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{{short description|Marketing strategy using data analysis to deliver individualized messages and products}}▼
{{Multiple issues|
{{original research|date=October 2018}}
{{more citations needed|date=October 2018}}
{{promotional tone|date=April 2021}}
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{{Use mdy dates|date=October 2023}}
'''Personalized marketing,''' also known as '''one-to-one marketing''' or '''individual marketing''', is a [[marketing]] strategy by which companies leverage [[data analysis]] and digital technology to deliver individualized messages and product offerings to current or prospective customers. Advancements in [[data collection]] methods, [[analytics]], [[digital electronics]], and [[Digital economy|digital economics]], have enabled marketers to deploy more effective [[real-time computing|real-time]] and prolonged [[Customer relationship management|customer experience]] personalization tactics.
▲{{short description|Marketing strategy using data analysis to deliver individualized messages and products}}
▲'''Personalized marketing,''' also known as '''one-to-one marketing''' or '''individual marketing''', is a [[marketing]] strategy by which companies leverage [[data analysis]] and digital technology to deliver individualized messages and product offerings to current or prospective customers. Advancements in [[data collection]] methods, [[analytics]], [[digital electronics]], and [[Digital economy|digital economics]], have enabled marketers to deploy more effective [[real-time computing|real-time]] and prolonged [[Customer relationship management|customer experience]] personalization tactics.<ref>{{cite web|url=https://www.forbes.com/sites/adobe/2014/05/12/why-personalization-is-key-to-the-future-of-marketing/#a7cccc2150d9|title=AdobeVoice: Why Personalization Is Key To The Future Of Marketing|last=Adobe|website=Forbes|access-date=2016-05-02}}</ref>
Beginning in the early 1990s, [[web developer]]s began tracking [[HTML]] calls that their websites were receiving from online visitors. In 2012, the Web Analytics Association (WAA) officially changed its name to the Digital Analytics Association (DAA)
== Technology ==
Personalized marketing is dependent on many different types of technology for [[data collection]], [[Data classification (business intelligence)|data classification]], [[data analysis]], [[data transfer]], and data [[scalability]]. Technology enables [[marketing]] professionals to collect first-party data such as gender, age group, location, and income and connect them with third-party data
{{anchor|DMP}}'''Data Management Platforms''': A data management platform (DMP) is a centralized computing system for collecting, integrating and managing large sets of [[Structured data|structured]] and [[unstructured data]] from disparate sources. Personalized marketing enabled by DMPs, is sold to advertisers with the goal of having consumers receive relevant, timely, engaging, and personalized messaging and [[Advertising|advertisements]] that resonate with their unique needs and wants.<ref>{{Cite news|url=http://www.stateofdigitalpublishing.com/opinion/what-is-dmp-data-management-platform/|title=What is a Data Management Platform, or DMP?|date=2016-11-20|work=State of Digital Publishing|access-date=2017-11-30|language=en-US}}</ref> Growing number of DMP software options are available including [[Adobe Systems]] Audience Manager and Core Audience ([[Adobe Marketing Cloud|Marketing Cloud]]) to [[Oracle Corporation|Oracle]]-acquired [[BlueKai]], [[Sitecore]] Experience Platform and X+1<ref>{{cite web|url=http://blogs.gartner.com/martin-kihn/data-management-platform/|title=What Does a Data Management Platform Do, Anyway? - Martin Kihn|date=2015-01-07|website=Martin Kihn|language=en-US|access-date=2016-05-02}}</ref>
'''Customer Relationship Management Platforms''': Customer relationship management (CRM) is used by companies to manage and analyze customer interactions and data throughout the customer lifecycle to improve business relationships with customers, assist in [[customer retention]] and drive sales growth. CRM systems are designed to compile information on customers across different channels (points of contact between the customer and the company) which could include the company's [[website]], [[
'''Beacon Technology''': Beacon technology works on [[Bluetooth low energy|Bluetooth low energy (BLE)]] which is used by a low frequency chip that is found in devices like mobile phones. These chips communicate with multiple Beacon devices to form a network and are used by marketers to better personalize the messaging and mobile ads based on the customer's proximity to their retail outlet.
