Data has transformed marketing over the past decade. And the technologies, trends, and regulations behind it constantly evolve and progress. That poses both opportunities and risks to businesses. Given the bleak economic background, marketers must focus their efforts and resources on the most critical areas.
What is data-driven marketing?
Data-driven marketing uses customer information to optimize marketing activity. Data helps brands to understand who their customers are, what motivates them, how they behave, and what content and support can best boost their interest. It is also about making all that information usable – enabling concrete actions and answering the needs of your audience.
Data is the raw material. However, much more than the data alone is needed. IT infrastructure is necessary to support its collection and handling. What you’ll need is a simple problem-solution process. And in this case, the solutions will most probably be proper systems based on insights. Your organization may even hire app developers to create innovative software solutions that harness user data.
So which areas of data-driven marketing will be most pertinent in 2023?
Trend 1: Marketing mixed with AI/Machine Learning
Automation, Artificial Intelligence (AI), and Machine Learning (ML) are increasingly foundational to so many business operations, from machine learning IT operations in software deployment to AI-powered recruitment tools. It is little wonder that they are also increasingly central to data-driven marketing approaches.
Marketing and the new technologies
The volume of data collected by a typical business often makes processing it a task well beyond the capacity of your employees.
Because of the constantly growing niche, new tools and technologies are emerging to support business data usage. These help with data collection, handling, analyzing, and acting on the results. And using them launches a self-perpetuating upward cycle. Deployments will likely yield more data, insights, and actions. That, in turn, results in ever more reliance upon your chosen data solutions.
Technologies powered by AI and ML are setting ever deeper roots. Let us consider a few examples.
Data equips a business with a greater understanding of its customers. Traditionally, marketing focused on an abstract, ‘typical’ customer profile (which probably did not exist in reality). But with modern data-analysis capabilities and a completely revamped approach, businesses are able to treat their customers as individuals.
Personalization is not a new idea in marketing. But AI and ML tools are pushing it further – helping to generate and refine tailored personalized customer communication. What format, tone, and keywords seem to work with each lead? For example, enter a few parameters, and out pops a suggestion for a marketing email.
AI and ML can initiate a feedback loop leading to ever-greater marketing refinements – not just in the content itself but also in the deployment of that content. Automation is already a standard part of marketing deployment – sending out emails, for example. But ML can be used to determine when leads seem to engage best with marketing content. Deployment tweaks can then be (automatically) applied.
Automated copywriting and content
Recent years have seen massive strides forward in AI. The AI and ML tools to support marketers are getting more sophisticated – by the month it feels.
Their range of applications has increased. Chatbots use AI to provide real-time, 24/7 customer support. Marketing emails can be generated at the press of a button, targeting individual profiles and segments. Content engines can churn out blog posts. Just input a few requirements, such as keywords, and, hey presto! The same is true of images, music, and even avatars. AI is improving at producing all of these: a great potential aid for marketing efforts.
Such AI-generated communications, copywriting, and other content may not yet be the finished article. It can feel clunky, lack originality, and contain errors. For example, it may need tweaking to ensure inclusive language is employed. It is perhaps best seen as a starting point in need of a human touch. But, in a fast-moving and competitive commercial landscape, it is likely to become increasingly valuable.
Automated keyword research and topic generation
Businesses need to respond quickly as Google and other platforms update their algorithms for search results. AI and ML will be crucial here, helping brands stay discoverable and relevant compared to their competitors. AI-powered keyword research can monitor the online landscape, identifying spaces and opportunities. Brands quick to identify and exploit these (using AI) by preparing high-quality, relevant marketing content will have an edge.
Automation can help marketing teams maintain the required speed. For example, alongside AI tools that can generate starting point content, there are AI topic generator tools to help get creative juices flowing.
Data analysis and forecasting
A data-driven approach supports marketing teams in so many other ways. For instance, real-time analysis of user engagement with apps and websites enables proactive customer support. That, in turn, can trigger actions that help convert potential leads to buyers.
Such analytics can highlight the effectiveness of digital marketing efforts – establishing return on investment and informing future campaigns. A business can monitor customer engagement across its entire funnel – from nascent awareness to purchasing. Whereas business forecasting used to be a rather dark art, data-powered AI supports more accurate planning and assumptions.
In 2023’s challenging climate, AI and ML will play a pivotal role in helping marketing teams optimize their opportunities. Moreover, businesses must keep up with the rapid progress of these technologies.
Trend 2: The metaverse is coming
The metaverse – for so long an idea confined to science-fiction – is not exactly a part of everyday life yet. Nevertheless, it is approaching quicker than many of us anticipate. And it is likely to be transformational.
