the future of relevance understanding the value of precision …info.zetaglobal.com/hubfs/2016-q4...

The Future of Relevance – Understanding

the Value of Precision People-Based Marketing

By David Daniels, The Relevancy Group

Research Sponsored by Zeta Global

November 2016

The Future of Relevance – Understanding the Value of Precision People Based Marketing P a g e | 1

Copyright © 2016 The Relevancy Group, LLC. All Rights Reserved.

Executive Overview

Marketers are missing opportunities to utilize data to improve the relevance of their marketing and

advertising efforts. We are rapidly moving into a new phase, the future of relevance that leverages past

CRM and contextual targeting tactics to deliver true individual level targeting known as People-Based

Marketing. This approach involves blending CRM data with unknown data in order to recognize the

customer as a person. This notion of people-based marketing allows marketers to target people on an

individual basis at scale for the first time. By leveraging Identity Management best practices and

combining it with The Relevancy Group’s and Zeta’s original Precision Marketing Framework, we present

a new Precision People-Based Marketing (PPBM) Framework. Marketers are rapidly adopting Identity

Management, Data Management, Machine Learning and the ability to target consumers at the

individual level across EveryChannel. We find that Precision People Based Marketers have nearly double

the monthly website revenue than those that do not leverage these tactics.

Digital Marketers Must Begin Recognizing Customers as Individuals, Mimicking Offline Experiences

Many offline businesses -- including retailers as well as travel and hospitality firms-- recognize their

regular customers and have different conversations and receive different offers than new customers

that are visiting the business for the first time. This approach requires knowing the person’s identity and

then utilizing behaviors, attitudes, demographics, and location as targeting attributes. Today marketers

have the capability to target customers via their email address, yet we find that email marketers don’t

utilize all of the data that is available to them (Figure 1). When asked about the attributes that they use

to target email subscribers, just 42 percent utilize demographic data and only one-third use click-

through data. This data underscores the fact that the majority of email marketers don’t do any

targeting, treating every customer the same. Only a few marketers account for engagement behavior.

In the offline world, this would equate to everyone having the same robotic conversations.

Figure 1. Data Utilized for Email Marketing Segmentation

Question: Which of the following customer data attributes has your company used to segment audiences for email marketing

campaigns within the last six months? Source: The Relevancy Group n=402, 12/15 US Only US Only.

The Future of Relevance Has Begun

14%17%

18%19%19%

22%23%23%

24%25%

26%30%

33%34%

37%39%

42%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

Pass Along rateSocial Influence rate

Acquisition source code of the listReal-time location data

Recency of purchase regardless of channelClickstream analysis

Interaction, (e.g. video play)Open rate on previous email marketing offers

Frequency of customer service contactsFrequency of purchase, conversion rate

Customer profitability (e.g., customer lifetime value)Transaction activity/Purchase behavior

Click-through on previous email marketing offersOverall customer spending

Customer satisfaction survey dataGeographic data

Demographic data



Consumers demand relevance. In a recent Relevancy Group Consumer Survey, 55 percent of consumers

state they ignore or opt-out of messages that are not relevant to them. Relevance is when the marketer

utilizes data to segment customers into similar groups of individuals. We are moving to an approach

where the market is beginning to target customers at the individual level. The journey of relevance is as

follows (Figure 2):

Segment: This has been the bedrock of direct and digital marketing for decades. In this

approach, marketers leverage Customer Relationship Marketing (CRM), and recency, frequency,

monetary (RFM) data, which provides a historical legacy view of the

customer relationship.

Context: This is the era that we are currently in. Context uses the best

aspects of Precision Marketing including leveraging real-time data to

utilize event-based information to trigger communications or use as

data inputs into predicative models. If past behavior is the best

predictor of future behavior, then contextual data is working in part

because the past behavior can be as recent as minutes, hours or a day.

This is a necessary step to increasing the precision of marketing.

People: People-Based Marketing (PBM) is a nascent aspect of the

marketplace that we are currently in. It ensures blending CRM data

with unknown data, to recognize the customer as a person. This notion of people-based

marketing allows marketers to target people on an individual basis at scale for the first time.

This approach empowers marketers to implement persistent identity-driven lifecycle or one-off

campaigns.

Figure 2. The Journey of Relevance

Source: The Relevancy Group Analysis 10/16, US Only.

