The faith that the marketing industry has placed in personalisation in recent years has not and will not yield the ROI that brands are seeking, according to the latest research by Gartner. But its predictions for 2020 focus on the poor results from digital marketing, using emails, influencers on social media and SMS. Not print.
Drawing on research, in the main from the US, it says that personalisation accounts for 14% of a marketer’s budget, but around 25% say that the technology needed is too complex and is a barrier to personalisation. There is increasing evidence of consumer resistance to personalised digital messages. This will mean that “by 2025, 80% of marketers who have invested in personalisation will abandon their efforts due to lack of ROI, the perils of data management or both”.
Poor management of data will continue to cause PR disasters and marketing expenditure on influencer marketing on social media channels will drop by a third as consumers lose trust in brands and entities that they don’t personally know. Consumers will instead place their trust in smaller and more closely knit relationships.
There will also be a big upswell in the use of what Gartner calls Artificial Emotional Intelligence, described as software that can gauge a person’s emotional state, using this to fine tune a digital message that is more likely to achieve cut through. This will require investment in behavioural specialists.
However, Gartner doubts this will be effective. “Consumers have developed an increasingly jaundiced eye towards marketers’ efforts to embrace them. Their increasingly cluttered email inboxes and mobile phone notifications centres may lead them to ignore even the most carefully personalised and contextualised message.”
The consultants do not go as far as to suggest this will favour a physical printed communication with its higher rates of trust, but propose that marketers must support influencers with smaller reach.
The big trend is towards being able to assess emotional states through tracking searches, using facial recognition to pick up micro movements and through bio sensors. “AEI allows marketers to achieve highly resonating personalised targeted ads as more marketers seek to build closer connections with customers beyond demographics,” it says, adding: “Mounting privacy concerns and customer skepticism could be a big hurdle and seriously slow down the progress of AEI application in marketing. The key is to give consumers a sense of control through anonymous data collection, transparency and, more importantly, value exchange (offering consumers tangible benefits in exchange for data).’
Like personalisation, AEI must prove its worth in terms of ROI. The lack of return from personalisation will lead to one in three marketers reducing their spend on personalisation by 2021 and to those providing the software and implementation to expect lower revenue by 2022.
This includes direct mail as well as digital marketing channels. A Gartner analyst says: “Our rationale in the research is that personalisation that cannot be tied to a direct ROI is at risk. When applied to non digital channels (perhaps direct mail) personalisation serving Marketing and CX (customer experience) use cases (vs. Digital Commerce) sees even greater risk, as showing ROI will be harder, not easier.”
In short, unless the technology can be shown to lead to sales, brands will become increasingly sceptical. The predicted fall in spend may be a necessary correction to the eagerness to spend on personalisation as it is time to take a step back, examine the data being gathered and run trials to check that the digital approach is correct.
The report recommends that brands analyse customer journey maps to understand the points at which to deploy personalisation, and which, although it does not say so, they could also use print to enhance the digital message.
By Gareth Ward
All kinds of marketing must be able to demonstrate a strong ROI which spells bad news for personalised messaging using social media, email, influencer marketing and more, says Gartner. As a result its use will fall the consultancy group predicts. Direct mail must also demonstrate a strong ROI.