In this week’s guest member blog post, we caught up with Søren H. Dinesen, the co-founder and CEO of Digiseg. Søren looks at sustainability, GDPR, first-party data and more to see if one-to-one marketing is realistically achievable. To find out more read below.
Our industry stubbornly clings to the promise of one-to-one marketing, convinced that it will deliver better results than advertisements that are designed to reach many. Complicating matters further, for the past six years we’ve struggled to achieve hyper-personalised targeting and simultaneously meet privacy regulations, but it isn’t working.
Cookies / Private Signals, Tomato /Tomahto
For reasons I can’t quite explain, our industry has reduced GDPR down to a restriction on cookies: Stop using third-party tracking cookies, the thinking goes, and compliance is more or less assured. But that’s following the letter rather than the spirit of the law.
At its core, GDPR says businesses need a legal basis to collect and use a citizen’s data; permission is one of eight bases. The industry is deploying technological workarounds -- replete with impressive mental gymnastics to convince ourselves that they are privacy compliant -- all so we can continue our quest for data-driven one-to-one marketing.
For instance, we collect user data of people who engage with our sites and apps. This is first-party data and that is fine. But then we work with other data companies that have vacuumed up vast troves of user data to create User ID graphs so that we can match users who visited our site to their mobiles, work computers, smart TVs in the family rec room or hashed emails. Who needs tracking cookies?
Or, we’ll take the data we’ve collected, and enter into a data clean room with a partner so we can compare and contrast data for marketing purposes. This tactic assumes that GDPR doesn’t require us to get the citizen’s permission prior to using their data in a clean room in order to develop a joint customer list for a promotion. That assumption is questionable.
But if we’re being honest with ourselves, we must ask: Do such use cases serve humanity’s request for privacy? Or are we acting in ways that will inevitably prompt another round of consumer blowback and regulations?
And while we’re on the topic of honesty, let’s talk about the efficacy of all that invasive one-to-one targeting. Does it really deliver significantly better results?
The Truth About One-to-One Marketing
Prior to joining Digiseg I led the marketing team of a company keen to acquire new customers. I was under intense pressure to tie every Euro I spent back to a customer. We struggled to grow our customer base and finally, out of desperation, I asked for and received money to launch a TV campaign. Guess what? In two months we doubled our customer base.
This isn’t an anti-digital advertising screed. I am a huge fan of digital advertising, and I work for a company that’s in the business of providing data to marketers and agencies so that they can execute and measure both performance and branding campaigns. We just don’t buy into the notion that success can only be achieved via one-to-one marketing.
The truth is, privacy and performance are not mutually exclusive terms. We don’t need to find new cookie-like ways to build awareness and acquire new customers.
Forget Consumers: Think Household Cohorts
A key to complying with the spirit as well as the letter of the privacy laws -- and to avoid incurring the citizen’s wrath once again -- is to improve on the one-to-many strategy. This, in turn, requires us to replace private signals (e.g. hashed emails, device IDs) with household cohorts.
Household cohorts are segments of users built on data from national statistics offices, such as the building–, motor-, tax- register or census data. The data provided by these civic sources are verified, scrubbed of all PII data, and very rich. For these reasons, it is often an advantage in scenarios where hyper-targeting results in diminishing returns by continually targeting the same subset of consumers.
For instance, household cohorts encompass insights such as home type, savings level, education level, presence of children, lifecycle, number of cars, neighbourhood type and tech level. It also provides insights into preferences, such as propensity to travel.
The benefit of these data types is they do a better job in validating a need for a product than audience segments based on tracking cookies. Plenty of people read about advancements in solar panels, but if they rent apartments in high-rise buildings, they’ll never buy one. But a neighbourhood filled with single family homes in a jurisdiction that offers tax incentives for renewables is a great audience segment? That’s a perfect target to drive conversions.
Put another way, these data allow marketers to reach the entire market, and across any channel, without ever tracking a single user. Instead, it drives conversions by targeting an entire market with the right messaging. Think of it as a data-driven strategy for one-to-many advertising, whether that’s a CTV campaign or a mobile one.
This one-to-many approach can apply to every task on the marketer’s to-do list, whether that’s targeting parents for a branding campaign, or driving users with a demonstrated need for your product to your website.
In these contexts, one-to-many advertising not only addresses the limitations of hyper-targeting but also leverages the strength of mass communication to build a stronger, more inclusive brand presence.
Google has signalled that the end of cookie-based targeting will arrive by the end of year. This is a good time for the industry to implement strategies that respect privacy, rather than pretend to. Let us hope that the deprecation of third-party cookies will usher in a new age, where one-to-many advertising allows us to engage with broader, less invasive advertising techniques that safeguard consumer privacy and still reach large audiences effectively.
Bio: Søren H. Dinesen is the co-founder and CEO of Digiseg. He began his career in the analog world, where he specialised in targeting and measurement in offline marketing. After successfully building and selling this data business, he shifted his focus to digital. In 2015, Dinesen founded Digiseg, seeing an opportunity to apply neighbourhood segmentation techniques to digital advertising. His goal was to develop a privacy-centric targeting and measurement technology that maintains high performance without the need for tracking.