Some brands are already establishing a virtual presence – building a space in the metaverse. Here, users can use specialized headgear to view virtual images and environments – to enter the metaverse. Also, brands can partner with metaverse development companies to create engaging metaverse experiences.
These brands can use Virtual Reality (VR) to offer rich and varied immersive experiences. For some brands, this might mean demonstrating a difficult-to-show product (like a new car). Or it might be a virtual shop. Think of Etsy’s Virtual House where customers can view, interact with, and even purchase from the stock range. Other brands (like Nike and Wendy’s) offer a space full of games and fun activities, where the emphasis is on engagement and connecting with customers.
VR is a blank canvas upon which a brand can tell its story – informing, engaging, and entertaining its audience. Its limits for the future are impossible to fathom: billboards in virtual cities, celebrity avatars using and demonstrating your products, or spaces in which people can learn about or enjoy your brand. The possibilities are dazzling but very real.
Data is the building block of these worlds. The time is approaching when such immersive experiences will be a customer expectation. In building these spaces, brands must ensure they align with the desires and behaviors of their audience. And in a world constructed of data, where every minute gesture is rooted in data, every interaction will yield copious further data-based insights – additional fuel for the metaverse marketing engine.
Augmented Reality (AR) offers an alternative virtual path. Hardware is required once more – typically headgear or a smartphone app. But rather than immersing the user in a completely alternate reality, they experience an augmented version of their world: they may see the room they are in, but extra details overlay that experience.
Marketers are already active here. In one of the earliest examples, Pokemon GO encouraged users to locate pokemon in their neighborhood using their app. Or the Ikea Place app enables customers to view products in their homes – a virtual form of ‘try before you buy’. In 2022, noticeably more brands came on board.
Once again, data will underpin this. What support or experiences do customers need? And the AR will generate yet more data – the raw material for further product and marketing insights.
Data-driven businesses will be ever richer in data about their audience. That, in turn, will enable ever tighter targeting of marketing on specific micro-market segments.
This sort of hyper-targeting has carried dangers in the past. It can lead to an overly-narrow focus on existing customer profiles and a failure to nurture new leads. However, with a data-driven approach (underpinned by AI and ML), hyper-targeting makes more sense. The data provides a sophisticated understanding of customers. Zeropark offers exactly that – data-driven suggestions and assistance with accessing available audiences. Why would a business not leverage that?
Earlier concerns about hyper-targeting do still stand. For instance, marketing is not just about efficiently converting the ‘easy wins’. A growing business must also expand the width of its upper funnel and bring more leads into the conversation. But there is no reason why this should not be possible in conjunction with hyper-targeting: the tools and technologies must support the entire sales and marketing funnel.
The next few years will see more and more brands explore the metaverse and AR. The experiences brands build using these technologies should be built around the needs of their customers. Data is foundational, making it all possible and informing decisions. Stepping into this virtual world will inevitably trigger a snowball effect where ever more and ever richer data is yielded. Brands can then use this to drive their marketing further.
Even for those brands holding off making immediate moves, now is a crucial time for watching and preparing. In a world where immersive experiences are rapidly gaining traction, businesses need to be ready to move fast.
Trend 3: Data privacy and regulatory compliance
Data-driven marketing poses a substantial risk around data privacy. It will remain a potent issue in 2023.
With so much of how we work, live, and play shifting online, people are becoming far more conscious of how businesses use their data. People care about their data privacy and will vote with their feet if they are unhappy. Moreover, measures such as GDPR raise the financial and reputational stakes for businesses even higher.
It is not that consumers do not want their data to be collected and used to improve their experiences. On the contrary, they value this as long as there is transparency, the benefits are clear, and the data is respected and protected. It seems that an honest and collaborative approach is the way to go.
Getting this right helps brands to foster more positive customer relationships, where businesses can use data to inform their activity while customers feel comfortable about the benefits. But getting this wrong can wreak vast reputational damage; customers are likely to lose trust and move elsewhere. And crippling financial penalties await, courtesy of increasingly strict privacy regulations.
As we move into 2023, it is more vital than ever that businesses get their stance on data right. So what are some of the main issues?
The major tech platform giants (e.g. Google, Apple, and Facebook) have been facing the privacy challenges noted above, just like every other business. Their response has vast repercussions for many other organizations. The most significant present aspect of this is probably the fate of third-party cookies.
For many years, third-party cookies have allowed marketing teams to extend their reach on the internet – targeting customers with adverts even after they leave the website. Advertisers loved them, and they have become a ubiquitous force behind our online experiences, following us around the internet, and calling us back.
