This article is written by Snowflake and originally appeared on the Snowflake Blog here: https://www.snowflake.com/blog/top-7-trends-in-marketing-analytics-for-2021/
Powered by advances in machine learning, marketing analytics delivers more bottom-line impact with each passing year. It enables organizations to improve the targeting of ads and other content, optimize their ad spend through advanced marketing attribution, increase customer lifetime value, reduce churn, and more.
While technology is making granular targeting and measurement possible, marketers are also doubling down on measures to ensure consumer privacy and data governance in their initiatives. They’re also embracing third-party data—but in different ways now that the demise of cookies appears imminent.
Here are seven ways we anticipate marketing analytics and customer 360 will evolve in 2021:
1. Continued rise of real-time marketing analytics
By running queries in a low-latency customer data platform, marketers are able to see how their campaigns are performing in real time, filter that view by audience, and identify underperforming segments. From there, targeting and messaging can be quickly adjusted to optimize performance.
For this to be possible at greater scale, marketing organizations will need to invest in a platform that can balance batch data loads with processing for business intelligence and business analytics. In other words, the platform needs to enable different kinds of jobs to run in parallel by adding computing resources to clusters as needed. As a result of this instant elasticity, data scientists will be able to access response data at any time.
2. More attention paid to data security and regulatory compliance
2021 will likely see heightened recognition of the fact that securing marketing data is as important as creating the right infrastructure to deploy it. As a result, marketers will increase their investment in technologies that emphasize encryption, access control, network monitoring, and physical security measures. Meanwhile, they’ll seek to partner with providers who have comprehensive monitoring, alerts, and cybersecurity practices.
To aid compliance with GDPR, the California Consumer Privacy Act (CCPA), and other regulatory standards, and limit exposure to penalties, organizations will increasingly seek out platforms where all customer data can live in one place. Advances in encryption and stateless computing have created new ways to securely store and share governed data so it’s possible to keep live data in a single location and grant on-demand access to that single source of truth. By allowing people across an organization to interact with a single copy of the same data, the work of compliance managers tasked with identifying and deleting each piece of information pertaining to a specific customer becomes much easier, and the likelihood of something being overlooked collapses.
3. Privacy-aware data collection and handling
Related to the previous point, marketers will likely be more proactive about protecting consumer privacy. This will include offering new controls by which users can opt out, purging data once a user has left a platform, scrubbing unnecessary data such as fine-grained location information to ensure it isn’t stored, and enabling stringent access controls to ensure that personally identifiable information (PII) such as email addresses and billing details is segregated from other marketing data.
4. Accelerated adoption of predictive analytics
Powered by machine learning, predictive analytics is the practice of identifying the likelihood of future outcomes by analyzing historical data. It encompasses look-alike modeling, which identifies prospects who are most likely to become high-value customers and customers at highest likelihood of churn, as well as affinity scoring modeling, which gauges people’s interests based on their browsing history. Through continuously improved machine learning models, predictions can become more accurate over time, leading to jumps in customer lifetime value and reductions in churn.
Actual investment in predictive analytics is starting to match the hype it’s generated over the last decade. According to a report published by Zion Market Research, the global market for it is projected to reach almost $11 billion by 2022—rising at a compound annual growth rate of around 21% during the six years leading up to that.
5. Increased investment in first-party data
The death knell for third-party cookies rang loudly at the beginning of 2020 when Google announced cookies would be phased out of Chrome within two years. (They had already been expunged from Safari and Firefox.) Once the lifeblood of the digital ad ecosystem, cookies enabled the tracking of consumers from website to website, letting marketers understand who was coming to their website and retarget ads to them across the web.
Adding low-friction tracking pixels to web pages will be extremely difficult going forward, which means that website operators will have to gather more-limited data on visitors’ behavior themselves and then unify it with other first-party data sets to achieve a holistic view of the customer. This is a big win for consumer privacy advocates—but a headache for advertisers and agencies, which will find it more difficult to retarget ads, build audiences in their data management platforms, leverage multi-touch attribution, and do other essential digital-marketing activities.
To prepare for a cookie-less world, marketers in 2021 will need to have a mitigation strategy. As a starting point, they’ll need to assess their tech stack to understand how data is collected, examine their marketing attribution models, take stock of their first-party data and whether it relies on cookies to be activated, and review their optimization strategy.
6. Rise of contextual customer experiences
Partly in response to the impending deprecation of cookies, marketing analytics will become more contextually sensitive in 2021 and beyond. Given that marketers are losing the rich behavioral data that cookies historically provided, they have added motivation to invest in this promising area of insights.
In practice, this means that marketers will be able to target messaging not only based on known and inferred attributes of their customers (for example, their age, location, household income, and affinity for the brand) but also based on where they are in the customer journey and what frame of mind they’re likely to be in as a result. For example, marketers will be able to tailor the messaging in ads shown to likely grocery shoppers, who can be identified based on frequent visits to known store locations.
Effective contextual targeting depends on marketers unifying their marketing data in a single platform to create a 360-degree view of the customer. We expect to see this trend accelerate in 2021.
7. Increased reliance on reputable third-party sources
While companies will invest in first-party data, that data has one significant limitation: It only lets marketers see how people have interacted with their own touchpoints. Amid the sunsetting of browser-based cookies, companies will continue to invest in third-party data sets that can provide a more robust view of customers and augment the first-party data they collect.
Third-party data has historically been challenging for marketers to source, maintain, and use. New platforms such as Snowflake Data Marketplace are tackling challenges that have hampered data enrichment in the past, such as lengthy time to value, the cost of maintaining third-party data pipelines, and data governance issues.
According to a 2020 study by the Interactive Advertising Bureau (IAB) and Winterberry Group, U.S. marketers spent more than $11.9 billion on third-party audience data last year, up 6.1% from the year before—and we expect the reported growth curve to be even steeper in 2021.