Data Driven Marketing is Dead - Here's How You Can Adapt

Data-driven marketing, as we've known it for years is coming to an end. The age of near-limitless tracking, hyper precise targeting, and over reliance on purely quantitative metrics has reached a turning point - one that I don't believe we will go back from.

Let's explore a few of the factors that are causing this shift and how marketers can adapt to succeed in the future. 

Data Driven Marketing Explained

First off, if you're unfamiliar with the idea of data driven marketing, let's do a quick review.

I've seen many definitions surrounding data driven marketing but the one that I think best encompasses the general idea is using data as the primary driver for making marketing decisions with regard to optimization and resource allocation.

This data can come from a variety of sources including third party, second party, first party, and zero party data. Here is a brief overview of each.

Third Party Data

Third-party data is information collected by companies that have no direct relationship with the individuals whose data is being collected. It is typically aggregated from numerous sources like websites, apps, and public records. Third-party data brokers or aggregators then compile this data into large datasets that they sell to businesses.

Some examples of third party data can include public demographic data, purchase behavior, interests and much more.

Second Party Data

Put simply, second party data is another company's first party data that they share or sell directly. While third party data is aggregated from multiple areas by a third-party data broker, second party data offers a direct exchange of information. Generally, the best second party data relationships involve related but non-competing companies.

An example of second party data would be airlines sharing their data with a hotel chain or a fitness website sharing their subscriber information with a supplements company.

First Party Data

First party data is information that you implicitly collect from your own customers and audience. You control this data with no middleman or external dependencies.

Some examples of first party data include what customers do on your website, purchase data, email open rates, and other metrics related to your customer touchpoints or engagements.

Zero Party Data

Finally, zero party data is information that a customer gives directly or intentionally to a brand. Zero party data comes straight from the source (your customers and subscribers) and reveals what customers explicitly say.

Examples of zero party data include information given in a customer profile, interests they explicitly select, as well as things like communication preferences.

The Pillars of Data-Driven Marketing Are Crumbling

Traditionally, the data driven approach relied on an abundance of user data, third party cookies and the idea that everything could be measured. However, a shifting marketing landscape has undermined these pillars.

Let's take a closer look at how that is happening.

Abundant User Data

Over the last few years, laws like the GDPR and CCPA have begun to limit data collection. In addition, some internet browsers are phasing out third party cookies and people are becoming increasingly aware of intrusive tracking. All of these trends have made it harder to get quality data (and the amount of it) needed to make reliable decisions.

Third Party Cookies

As noted above, many internet browsers are phasing out (or at least restricting) third party cookies. This means it will be much more difficult to track users across multiple devices and websites. As a result, the data will not be as good and it will be more difficult to get a clear picture of how different marketing channels contribute to a conversion. 

Belief in Absolute Measurement

Traditional data driven marketing has always had some inherent flaws - mainly the idea that everything can be measured and tied to ROI. However, the best marketers have always understood that not everything that counts can be counted - for example, how do you accurately quantify the impact of a brand's reputation or goodwill amongst its customers?

This idea has become even less relevant over the last few years with shifting consumer preferences alongside increasingly complex customer journeys.

Where the Future of Data in Marketing Lies

Now, although traditional data driven marketing may not have a future, capturing and using marketing data for your business still has an incredible amount of value. However, its role and the way we think about it needs to shift.

Here's a few ways I think we can do that.

Prioritize Zero Party Data

This means asking your customers for relevant information that you can use to provide a better customer experience. Some of the benefits to prioritizing this type of data include:

• Becoming More Customer Centric: New campaigns and product launches can be based on what the customer tells you directly - opposed to what you infer from a set of faceless metrics.
• Increased Customer Loyalty: Prioritizing zero party data means becoming more transparent about the data you are collecting (and why) plus finding new ways to engage with customers both of which increase customer loyalty.
• Future Proof Data Collection: Since zero-party data is willingly given by customers and subscribers it is less likely to be affected by future shifting regulation.

Emphasize Why Instead of What

Leverage any data you have available to get a picture of "what" is happening at both the macro and micro level of your business. Then, use it to try and understand "why" that is happening.

Combining this sort of data analysis alongside our understanding from experience and qualitative insights can produce benefits like:

• Getting Ahead: Instead of being reactive based on "what" the historical data says, when we understand "why" we can better predict and take advantage of future trends in our business.
• Maximizing Effectiveness: "Why" allows us to deconstruct past campaigns so that we can recreate and maximize our successes while minimizing potential failure.
• Minimizing Overreaction: If key metrics go down, considering the "why" instead of "what" can help us understand whether a change needs to be made and how quickly.

Take Calculated Risks

There is not always going to be a direct way to measure something and make a decision. Additionally, even when you can measure something, it is not always going to tie directly back to ROI (or be positive if it does). However, sometimes the things that are the hardest to measure are the ones that have the biggest impact.

The best marketers of the future will be the ones that leverage their experience, an understanding of the business, as well as historical data to take calculated risks that have the potential for outsized impact.

Put Yourself in Your Customers Shoes

One of the most important traits any marketer can have is empathy. When we only look at metrics and data, we sometimes lose sight of the fact that there are people behind these numbers which in turn leads us to make bad decisions.

For example:

• Sending too many emails in a short period of time because it leads to higher short term revenue but destroys long term success due to unsubscribes and spam reports.
• Running campaigns that exploit potential customers because they maximize revenue (pressure selling customers after a recent adverse event like a data breach, etc.)
• Deceiving customers with false promises only for them to find out your sales team misled (read that: lied) leading to lower trust and reputation.

As a rule of thumb, consider how you would like to feel and be treated as a customer - then do that. Use the data you have to guide this intuition but only as an input instead of as the primary decision driver. This will allow you to maximize your chances of success by not over relying on the numbers.

The Post Data Driven Marketer: A Hybrid Thinker

The future of marketing isn't about abandoning data—it's about going beyond it. And the most in-demand marketing professionals will be those that are data-informed. In other words, the marketers that don't solely rely on data but balance data fluency with soft skills and emotional intelligence.

Although many see this shift away from the traditional data-driven approach as a setback, I believe it's an opportunity for forward thinking marketers to stand out with better/stronger customer relationships, greater creativity, and a refocus on the human element of marketing.

The era of solely relying on data driven marketing is fading and hopefully it will bring a more balanced human center approach - one that offers a better future for both our customers and those in the marketing profession.