▲'''Customer Relationship Management Platforms''': Customer relationship management (CRM) is used by companies to manage and analyze customer interactions and data throughout the customer lifecycle to improve business relationships with customers, assist in customer retention and drive sales growth. CRM systems are designed to compile information on customers across different channels (points of contact between the customer and the company) which could include the company's [[website]], [[LiveChat]], [[Advertising mail|direct mail]], marketing materials and social media. CRM systems can also give customer-facing staff detailed information on customers' personal information, purchase history, buying preferences and concerns.<ref>{{cite web|url=http://searchcrm.techtarget.com/definition/CRM|title=What is customer relationship management (CRM) ? - Definition from WhatIs.com|website=SearchCRM|language=en-US|access-date=2016-04-20}}</ref> Most popular enterprise CRM applications are [[Salesforce.com]], [[Microsoft Dynamics CRM]], [[NetSuite]], and Oracle Eloqua.
▲'''Beacon Technology''': Beacon technology works on [[Bluetooth low energy|Bluetooth low energy (BLE)]] which is used by a low frequency chip that is found in devices like mobile phones. These chips communicate with multiple Beacon devices to form a network and are used by marketers to better personalize the messaging and mobile ads based on the customer's proximity to their retail outlet.<ref>{{cite web|url=https://www.forbes.com/sites/homaycotte/2015/09/01/beacon-technology-the-what-who-how-why-and-where/#f58c5f64fc19|title=Beacon Technology: The Where, What, Who, How and Why|last=Maycotte|first=H.O.|website=Forbes|access-date=2016-05-03}}</ref>
== Strategies ==
One-to-one marketing<ref>{{Cite web|title=What is one-to-one marketing? How it can help your business|url=https://www.vedia.ai/blog/one-to-one-marketing-definition/|date=2019-07-02|website=Dynamic Video and Video Automation {{!}} Vedia|language=en-US|access-date=2020-05-08}}</ref> refers to marketing strategies applied directly to a specific consumer. Having
#'''Identify''': In this stage, the major concern is to get to know the customers of a company, to collect reliable data about their preferences and how their needs can best be satisfied.
#'''Differentiate''': To
#'''Interact''': In this phase,
#'''Customize''':
== Costs and Benefits ==
Personalized marketing is used by businesses to engage in [[personalized pricing]] which is a form of price discrimination. Personalized marketing is being adopted in one form or another by many different companies because of the benefits it brings for both the businesses and their customers.
===Businesses===
Before the [[Internet]], it was difficult for businesses to measure the success of their [[marketing campaign]]s. A campaign would be launched, and even if there was a change in revenue, it was nearly impossible to determine what impact the campaign had on the change. Personalized marketing allows businesses to learn more about customers based on [[demographic]], contextual, and [[behavioral]] data. This behavioral data, as well as being able to track consumers’ habits, allows firms to better determine what [[advertising campaign]]
Some personalized marketing can also be automated, increasing the efficiency of a business's marketing strategy. For example, an automated [[Email marketing|email]] could be sent to a user shortly after an order is placed, giving suggestions for similar items or accessories that may help the customer better use the product he or she ordered, or a [[mobile app]] could send a notification about relevant deals to a customer when he or she is close to a store.<ref>{{cite web|url=https://offers.adobe.com/content/dam/offer-manager/en/na/marketing/Analytics%20PDF%27s/2015/188301_ddm_knowledge_is_power_ue.pdf|title=Knowledge is Power - Data-driven Marketing Success is Built on Accountability
===Customers===
Consumers face an [[Overchoice|overwhelming variety]] and volume of products and services available to purchase. A single retail website can offer thousands of different products, and few have the time or are willing to make the effort to browse through everything retailers have to offer. At the same time, customers expect ease and convenience in their shopping experience. In a recent survey, 74% of consumers said they get frustrated when websites have content, offers, ads, and promotions that have nothing to do with them. Many even expressed that they would leave a site if the marketing on the site was the opposite of their tastes, such as prompts to donate to a political party they dislike, or ads for a dating service when the visitor to the site is married. In addition, the top two reasons customers unsubscribe from marketing [[Electronic mailing list|emailing lists]] are 1) they receive too many emails and 2) the content of the emails is not relevant to them.<ref>{{cite web|url=http://janrain.com/about/newsroom/press-releases/online-consumers-fed-up-with-irrelevant-content-on-favorite-websites-according-to-janrain-study/|title=Online Consumers Fed Up with Irrelevant Content on Favorite Websites, According to Janrain Study {{!}} Janrain|website=Janrain|language=en-US|access-date=2016-04-20}}</ref>
Personalized marketing helps to bridge the gap between the vastness of what is available and the needs of customers for streamlined shopping experience. By providing a customized experience for customers, frustrations of purchase choices may be avoided. Customers may more quickly find what they are looking for and avoid wasting time scrolling through irrelevant content and products. Consumers have come to expect this sort of user experience that caters to their interests, and companies that have created ultra-customized digital experiences, such as [[Amazon.com|Amazon]]<ref>{{Cite web|title=Real-time personalization and recommendation {{!}} Amazon Personalize {{!}} AWS|url=https://aws.amazon.com/personalize/|access-date=2021-03-13|website=Amazon Web Services, Inc.|language=en-US}}</ref> and [[Netflix]].<ref>{{
== Future of Personalized Marketing ==
Personalized marketing is gaining headway and has become a point of popular interest with the emergence of relevant and supportive technologies like DMP, [[geotargeting]], and various forms of social media. Now, many people believe it is the inevitable baseline for the future of marketing strategy and for future business success in competitive markets.