However, while the exact timeline and process remain vague, they look likely to be deprecated in the coming years as part of big tech’s response to tightening regulations and user worries about data. That will be challenging for some businesses, given their previous fondness for cookies. Yet, in some ways, it is best framed as an opportunity. Choosing cookieless platforms like Zeropark brings you the benefit of being already compliant with the market preferences while boosting performance without the involvement of third-party data.
After all, tracking will still be possible. And reliance on third-party cookies may not align with the broader digital strategy of the business. Now is the time for brands to forge honest, collaborative, and relationship-building approaches to data. That is the route to robust brand loyalty and reputation. The end of opaque third-party cookies may be a natural, inevitable, and voluntary step towards that.
Brands must focus on building their own first-party and zero-party data capabilities. There is more on this below, but essentially this means an approach to data underpinned by user consent, mutual collaboration, and independent data infrastructures within each organization.
The European Union’s General Data Protection Regulation (GDPR) has been a driving force behind much of the focus on data privacy. The GDPR has significant implications for how data about EU users is collected, stored, and utilized. Other regulations apply elsewhere. Businesses need to understand which laws apply to their operations.
Failure to comply results in huge fines and reputational damage. Compliance requires financial investment, new procedures and workflows, and extensive training. After all, every fragment of personal data that a business possesses (even a single email address) is potentially affected. A cultural change in how an organization treats data is often necessary. It requires genuine and ongoing commitment.
Given all that, it is hardly surprising that businesses are at different points on their compliance journey. Many have already embedded such regulation (perhaps as part of a broader digital transformation), while others are less advanced. For this reason, GDPR compliance remains a key, unfolding trend for 2023.
Data privacy and email marketing
Let us consider how GDPR applies to email communication as an example of its impact. The regulation puts the onus on businesses to secure explicit consent to use data on someone. For example, you can no longer purchase lists of email addresses and contact people out of the blue. And, even with your own leads and customers, people need to ‘opt in’ before you can send them marketing emails.
The journey to compliance concerning email marketing poses challenges. Long-used email lists need auditing for consent. They may need to be scrapped entirely (as Wetherspoons decided). Moreover, people can change their data preferences (at any time); indeed, they even have the “right to be forgotten”. Ensuring compliance is not a one-off moment. It demands a dynamic and ongoing dialogue with customers – a relationship built on trust.
With consent front and center, it forces marketers to ensure their content delivers clear value to the customer (so that they do ‘opt in’ and not ‘out’). It must be compelling and helpful. The focus is on creating better relationships. That – surely – has got to be beneficial for the brand in question.
First-party data utilization
These data privacy issues give first-party data substantial advantages over second-party data (collected by another partner company) or third-party data (information purchased from a data handling company).
First-party data is information an organization collects (with consent) directly from its audience. That can be via all the interactions individuals may have with the organization: website use data, app usage data, purchase history, demographic information (from forms, polls, and surveys), social media interactions, or information from encounters with agents and chatbots. The fact it is consensual and first-hand enhances its value.
With the increasing importance of data privacy and regulatory compliance, businesses are realizing the significance of investing in secure data-sharing services to facilitate ethical and transparent data exchange while respecting user preferences and safeguarding sensitive information.
Once the infrastructure, systems, and tools are in place to support first-party data actualization, it offers several benefits:
- Accuracy: The business hears directly from the customer with no third-party distortion.
- Ease of collection: Once the infrastructure is in place, automation, AI, and ML can leverage its value.
- Cost-effectiveness: Beyond the investment in infrastructure and tools, users give the data freely (with consent).
If handled in compliance with GDPR and other regulations – emphasizing consent, transparency, and customer value – first-party data provides firm foundations for a successful marketing strategy.
Trend 4: Stronger prioritization of online and brand communities
Online brand communities will be a further prominent marketing trend in 2023.
What are online brand communities?
Building online brand communities is a way to engage customers more meaningfully and authentically with a brand. Businesses create an online space where customers can learn, explore, and share. It may be hosted on the brand website or using a social media platform.
A great example of an online brand community is Lego: keen customers can contribute ideas for future sets – product development becomes an open and exciting act of co-creation. In others, users generate content about the brand, including product descriptions, helpful tips, and support for other users.
Setting up such communities requires an excellent understanding of customers: Who would be members? Where would they be hosted? What benefits would they seek? Data-driven marketing can provide the insights needed here.
Such communities can be great for customers, who feel involved, valued, and supported. And happy customers can mean better business for the brand.
Brand communities help establish an open, reciprocal, and collaborative relationship between brands and their customers. As such, they provide a further rich seam of data to support many aspects of the business, from product development, customer support, and, of course, marketing. Indeed, they perfectly illustrate another valuable form of data: zero-party data.
