The Marketing Cost of Living Challenge

This blog was kinldy contributed by Ian Bennet from StudioSpace agency Front Foot Marketing - one of Australia’s leading customer marketing advisory agencies. View their StudioSpace profile here.

2024 is going to finally be the year the cookie crumbles. It has been coming for a while. Most other browsers (those making up 50% of web traffic) have already stopped so it has been a wait for Google to finally come into line. And with that comes change.

We have all known it is coming and we all know and understand the implications and have put in place strategies to address this. Right?

If so, you will know the answer to these 2 questions which a recent CEO asked us:

1. What will be the increase to my acquisition costs if third party data costs more?
2. What does this mean in relation to all the data that we have and the upcoming changes to privacy?

If you can answer those 2 questions then, yes, you are prepared for what is about to happen and already know the value of your first party data and what to do with it.

If not, get help and quickly!

• You will need to know whether all the data you have is going to be compliant under future laws (the fines are getting nasty!). A lot of non-compliant third party data is going to have to be scrapped!
• You will also need to work out what data you need - unless you have permission from the customer you will not be allowed to keep a lot of their data.
• You will also need to work out the frequency with which you can talk to them - having a contact on a database that has not responded to anything let alone bought anyone is not seen as a ‘customer’!

So fundamentally you will need to know why you have a customer and thus their value to your business.

Why? Because the cost of third party data is increasing as the major media publishers create things called ‘Walled Gardens’.

If you don’t know what one is then you cannot answer the first question we asked! And if not here is a quick definition for you!

Walled gardens
It occurs when a service provider (media company) controls all the applications and content on their platform, essentially limiting the set of technology or media information provided to users with the intention of creating a monopoly or secure information system.

Think Apple or Google globally and locally Nine and Seven and even the CBA app where you will find an increasingly closed ecosystem to keep a person in that ‘garden’ for as long as possible by providing content for all their needs. And they ‘own’ the ability to reach people and be able to control how, when and most importantly how much!

Walled gardens are on their way to becoming common internet scenery. 73% of advertising budgets are already fortifying the walls of Google and Facebook, while Reddit’s ad revenue rose by 192% after erecting their closed ecosystem.

The implications are far reaching and not widely understood - Apple’s inclusion of a world-first Mail Privacy Protection feature allowed users to block third parties from information such as email open rates and click-through metrics. Yup the
costs of acquisition are going up across the board!

Remember that first question. Did you include walled gardens media costs in that answer?

First party data - less about CX and more about context
Over the last decade an entire industry has built up around the Customer Experience - defining the CX that customers should expect and want. This approach solved many problems and improved the experience of many customers BUT it missed an incredibly important point. Context.

Many people are not ‘loyal’ to one brand and are price sensitive and with the plethora of shopping aggregation sites (Temu being the latest and fastest growing) look for the best value. CX is getting left behind and becoming redundant as are many of the tech stacks designed to keep ‘loyal’ and repeat purchasing people in the funnel.

Contextual marketing
There are any number of definitions for this and here is ours:
Contextual marketing leverages user behaviour such as search terms and browsing activity (device neutral) to deliver relevant and engaging content to enhance the user experience. It reduces wastage through better targeting and improves both conversion and retention.

In direct marketing language this has often referred to ‘the right message to the right person at the right time’. Now with AI and multiple low code platforms this can be done quickly, cost effectively and privacy compliant.

And if you are not considering, looking, testing any of the above you might need to think again.