Understanding and Implementing the Elements of the Future of Relevance

• CRM

• Historical

• Legacy RFM

Segment

• Event Based

• Real-Time

• Predictive

Context• Lifecycle

• Identity

• Persistent

People

“55% of

consumers state

they ignore or

opt-out of

messages that

are not relevant

to them.”



The future of relevance is made up of four major cornerstones that include:

Identity Management – The technology and methodology to tie known CRM customer

information to unknown customer information is a key requirement of the future of relevance.

Data Management – The ability to manage a massive amount of unstructured data and on-

board customer marketing and advertising data at scale. This requires additional data tactics

such as hygiene and enrichment.

Machine Learning – The ability to provide marketers with artificial intelligence and machine

learning paradigms to develop predictive recommendations and new targeting tactics.

EveryChannel Execution – The ability to drive relevance across EveryChannel and most

importantly measure engagement across channels and devices.

In addition to these aspects, the solution to support the future of relevance also necessitates a stable

cloud infrastructure, 24/7 support and service, creative excellence and analytics expertise. These

aspects are necessary to address the changes that are brought on by a Precision People-Based

Marketing approach, such as creative changes to address the individual consumer across EveryChannel

(Figure 3). Moreover, strategic and analytical services are needed to determine attribution and prioritize

the most effective tactics for optimization.

These elements are discussed in more detail in the following pages.

Figure 3 – Elements of a Solution to Support the Future of Relevance

Source: The Relevancy Group Analysis 10/16

The Future of Relevance Will be Driven by Identity Management



Marketers are rapidly beginning to deploy Identity Management, which is the ability to establish and manage user identity across devices and channels, online and offline, whether using known and/or anonymous user data. This technique is necessary for the move to People-Based Marketing, which involves targeting a specific individual across channels and devices, as well as more accurately finding look-a-like audiences. This approach is key to the blending of Martech and Adtech, a combination that The Relevancy Group refers to as Madtech. Identity Management also empowers a more accurate attribution and accounting of marketing results across Everychannel. In a 2016 Relevancy Group survey question about the current methods of Identity Management, marketers were evenly split: 24 percent reported using probabilistic methods to match identity and 24 percent said they utilize a deterministic method. Thirty-one percent stated they use a combination of both.

Probabilistic Identity Management relies on anonymized data signals and data analysis to associate consumers or households to multiple devices or click data. Based on probability and heuristics, this method is more popular with those that have privacy concerns.

Deterministic Identity Management uses personally identifiable information (PII) to associate multiple devices and data to a consumer or household. This method is more accurate, however marketers with the most inflexible privacy concerns tend to avoid it (Figure 4).

When asked about their planned methods of Identity Management in 2016, 32 percent of marketers stated that they are moving to Deterministic Identity Management, which is up from 24 percent in 2015. The same number of marketers will use a combination of methods. This blended approach is becoming increasingly important due to the significance of the mobile channel, which requires a combination of data sets for scalable reach. Why? The only scalable deterministic options exist within the walled gardens of Facebook and Google. This leaves marketers to hedge their bets with a combined approach to Identity Management in order to reach users on mobile devices at scale (See The Relevancy Group’s “The Social Landscape: The State of Social Marketing 2016”).

Figure 4 – Identity Management Methodologies

Source: The Relevancy Group 10/16

Identity Management and People-Based Marketing Tactics are Growing in Importance

http://www.relevancygroup.com/shop/the-social-landscape-the-state-of-social-marketing-2016



When asked about the importance of a variety of Madtech plans, 47 percent of marketers stated that implementing people-based marketing (i.e. marketing to a known person) is extremely important, followed by 44 percent of respondents that stated the ability to identify an individual across channels and devices as extremely important (Figure 5). Clearly the market is primed to implement Identity Management and move to People-Based Marketing. Zeta/Acxiom Impact was the first ESP (Everychannel Service Provider) to implement LiveRamp to solve the need to implement both Identity Management and People-Based Marketing.

Real-time data can be more powerful when used for targeting individuals through a People-Based Marketing approach. So it is no surprise that we are seeing the increased adoption of real-time data.

Marketers also have a large variety of product choices to implement Identity Management and a People-Based Marketing framework. Over the last 18 months, there have been dozens of acquisitions by ESPs and other MarTech vendors that have integrated such solutions into their database and digital marketing product suites.

