the question on everyone’s mind is: what is 2021 going to look like for marketers? Will 2020 cast a long shadow over most of 2021 where we continue fighting to recover? Will a new era of marketing propel investments and efficiencies created out of necessity and produce even better outcomes for the business? Here are a few of my thoughts:
Consolidation of Martech platforms for personalization will continue with one more reason to do so – data and privacy
In 2020, consolidation of martech platforms was driven primarily by cost considerations and omni-channel capabilities. In 2021, a strong new reason will emerge – data and privacy. Brands are now realizing that the only data a brand can safely use for personalized marketing is first-party data they collect with consent to use for marketing. Not only is this data much more accurate, it also needs to be handled with significantly better security and privacy compliance. This means platforms that have paid attention to proactively addressing these issues (generally, software driven martech companies) like Jivox are better suited to the task. This will also ensure brands can independently measure and evaluate media providers and not let them “mark their own homework” as former Unilever CMO Keith Weed commented in 2017.
Identity will become the core of all personalization and data-driven marketing platforms
Since Google announced doing away with third-party cookies and Apple recently announced disabling device IDs, brands and platform providers have been working on new solutions to identity. While some progress has been made, a lot of platforms and many brands have had to deal with the COVID crisis as a priority in 2020. As a result, they put identity on the back-burner. Now, it has to become front and center. With just a year to go, most brands need to start working on this on week one of 2021. Jivox and other platform companies like The Trade Desk, LiveRamp and industry bodies like IAB have really put a lot of effort into this and these companies will become the gold standards for managing user identity in a privacy compliant and interoperable manner.
The march to more efficient and personalized creative and content will become a sprint with cost management being a key need
Pre-COVID, brands like Unilever realized significant cost savings by gaining efficiencies in creative and content production through a combination of inhousing and the use of creative automation tools, which also had the benefit of significantly improving consumer engagement and delivering better ROI on content and media investments by their brands. Many large global brands have similarly embraced personalization and DCO technologies to automate and make their creative perform better while delivering bottom line cost savings.
Inhousing will drive adoption of SaaS/Self-Service platforms
As brands look to bring martech platforms inhouse for all of the above reasons, true automation platforms designed for use by a brand’s own employees or by their inhoused agencies will be a better fit. Today, there exists many so-called “martech” companies that, in reality, work as “managed services” platforms where a lot of services personnel were deployed to deliver many of the capabilities. This worked well for media agencies that typically do not have creative and content skills to operate such platforms. Brands, on the other hand, are setting up as part of their inhousing efforts, creative and content studios with data and personalization expertise. The use of self-service platforms like Jivox are key to getting the benefits of reduced costs and increased efficiencies of using inhouse resources.
eCommerce and Direct-to-Consumer sales will drive marketing to be more data-driven and personalized
The consumers’ move towards online purchasing is a permanent one. Many retail brands may see physical stores as not much more than showrooms for products. So even when consumers are able to visit stores post-COVID, physical stores may look more like the Tesla retailer than like a Macy’s. CPG brands who do not have direct-to-consumer offerings are currently fulfilling via e-Tailers like Amazon but may establish their own paths to consumers via platforms like Shopify that make eCommerce easy. This will call for a robust 1:1 personalized marketing technology to help them deliver precise, data-driven personalization.
COVID has created a lot of challenges for marketers to do more with less while simultaneously undergoing digital transformation. The silver lining may be that it has also given marketers the imperative, budget and mandate to make the changes they have always wanted: to make all marketing digital where technology and consumer consented data can enable brands to market directly to consumers while protecting their privacy – delivering truly personalized experiences.