How to Successfully Navigate the Changing Customer Data Landscape

abstract image of data points overlayed on image of people walking in city

By Jon Stamell, CEO of Oomiji

The digital marketing landscape of the past 10-or-so years has largely been defined by the practice of tracking consumers’ online behavior and using that data to model future purchase intent. At sufficient scale and visibility, brands (to cite one example) can know that a certain browsing history shows a strong tendency to purchase a particular product then target advertising accordingly.

Coupled with cheap, one-to-one segmentation available on social media (where the major platforms often know the most intimate details of a person’s life), brands that never advertised before suddenly found themselves able to acquire new customers and even launch entirely new businesses. DTC retailers like Casper and Warby Parker established successful brands with no physical retail presence, leaning into digital channels to find the right customers online while avoiding costly overhead.

Some of these practices have outlived their usefulness. For example, when it comes to acquisition, shrinking pools of consumers coupled with evolving digital privacy regimes mean that finding reliable new customers has become much more expensive. Brands would do well to revert to the old marketing adage that points to existing customer retention and activation as more reliable and cheaper drivers of growth.

Then there’s the subject of behavioral modeling. Before 2020, consumer profiles and data modeling had been accelerating in size, complexity and utility – growing pools of data and technology made digital advertising performance more and more efficient. The Covid-19 pandemic changed all of that by suddenly and forcefully altering consumer behavior wholesale. People who had never shopped online began getting all their necessities there, and a rapid shift in where a consumer could spend their money (yes to home renovations and electronics, no to restaurants and vacations) suddenly threw the predictive value of existing behavior models out of alignment. Predictive digital behavioral modeling is far less accurate and valuable now than it was before the pandemic.

All of these changes had an impact on digital marketers and advertisers, who are now finding it more difficult to find and convert new customers. As they consider their acquisition and retention strategies, there’s one final detail that businesses must not overlook:

Starting in late 2019, the New York Times published a series of articles they called the “Privacy Project,” meant to enlighten readers into the scope and detail of the surveillance that tracks them online for the purposes of advertising (the Privacy Project also raised less common, but worrisome, concerns about things like unwanted physical tracking data purchased by a romantic partner).

Although the Privacy Project merely illuminated what more and more people were discovering on their own, the scale and intensity of electronic surveillance to which we’re all subject has since become a touchy subject – especially for the businesses that engage in the more unsavory practices.

Put another way, more and more people are becoming hip to digital surveillance, and the vast majority don’t like it. Hence you have Apple disabling device ID tracking and various national governments stepping in with regulations to give consumers more control over their personal information.

Now that Google has delayed their departure from cookies until late 2023, there is likely to be a wave of companies that postpone their own tracking changeover. However, the consumer mood is that they don’t want tracking of any kind but prefer an honest and transparent relationship with brands. This is a time for technology that builds relationships, not tracking.

It’s sometimes predictable when business leaders urge a “back to basics” approach, but in the case of customer acquisition, data and relationships, it’s important and meaningful. Businesses that free themselves from the reliance on outdated tracking methods and digital modeling will be able to build more valuable customer relationships and weather an unpredictable economy.