Marketers should look to vendors that have relationships with data on-boarding and identity management partners such as LiveRamp. Deterministic Identity Management will likely prevail and People-Based Marketing will add even higher resolution to Precision Marketing. We expect these trends to continue through 2017.

Figure 5. Importance of Madtech Tactics - 2016

Question: For the following how important are they to your advertising and marketing plans? (Select One for each) Source: The Relevancy Group Executive Survey n=301, 4/16 US Only.

47% 44% 40% 37% 36% 33% 31%

45% 50%52% 54% 52% 52% 59%

9% 6% 9% 9% 12% 15% 10%

0%

20%

40%

60%

80%

100%

Implementingpeople based

marketing

Ability toidentify anindividual

acrosschannels and

devices

Utilizing real-time data toimplement

momentmarketing

Utilizing aDMP (Data

ManagementPlatform)

Ability to mixfirst party and

third partydata

Programmaticad purchasing

Take datafrom onemarketing

channel, use itin another

Extremely Important Somewhat Important Not Important At All

“Deterministic Identity

Management will

likely prevail and

People Based

Marketing will add

even higher resolution

to Precision

Marketing.”



The Future of Relevance Demands Accurate Real-Time Data for Targeting and Analytics

Marketers are increasingly utilizing real-time data to make their campaigns more precise. When asked

about their 2016 priorities in a December 2015 survey, the No. 3 response was to utilize real-time data

(Figure 6). The Relevancy Group surveys document increased adoption of real-time data, showing that

marketers have stayed true to their aspirations. In December 2015, 42 percent of email marketers had

adopted real-time data and in June 2016 that percentage jumped to 58 percent. Real-time data such as

location, web event data, even weather radically improves the precision of relevance. The ability to act

on real-time behavioral elements will advance the context of the campaign and the results.

Data hygiene and enrichment are also essential elements of the future of relevance. It is imperative that

marketers are working with clean data before they begin completely matching known and unknown

customer data, i.e. Identity Management. Marketers must seek vendors that not only have data

enrichment options, i.e. adding additional demographics, preferences and psychographics, but also

those that have experience with data hygiene, correction and Householding. Such elements are key to

Precision People-Based Marketing (PPBM). In many cases Zeta provides these services to numerous

leading online and offline direct marketers established within the form of marketing information

systems, analytic databases and marketing data marts.

Figure 6 – Top Five Email Marketing Priorities for 2016

Question: What are your top five priorities for improving the ROI of your email marketing programs in 2016?

Source: The Relevancy Group Executive Survey n=402 12/15 US Only.

26%

32%

33%

34%

36%

0% 5% 10% 15% 20% 25% 30% 35% 40%

Centralizing our customer data and making itactionable

Greater use of analytics in order to optimize ourcommunications

Utilize real-time data

Improving segmentation and targeting

Improving response attribution



Machine Learning and Artificial Intelligence Are Necessary and Rapidly Growing

For years marketers have been experimenting with predictive recommendation technologies, most of

which has manifested in website personalization. Based on that

history, a new set of machine-based learning technologies has

emerged that relies on sophisticated artificial intelligence.

Recommendation algorithms learn from past behavior and get more

accurate over time.

While this technology is changing rapidly, marketers should seek out

vendors that have core predictive capabilities through complex

modeling and also those that plug into some of the latest web

personalization offerings. Marketers embracing the machines have an

advantage over those that do not.

An April 2016 Relevancy Group survey indicates that 38 percent of marketers are already utilizing

machine learning with a just over a third poised to adopt in the next year (Figure 7).

Figure 7 – Predictive Recommendations Based on Machine Learning.

Please indicate if you currently utilize predictive recommendations based on machine learning in your advertising efforts, if you

plan to utilize them, plan to use them or have no plans to utilize them? (Select One)

Source: The Relevancy Group Executive Survey n=301, Mid-Market n=120,

Enterprise n=181 4/16 US Only.

Identity Management Drives the Realization of PPBM across EveryChannel

38%

35%

27%

Currently use

Plan to implement within the next 12 months

Do not use and no plans to implement within the next 12 months

“In December

2015 42% of

email marketers

had adopted real-

time data and in

June 2016 that

percentage

jumped to 58%.”