'''Adapt to technology:''' For personalized marketing to work the way advocates say it will, companies are going to have to adapt to relevant technologies. They will have to get in touch with the new and popular forms of social media, data-gathering platforms, and other technologies that not all current employees and businesses may be familiar with or can afford. Companies that have been able to afford it, have employed [[machine learning]], [[big data]] and [[Artificial intelligence|AI]] that make [[personalization]] automatic.<ref>{{Cite web|date=2020-11-05|title=How to use AI to solve FMCG business problems using a recommendation for a Shopping List as a use case|url=http://civalue.levit.dev/blog/omnichannel-personalization/how-to-use-ai-to-solve-fmcg-business-problems/|access-date=2021-04-26|website=ciValue|language=en-US}}</ref>
'''Restructuring current business models:''' Adopting a new marketing system tailored to the most relevant technologies will take time and resources to implement. Organized planning, communication and restructuring within businesses will be required to successfully implement personalized marketing. Some companies will have to accept that their current business and marketing models will change radically, and probably often. They will have to reconsider the ways customer data and information circulate within the company and possibly beyond. Company databases will be flooded with expansive personal information – individual's geographic location, potential buyers’ past purchases, etc., and there may be complications regarding how that information is gathered, circulated internally and externally, and used to increase profits.<ref>{{cite web|url=http://www.mckinsey.com/industries/high-tech/our-insights/the-internet-of-things|title=The Internet of Things|website=McKinsey & Company|access-date=2016-04-20}}</ref>
'''Legal liabilities:''' To address concerns about sensitive information being gathered and utilized without obvious consumer consent, liabilities and legalities have to be set and enforced. [[Privacy]] is always an issue, in some countries more than others, so companies have to manage any legal hurdles before personalized marketing can be adopted.{{cn|date=March 2024}} Specifically, the [[European Union|EU]] has passed rigid regulation, known as [[General Data Protection Regulation|GDPR]], that limits what kind of data marketers can collect on their users, and provide ways in which consumers can suit companies for violation of their privacy. In the US, [[California]] has followed suit and passed the [[Online Privacy Protection Act|CCPA]] in 2018.<ref>{{
== Controversies ==
Many people are concerned that companies are using too much personal information<ref>{{Cite web|title=Personalized Marketing Faces New Consumer Privacy Concerns|url=https://www.cpomagazine.com/news/personalized-marketing-faces-new-consumer-privacy-concerns/|date=2019-11-04|website=CPO Magazine|language=en-US|access-date=2020-05-08}}</ref> to create the personalized marketing used today by businesses.
