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Don’t Fear the Death of Personalized Advertising: 3 Strategies for 2022

One thing is clear — personalized advertising now requires a new game plan. Brands will become even more dependent on their first touchpoint.
One thing is clear — personalized advertising now requires a new game plan. Brands will become even more dependent on their first touchpoint.

There have been many changes in this past year. Many will affect how marketers prioritize their personalized advertising campaigns and messaging channels to reach new customers in 2022.

Most prominently, new iOS privacy features do not bode well for those that historically focused on hyper-personalization. These changes restrict marketers’ access to identifiers or measurement techniques. This reduces the ability of advertising platforms to uniquely fingerprint users.

The net effect of these changes will limit marketers’ access to data. It will also limit their ability to reach users with personalized advertising. All in all, it will make user acquisition much more expensive.

These privacy changes will also accelerate the big shift to emphasize lifecycle marketing in 2022. Brands will become even more dependent on the first touchpoint with a new customer.

One thing is clear — marketing in 2022 will require a different game plan. With a few strategic initiatives, marketers can increase the lifetime value of each customer. They can weather the storm brought about by the demise of personalized advertising.

Flip the funnel to increase user value.

Privacy settings increasingly restrict the hyper-specificity of personalized advertising. However, relying solely on the short-term acquisition of users will not produce the results of the past.

Brands must find their groove and appeal to a more select group of potential long-term customers. They must entice them to provide more information about themselves. From there, marketers should focus on honing the customer journey. The goal is to get them to spend more time (and money) with a product or service.

The focus on increasing customer lifetime value has led to a rise of subscription businesses such as Substack and other news media. Companies increasingly try to retain repeat buyers and increase loyalty.

Some have also found success with product add-ons to increase the value of each customer. One example would be when mattress specialist Casper expanded offerings to include dog beds. Moving forward, marketers will likely see smaller conversions. However, identifying and keeping loyal customers will inevitably bring in more business value in the long run.

Trust in retention over acquisition.

There has always been a disproportionate number of resources spent on user acquisition. However, the best marketers and businesses invested in retaining users. With limited access to third-party data moving forward, brands must double down on user retention and should shift away from “renting” users through one-time digital personalized advertising.

To successfully retain users, make sure the customer journey is a two-way street.

Provide constant feedback loops and touchpoints customized to each user’s behavior. This can be done by strategically introducing personalized offers at the right time in the journey. Examples might include rewarding loyal followers with a special birthday or holiday deal.

Many businesses are providing loyalty programs to increase engagement and repeat purchase activity. A great example of this is how internationally known burger brand Shake Shack leveraged its mobile ordering app to share special event promotions and limited menu items. They used this to increase downloads and attract repeat customers with highly relevant, localized deals based on cultural moments. By increasing its subscriber growth by 184% with promos around local menu collaborations — e.g. Superbowl and Mardi Gras — they captured engagement information to make better decisions around future targeting.

Another tactic is by initially offering freemium models or free trials to decrease user acquisition costs. Once these new users are onboarded, make sure to ramp up regular communications and touchpoints to maximize the chance that these users become loyal customers and will be willing to pay for more features as their journey goes on.

Prioritize collection of first-party data.

In the past, brands could rely on having anywhere from five to 40 touchpoints to reach a potential customer using third-party data.

Now with the reduced retargeting abilities, they are more dependent than ever on how to make the first touchpoint as effective and visible as possible to get the much-needed first-party data. Successful brands will leverage this initial interaction to gather “owned” data (like through explicit opt-ins). These can be used down the line to personalize communication across multiple channels.

Having an omnichannel strategy will be critical as marketers need to meet customers where they are. In 2022 and a hopefully post-pandemic world, more people may be on-the-go versus sheltered at home.

As people return to work, they will be more reliant on mobile devices and will be looking to receive messages on those devices. Legacy companies that are still heavily reliant on email as the primary communication channel will continue to feel the pinch, as savvy brands leverage new channels such as in-app messaging, push notifications, and SMS to gain cost-effective touchpoints that complement their email strategy.

Leading into 2022, brands that have already invested in lifecycle-driven marketing and retention, a mobile-first messaging strategy, and first-party data collection will have an excellent advantage. As a result, other marketers will soon need to follow suit and add new customer touchpoints, especially non-advertising ones. Likewise, they’ll want to ensure they’re having an omnichannel conversation with each and every customer for a new mobile-first generation.

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