One of the many benefits of implementing Precision People-Based Marketing is that the underlying

Identity Management layer ensures that individuals can be consistently targeted across EveryChannel

(Figure 8). Benefits include retargeting a customer elsewhere if they were unresponsive in one channel,

as well as suppressing display ads if you know the customer has already purchased the product. This is

the power of blending CRM data with unknown customer behavior.

Identity Management is effective and necessary to drive one-to-one PPBM, but it also requires

organizations to embrace the following tactics:

1. Privacy: Thirty-eight percent of executives cite privacy concerns as an obstacle in utilizing data

across channels. Ensure you are fully aware of how the current or prospective vendor is enabling

Identity Management and ensure that their methods are aligned with your existing private

policies.

2. Probabilistic vs Deterministic Requires Organizational Buy-in: Know the difference between the

two methods, including how each best fits into your acquisition and retention strategies. Ensure

buy-in from the C-Suite across all parts of the organization. This will change the marketing

budget and ad inventory procurement.

3. Centralize Data with a DMP (Data Management Platform): Identity Management requires the

collection and utilization of first-party data sources, which are often decentralized. Thirty-six

percent of executives cite data decentralization as a Madtech adoption hurdle. Work with IT and

leverage open-APIs to centralize advertising and CRM data in a DMP in real time, as needed.

4. Tap into Expertise: Implementing Identity Management and integrating this approach into existing

systems potentially requires organizational change and agency services. Nearly 30 percent of

executives state that account management and services are important when selecting an Identity

Management solution.

5. Create New Measures: Identity Management assumes either individual people-based marketing or

at the very least that micro segmentation is being done. This will require new measures of success,

as well as trend reports to compare this new approach to previous and legacy campaigns.

Figure 8 – The Journey of Precision People-Based Marketing across EveryChannel

Source: The Relevancy Group Analysis 10/16

The Future of Relevance Necessitates Implementing the Precision People-Based Marketing Framework



In 2014 The Relevancy Group and Zeta Global developed The Precision Marketing Framework (See “The

Precision Marketing Imperative”). This framework has five distinct components that are designed to

address the challenges of marketers, improve customer engagement and drive top and bottom line

results. Over the last two years we have proven that marketers that utilize at least three components of

the below framework are able double their revenue as compared to those that do not. The existing

framework has been updated to add the aforementioned four cornerstones of the future of relevance:

Identity Management, Data Management, Machine Learning and EveryChannel Execution.

These new elements enhance the existing framework and update it to the Precision People-Based

Marketing Framework in the following ways (Figure 9).

Identity Management – These elements enhance the existing integrate, organize and enrich

parts. Precision CRM data, APIs, data readiness and mapping anonymous data to known profiles

are leveraged in the Identity Management process.

Data Management – Similar to Identity Management, these elements enhance the existing

Integrate, Organize and Enrich parts. What’s different now? The velocity and size of the data,

such as web behavior and mobile data require new data management structures and often

integration methods.

Machine Learning – A new concept that touches each of the five parts of the existing Precision

Marketing Framework. Artificial Intelligence and machines can be used across the framework to

predict customer paths, optimize frequency, enhance automations and improve measurement

through machine techniques such as Natural Language Generation.

EveryChannel Execution – Not a new concept but one that is enriched greatly when marketers

can target on a people-based level. Precision People-Based Marketing will transform the notion

of relevance both for the consumer and the marketer.

Figure 9 – The Precision People-Based Marketing Framework

Source: The Relevancy Group and Zeta Global, 10/16

Marketers Utilizing Precision People-Based Marketing Nearly Double Their Monthly Revenue

http://www.relevancygroup.com/shop/the-precision-marketing-imperative-tactics-for-implementing-a-framework

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With so many tactics to select from, this one is a clear winner. Marketers that are applying their CRM

data to their advertising efforts have twice the revenue than those that don’t utilize such data. This

demonstrates the value of PPBM. By taking clean CRM data, leveraging Identity Management solutions

and applying Precision People-Based targeting for online and display advertising marketers are able to

demonstrate the following improvements over their non-people based peers.

Higher Display Ad Click-Through Rates – Those using Precision People-Based Marketing had a 7

percent lift in display ad click through rates.