===Use of algorithms===
Data is being generated by [[algorithm]]s, and the algorithms associate preferences with the user's [[browsing history]] or [[personal profile]]s. Rather than discovering new facts or perspectives when one searches for news, information, or products, one will be presented with similar or adjoining concepts ("[[filter bubble]]"). Some consider this exploitation of existing ideas rather than discovery of new ones.<ref>{{cite web|url=https://contently.com/strategist/2016/01/25/infographic-the-problem-with-personalized-marketing/|title=Infographic: The Problem With Personalized Marketing — The Content Strategist|website=The Content Strategist|date=25 January 2016 |language=en-US|access-date=2016-04-20}}</ref> Presenting someone with only personalized content may also exclude other, unrelated news or information that might in fact be useful to the user.{{citation needed|date=October 2018}}
Algorithms may also be manipulated. In February 2015, [[Coca-Cola]] ran into trouble over an automated, algorithm-generated bot created for advertising purposes. [[Gawker]]’s editorial labs director, Adam Pash, created a [[Twitter]] bot @MeinCoke and set it up to tweet lines from ''[[Mein Kampf]]'' and then link to them with Coca-Cola’s campaign #MakeItHappy. The result was that for two hours, Coca-Cola’s Twitter feed was broadcasting big chunks of [[Adolf Hitler]]’s text.<ref>{{Cite news|url=https://www.theguardian.com/business/2015/feb/05/coca-cola-makeithappy-gakwer-mein-coke-hitler|title=Coca-Cola pulls Twitter campaign after it was tricked into quoting Mein Kampf|last=Woolf|first=Nicky|date=2015-02-05|newspaper=The Guardian|language=en-GB|issn=0261-3077|access-date=2016-04-20}}</ref> In November 2014, the [[New England Patriots]] were forced to apologize after an automatic, algorithm-generated bot was tricked into tweeting a racial slur from the official team account.<ref>{{cite web|url=http://www.adweek.com/news/technology/new-england-patriots-accidentally-tweet-out-racial-slur-161424|title=New England Patriots Accidentally Tweet Out a Racial Slur|website=AdWeek|date=November 14, 2014 |access-date=2016-04-20}}</ref>
== Internet marketing ==
Personalized marketing had been most practical in interactive media such as the internet. A web site can track a customer's interests and make suggestions for the future. Many sites help customers make choices by organizing information and prioritizing it based on the individual's liking. In some cases, the product itself can be customized using a [[configuration system]].
The business movement during Web 1.0 leveraged database technology for targeting products, ads, and services to specific users with particular profile attributes.
Personalization is the term that later followed as a way of describing this evolution in Internet marketing.
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== Other marketing ==
More recently, personalized marketing, also known as Individual marketing, has become practical for bricks and mortar retailers.
Don Peppers and Martha Rogers, in their book on the subject, ''The One to One Future'',<ref>{{cite book|title=The One to One Future: Building Relationships One Customer at a Time|last=Peppers|first=Don and Martha Rogers, Ph.D.|publisher=Doubleday Business|year=1993|isbn=978-0-385-42528-5|url-access=registration|url=https://archive.org/details/onetoonefuturebu00pepp}}</ref> speak of managing customers rather than products, differentiating customers not just products, measuring share of customer not share of market, and developing [[economies of scope]] rather than [[economies of scale]]. They also describe personalized marketing as a four phase process: identifying potential customers; determining their needs and their lifetime value to the company; interacting with customers so as to learn about them; and customizing products, services, and communications to individual customers.
Some commentators (including Peppers and Rogers) use the term "one-to-one marketing" which has been misunderstood by some. Seldom is there just one individual on either side of the transaction. Buyer decision processes often involve several people, as do the marketer's efforts.
== Difficulties ==
[[McKinsey & Company|McKinsey]] identified 4 problems that prevent companies from implementing large scale personalizations:<ref>[https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/personalization-at-scale-first-steps]</ref>
* Companies are storing and collecting data - but are not able to sync and analyze the right data together at the right time.
* Many marketers are looking for events and are not thinking about [[Behavioral targeting|triggers]] - This means that marketers are looking for external motives for personalization, such as holidays, while personalized marketing works best when it is based on triggers - i.e. customers' own behavior.
* Hierarchal companies - personalization marketing works best in agile companies, companies where there's a lot of cross-department collaboration. But most companies are used to hierarchal, strict structures that prevents data sharing across companies.
* Not using adequate technology - the wrong technological solution has been implemented.
== See also ==
{{div col}}
* [[Behavioral targeting]]
* [[California Privacy Rights|CCPA]]
* [[Configurator]]
* [[Datafication]]
* [[Digital marketing]]
* [[General Data Protection Regulation|GDPR]]
* [[Hypertargeting]]
* [[Internet manipulation]]▼
* [[Internet marketing]]
* [[Mass customization]]
* [[Recommender system]]▼
* [[Management information system]]
* [[
* [[Real-time bidding]]
* [[Real-time data]]
▲* [[Recommender system]]
* [[Relationship marketing]]
* [[
* [[
* [[Targeted advertising]]▼
* [[Variable data printing]]▼
* [[Variable pricing]]
{{div col end}}
▲* [[Variable data printing]]
▲* [[Real-time marketing|Real-time Marketing]]
▲* [[Targeted advertising]]
▲* [[Internet manipulation]]
== References ==
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[[Category:Market segmentation]]
[[Category:Mass media monitoring]]
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