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{{short description|Marketing strategy using data analysis to deliver individualized messages and products}}▼
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{{original research|date=October 2018}}
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'''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 ==
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{{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]], [[Web_chat#Live_support_software|live support]], [[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 ==
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== Costs and Benefits ==
Personalized marketing is used by businesses to engage in [[personalized pricing]] which is a form of price discrimination.
===Businesses===
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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.
== Controversies ==
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===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]
* 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
* 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]]
* [[Management information system]]▼
* [[Personal branding]]
* [[Real-time bidding]]
* [[Real-time data]]
* [[Recommender system]]
▲* [[Management information 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]]
▲*[[General Data Protection Regulation|GDPR]]
▲*[[California Privacy Rights|CCPA]]
== References ==
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[[Category:Market segmentation]]
[[Category:Mass media monitoring]]
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