Unique Visitors. Precision People-Based marketers have more unique visitors (UV), a 42 percent

difference in monthly UV volume.

Web-site Conversion Rate – Our data indicates that Precision People-Based marketers enjoy a

7.6 percent lift in web site conversion rates.

Average Order Value – There is a stunning difference in the average order value (AOV) between

Precision People-Based marketers. They report an AOV that is 12.6 percent greater than non-

PPB marketers.

Email Marketing Conversion Rate – Marketers that use PPBM reported an email conversion rate

that is 11 percent higher than their non-PPBM using peers, signifying that even within email

these marketers are more targeted and sophisticated.

With this survey data in hand we built the following model (Figure 10), which compares the monthly

website revenue of marketers using utilizing the actual reported data from PPBM to those not using

PPBM.

Figure 10 – Monthly Website Revenue, Precision People-Based Marketers Compared to Non-Precision

People-Based Marketers

Source: The Relevancy Group Executive Survey n=301 4/16, US Only.

Model Utilized Actual Performance Metrics of Survey Respondents, Those Utilizing CRM Data in Advertising Targeting Versus Those That Do Not

About Zeta Global | www.zetaglobal.com | @ZetaGlobal

$-

$20,000

$40,000

$60,000

$80,000

$100,000

$57,466

$98,897

Non-PPB Marketers PPB Marketers

(Thousands)

http://www.zetaglobal.com/



Zeta Global is a data-driven technology company that acquires and retains customers through the power

of people-based, precision marketing. We create optimized customer experiences by leveraging data

science, strategy, analytics, and award-winning creative to create a perpetual dialogue between brands

and their customers, through out the day, every day. Founded by David A. Steinberg and John Sculley

(former CEO of Apple Computer and Pepsi-Cola) in 2007, Zeta’s a data-driven marketing technology

pioneer. Zeta Global’s SaaS-based Zeta hub helps 500+ Fortune 1000 and Middle Market brands acquire,

retain and grow customer relationships through actionable data, advanced analytics, and machine

learning. Operating in four continents with over 1,300 employees, they're headquartered in New York

City, with Centers of Excellence in Silicon Valley, Boston, London, and Hyderabad, India, and 25

additional offices around the globe.

About The Author | David Daniels | @EmailDaniels

As CEO of The Relevancy Group, David directs market research and advisory services essential to digital

marketing. Direct Magazine said David is “one of the most influential experts in email marketing, if not

the most influential.” Co-author of the book ‘Email Marketing An Hour A Day’, David has held senior

level positions at Forrester, JupiterResearch, Apple, Anthropologie and other top brands. David is also

the President and Publisher of The Marketer Quarterly a digital magazine and app for marketers by

marketers available for free with registration at www.marketerquarterly and Apple, Google, Amazon

app stores.

About The Relevancy Group | www.RelevancyGroup.com | @RelevancyGroup | 877.972.6886

Measuring consumer and executive behaviors, The Relevancy Group (TRG) provides market research

and advisory services that deliver strategies to optimize a return on marketing investments. Each

Analyst has a minimum 15 years of experience in digital marketing and many are highly sought after

public speakers. In addition to working with some of the top brands and vendors in the digital marketing

economy, TRG produces dozens of surveys, research reports and webinars each year. TRG also publishes

the digital magazine for marketers by marketers, The Marketer Quarterly.

About The Research | The Methodology

This research combines a number of hypothesis driven surveys that The Relevancy Group (TRG) has

conducted. We qualified respondents based on the size of their customer database, email sending

volume, familiarity of their company's marketing efforts, and other attributes such as the individuals’

role/title. Respondents self-identified their company size and market sector category. We collected

descriptive information about these organizations including revenue, email marketing, CRM and

Advertising. The survey utilized skip ordering and randomization and screener questions. The survey

design and final analysis was developed by a team TRG of analysts.

For more information on The Relevancy Group’s services, visit www.therelevancygroup.com, call (877) 972-6886, email

[email protected] or on twitter @emaildaniels or @relevancygroup

Reproduction by any method or unauthorized circulation is strictly prohibited. The Relevancy Group’s reports are intended for the sole use of

clients. For press citations, please adhere to The Relevancy Group citation policy at http://relevancygroup.com/press. All opinions and

projections are based on The Relevancy Group’s judgment at the time of the publication and are subject to change.

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