Kevin Tsang, Head of Corporate Marketing, United Asia Finance Ltd.
Digital transformation is often a key development discussion point for organizations that either need to protect their leading position in the market, or to take over a sizable market share as a small player. But before we dive into the deep web of digital transformation, I would like to emphasize and clarify what is digital transformation. To start, I am not talking about simply having a website, a mobile app or even digitized your POS stations as those are merely digital channels that allow your organization to possibly improve transaction efficiency, or a new means of channel for customers to reach you. As a start, what is in fact digital transformation from a marketing perspective, is the ability to one collect customer behavioral, demographic, social, engagement, and transactional data at each and every (in a perfect world) customer touchpoint at the user level, two aggregate user “signals” to prioritize advertising spend to capture customers with higher intention at a lower advertising cost, and three customize promotional messages by different groups of audiences, a simple example would be differentiating your new and existing customers.
Senior management often ask what is the cost benefit or why is it necessary to collect customer data at user level while third party data is readily available and quite cost effective. Both points are in fact true but it also means these data are publically and readily available to your competitors as well. By advertising in the same arena, you will largely be competing by frequency (aka who has more advertising dollars) and your content/offer attractiveness. If you cannot win in either of these, you will likely lose opportunities to capture your audience.
Publicly available data should be your first layer of audience targeting to first filter your ten million audiences into one million potential customers that meet your criteria, for example age 24-35 with an intent to travel in the last 60 days. Without first party data, that’s where you will stop with the hope your customers will see your ad first. You can improve this chance by advertising at more advertising platforms than your competitors. But, if you have first party data by collecting customer behavioral, demographic, social, engagement, and transactional data, what I would refer to as “signals”, you can prioritize your advertising dollars (aka bid factor) to target those that has given you multiple signals, i.e. higher purchase intent.
Digital transformation is often a key development discussion point for organizations that either need to protect their leading position in the market, or to take over a sizable market share as a small player
Ultimately, giving you the ability to predict and capture your known potential customers before your competitors. These signals could include historic customer data indicating that he/she travels regularly every three months, those that had interacted with your social content, visited your website for research material, or even simply had opened your recent eDM; centralizing all those signals into a single point of truth. As majority of digital advertising is purchased through a bidding model, having the ability to systematically adjust the bid factor is extremely important to control advertising cost and in turn improve your cost per conversion.
Each digital advertising platform usually already have the capability to achieve this, so called retargeting by embedding tags into your website or mobile app, but likely if you are using multiple advertising channels, these data are not transferable and are not user based across multi-devices. Hence, by having a centralized Data Management Platform (DMP), you will have the ability to collect user data across multiple touchpoints and utilize these data across multiple advertising channels. Through DMP, your collected data is user based, meaning prioritization can be by individual not a collective group, and user with multiple devices will also be viewed as a single user to improve targeting and minimize ad wastage. As converted customers are user based, therefore you will have the ability to suppress ads across multiple advertising platforms and effectively minimize wasted ad impressions and improve marketing dollar efficiency. Lastly, content and offers through digital advertising can be customized at per user level depending on the user’s collected signals.
WORD OF ADVICE: Though you can serve digital ads at a very customized user level, i.e. inserting their name or their exact upcoming travel destination and date in the banner, but as best practice it is not advised to do so unless through logged in environments or personal messaging channels because it would invade user privacy and raises a discussion on “creepiness”.
Having the ability to collect first party data is extremely valuable for organization, especially for market leaders, because not only you will have data that your competitors do not have access to, but more importantly you can expand your audience pool more precisely and more cost effectively by using your first party data to do look-a-like targeting rather than spreading your advertising dollars to do prospecting in a mass audience pool. Again, most digital advertising platforms have look-a-like targeting capabilities, but the more important question is which 1 percent of your data do you use to expand your audience pool? Those that had booked a table (simple tags on your website or mobile app) or those that actually came to the restaurant for dinner (tracked through first party data)?
What has been discussed is only the tip of the iceberg into digital transformation for marketing because once you are able to track and target your audience from a user level using DMP, this will also mean you will have the capability to track your on- and off-line conversions back to your every digital advertising dollars using attribution models to credit each advertising touchpoints through a data analytic platform (traditional advertising is possible but will vary by your product/services transaction process), and the ability to customize personal messages to your customers through eDM, SMS, social messaging, etc. using marketing automation systems to improve your customer experience and retention rate. Those two topics will have saved for next time.