Zero-party data is when a customer openly, willingly, and proactively shares additional information or insights with a brand. For example, customers might be invited to offer feedback to help the business with a particular issue through polls, quizzes, surveys, or user-generated content. The user understands the brand’s aims and volunteers to help.
Data is both a catalyst (helping businesses to set up the community) and an outcome (as further rich insights will flow from it). Note that some of this data may raise additional infrastructure requirements, such as Elasticsearch architecture to deal with more textual or qualitative information: the right tools are essential to make data usable.
Trend 5: Short-form videos and live streaming is back
Short-form videos and live streaming have already become ubiquitous – on social media platforms and brand websites. It looks likely that their use will continue to grow.
Short-form videos generally last for between 30 seconds to 1 minute. This brevity seems key to their success. Marketers have long understood the potential power of all video content, but most agree that short-form offers the best return on investment.
Marketers should leverage that potential. The format offers powerful benefits.
- Short-form videos align with our online behavior. Our attention span seems to have reduced, so content needs to grab a user immediately and deliver its message quickly. In a short-form video, each second counts.
- Brands can showcase their product. Customers seem happier seeing this in a brief, well-made video than reading long product descriptions. They generate interest and awareness – pulling people into the marketing funnel.
- Short-form videos should also accompany a Call To Action (CTA). They might be a gateway to finding out more about a product (via more comprehensive videos, product descriptions, community pages, and ordering details).
- They can be informative and educational, providing genuinely helpful, targeted support.
- They allow brands to tap into trends or topical stories – perhaps a notable news story, celebrity gossip, or a cultural event.
- They are more likely to be rewatched, shared, and go viral than other content.
It is little wonder that marketing teams are increasingly using short-form videos.
Live commerce streaming is also huge right now. The boost it experienced during the pandemic seems to have been sustained. Live streaming can create a buzz around products, especially where there is also a brand community. Many brands are also incorporating sales functionality into such live events, so that live streaming becomes live commerce.
The role of data
Data is key to leveraging the best results from these marketing formats. Marketing teams need to monitor the impact of each video or live event. That can then inform future activity – more investment in successful approaches and tweaks where there was less impact.
Several metrics should be considered, including engagement, viewing times, shares and likes, and conversion rates.
Essential marketing data for 2023
Zero-party and first-party data
First-party data is growing in significance because of tightening data privacy regulations, changes to how the major tech platforms operate, customer concerns about data, and the need for brands to nurture transparent and sustainable customer relationships. Moreover, we have seen the growing importance of zero-party data – information freely given by consumers to help a business do things better. If a brand is serious about building trusting and collaborative customer relationships, data of this sort seems a logical next step.
Web analytics data
A business must know how customers interact with their website. Visitors are potential customers. Marketing teams must support them, ensuring leads find what they need.
Web analytics data supports this. How are customers behaving on the website? Are we right to prioritize mobile traffic? Is there enough content available – in the best format – to meet their needs? Different approaches and tactics can be experimented with (such as A/B testing). For example, what impact does including a short-form video on a product page have?
A business should keep all its information about a customer in its Customer Relationship Management (CRM) system. That makes it easier to leverage value from the data, translating it into fantastic customer support.
Data from transactions and customer interactions
Transaction data allows businesses to calculate the ultimate return on all their marketing investment. Who eventually goes on to spend with the brand after all that effort? It helps a brand identify and understand its core audience.
But businesses should not be limited to today’s purchasers. In a competitive environment, marketing teams must pull more people into their sales funnel. What will generate interest and awareness? How can marketing be personalized to keep each individual engaged?
That is the true promise of a data-driven approach. Not just the ability to hyper-target existing purchasers but momentum to broaden the brand’s appeal – engaging more and more people with the brand. A data-driven approach means using every customer interaction – every website visit, social media encounter, video view, or chat with an agent – to achieve that more successfully.
It’s never too late to better embrace your data
The ideas explored in this article signpost some key areas critical to a data-driven approach. Success requires effort and investment. However, the adverse economic circumstances and more competitive commercial landscape make it imperative that businesses do all they can to stay ahead. Besides, the potential rewards are immense. Challenging times require bold actions.
About the author
Pohan Lin – Senior Web Marketing and Localizations Manager
Pohan Lin is the Senior Web Marketing and Localizations Manager at Databricks, a global Data and AI provider connecting the features of data warehouses and data lakes to create lakehouse architecture along with Databricks and Hadoop architecture. With over 18 years of experience in web marketing, online SaaS business, and e-commerce growth. Pohan is passionate about innovation and is dedicated to communicating the significant impact data has in marketing. Pohan Lin also published articles for domains such as Landbot and PPC Hero.