Six data and tech predictions for 2023
Leena Vara-Patel outlines six ways to help businesses on their digital transformation and marketing acceleration journeys.
As an industry, we’ve been obsessing about digital transformation when it comes to marketing, but we’ve gotten a bit lost on what it actually means.
For any business, digital transformation is a huge ask, transcending teams and spanning all areas from business model, process, infrastructure, and culture. It requires an obsession for continual improvement across the entire business.
As marketers, our focus is on a smaller subset of digital transformation related to marketing and that’s marketing acceleration. This is a focus on helping brands transform and accelerate their ability to utilise tech to support data flow and enable smarter media investment.
There have been multiple studies over the past few years proving that those brands that have progressed their data and tech maturity into a more connected and dynamic state do better than those that are at a more nascent stage.
There have been multiple studies over the past few years that have shown brands that have progressed their data and tech maturity into a more connected and dynamic state do better than those that are at a more nascent stage.
The BCG study in 2021 in which they cited high-maturity brands grew their market share by 3 percentage points more than low-maturity brands did on average and also found that high-maturity brands increase sales revenue by 18 percentage points. Similarly, a Deloitte executive survey reveals that 61% of high-growth companies are shifting to a first-party data strategy, while only 40% of negative-growth companies say the same.
It’s safe to say, in 2023, we will definitely be seeing more brands evaluating their data, tech and measurement maturity as a part of their wider marketing approach.
Part of the confusion with digital transformation comes in thinking it’s a destination, marketing acceleration is more about the journey, which in most cases, won’t end as tech evolves, data practices develop and legislation changes.
Sustainable data collection
It’s been said that ‘data is the new oil’. Well, just like oil, it’s not sustainable when you think about the environmental impact to collect, store and process huge volumes of data.
According to a Purpose disruptors report, by the end of 2022 the advertising industry will be responsible for 208 million tonnes of CO2 emissions, which is the equivalent of a staggering 32% of the UK population’s carbon footprint.
As marketers, we’ve been consumed by collecting (and using) as much data as possible to be smarter with our media investments.
But it’s not just about collecting loads of data, it’s about being smarter and focusing on specific data sets that drive real value from how it’s used.
Advertisers may have a lot of data, but key concerns from a marketing point of view are consent, data freshness and accuracy.
Tying in data ‘usefulness’ in developing a sustainable approach to data collection will be more prevalent as we move into 2023.
Value creation in first- and second-party data collaboration
As advertisers seek alternative solutions to existing cookie-based tracking, a clients first-party data is one of the best options they have to directly engage with their customer base.
Plugging into second party data providers can enrich these audiences and find new ones with similar interests and propensity to engage with the brand.
These solutions are not new, but as third-party cookies are phased out by Apple and Google, they have become more prevalent as a way of mitigating the loss of measurement and targeting that third party cookies have provided up to this point.
First- and second-party data are going to take centre stage over the next year as we see more integrated solutions come to market from the Big Tech players, as well as various data stitching and clean room solutions that will work more closely as a bridge between advertisers and publishers in a consented, privacy safe way.
As the reliance and volume of this data grows its accuracy and freshness will become much more important.
Automation and machine learning
Streamlining the process of getting data from brands into the buying platforms will see more automation and integrated solutions become a necessity to avoid lengthy manual data pulls and uploads.
Getting the most out of this valuable data will also be key, and given the volume and frequency of data available machine learning will play a key role in digesting these large data sets into usable, data-driven segments.
This can come from behind-the-scenes platform support such as Data Driven Attribution or conversion modelling to fill in the gaps of non-trackable users, or via bespoke data modelling using cloud-based solutions and data teams to customise audience segmentation more specific to the brand KPIs.
Whilst third-party cookies still have a little time left, there has never been a better time for brands to re-evaluate their first-party data strategy to make sure they are future-proofed for the road ahead.
The CDP buzz word
To gain a customer’s trust and loyalty, marketers will have to be savvy about how they interact with with them. This means contacting customers through consented first-party channels, but based on the customers’ preferred channels and channels such as website and social behaviour.
In order to collect this data in a timely and organised manner, brands will increasingly need to invest in Martech solutions such as Customer Data Platforms (CDPs) to be able to gain market advantage and activate their customer-centric data in real time for best results.
Adding a CDP to a brand’s tech stack is fast becoming the best way to deliver unified customer experiences as they collect and unify first-party customer data from multiple sources to build a single, coherent, complete view of each customer, making that data available to marketers to create targeted and personalised marketing campaigns.
Whilst customising the customer experience has been talked about for the past four to five years, in the current climate it is even more essential that brands look to identify and serve their customers and prospects the most tailored experience possible.
Data clean room allegiances
Even with the demise of the third-party cookie being put off until 2024, more and more marketers are seeing the value of data-driven media.
In essence this means making your marketing budget go further by reaching the correct target audience based on demographics, habits, average spend value and brand interaction.
However, to be able to share this information with media partners in a privacy safe environment, brands will have to utilise data clean room solutions in order to be able to bridge the gap between compliance and activation.
Whilst many of the larger UK-based media owners have already built out their clean room solutions with the likes of Infosum, LiveRamp Safe Haven and Snowflake, other media owners such as Disney are now launching their own solutions which also comprise of audience measurement solutions.
This offers brands the opportunity to activate whilst gaining the audience measurement piece at the same time. While this may be US-centric for now, we think this will become a global solution throughout 2023.
The rise of a new breed of data roles
With all that’s been said already, it would be mad not to address the rise in a new breed of data roles in marketing.
Fragmented tech stacks, navigating cloud-based solutions, contending with first party data, privacy legislation, the demise of the third-party cookie, and the sometimes-wonky marketing data means the job of the data scientist becomes ever more complex.
Enter stage right data engineers, analytics engineers, data architects, solutions consultants and data strategists with equally sophisticated skillsets in SQL, Python, R, Perl, and MatLab. Data engineering combines elements of software engineering and data science coupled with the world of media and MarTech, and it means a complex set of requirements around tech skills and media experience.
Understanding how data flows in platforms and applying the skill to match and stitch is an emerging career path in media and a sure bet to continue for the next three to five years, be it in the existing media landscape or as emerging consultancies specialising in this new world.
We’ll see these roles shifting from more of a ‘feature’ team to fast becoming a bedrock ‘foundation’ team in the future.
Leena Vara-Patel, managing director at the7stars’ business acceleration consultancy 13Minutes.