Are digital marketers at a crossroads moment?

They are awash in customer data — from everything from social to search, from web traffic to Internet of Things-enabled wearables.

But they don't quite know what to do with it all. Meanwhile, what they are doing with all their data could cause a consumer revolt before they figure it out.

Putting Things in Context

Just consider the growing ruckus surrounding digital advertising and ad blockers. Luckily, digital marketers appear to have a path toward success: "contextual marketing."

Forgive for the quotation marks around contextual marketing.

Even in a new report about the topic published by the Economist Intelligence Unit (EIU) and sponsored by SAP (short title: Beyond Personalisation), the authors admit that it is "a term whose meaning is still being refined."

Then again, it doesn't appear to be just jargon dreamed up by consultants and reporters.

At its essence, it is something very relevant to practitioners: being able to target individual consumers — and better sell to them — with relevant and engaging marketing because you are able to take existing data and pair them with information about the consumers’ immediate situation in a point in time.

Next Stop on a Long Road

In that way, contextual marketing is not a revolutionary tangent.

It is simply the next destination on the road that most marketers have been traveling from segmentation to personalization and beyond.

Much of the data for it, too, doesn't necessarily need to come from IoT or other wait-and-see technologies; some of the best contextual data is available now from search engines, writes the EIU team.

Some would argue it's a much needed destination. As the uproar over online advertising and ad blockers has shown, current digital modes of marketing are ineffective, if not counterproductive.

The EIU report cites a very, very low figure for the percentage of Internet users who click on banner ads: less than 0.5 percent.

A New Way of Thinking?

On the other hand, the further marketers go down this contextual path, the more they may need to rethink how they practice their craft. For instance, the EIU authors contend, marketing messages may no longer work best by eliciting an emotional reaction.

What could be needed in a contextual piece of content or advertising is "timely and valuable information."

“Ad agencies have always thought about what to say, not when to say it,” is how Dietmar Dahmen, a former creative director of advertising agencies and now independent adviser and chief innovation officer digital agency exc.io, explains it in the EIU report.

“They thought about the right message — the unique selling proposition — often for months. They gave less thought to the right circumstances, the right place and the right time. They did not consider the individual selling proposition.”

That individual selling proposition, the story to wrap it in and the tone to use, can all be predicted with an algorithm at this point, Dahmen adds.

The data are already out there? Algorithms can do the work? This sounds easy peasy, right?

Not so fast.

One marketing agency exec interviewed for the EIU report, Alberto Alvarez-Morphy, estimates that fewer than 10 percent of organizations "can sense even the most basic types of context about their customers."

Reasons for inability can be that companies haven't even started down the road to segmentation, let alone context. Or that, if they are trying to apply contextual data, they are failing to interpret it fully or respond to it quickly or appropriately.

Skeptics and Naysayers

There is also the little matter of ... does it work?

"In spite of the persuasive data that social media platforms like Facebook can produce, there is little hard evidence that consumers want personalized ad targeting in their/our digital experience," Chris Hackley, professor of marketing at the Royal Holloway University of London, told us.

What's more, "In social scientific language, digital behavioral data have limited ethnographic integrity, and lack the fine detail of social context that is key to marketing," continues Hackley, who authored the book called Marketing In Context in 2013.

Perhaps the major impediment to contextual marketing is the problem of privacy. The moment that marketers appear to be violating consumers' trust or become annoying and intrusive — see: ad blockers, again — is the moment consumers tune out a brand completely.

This privacy issue appears to be on a collision course with brands' desire for increasing accountability and measurement for marketing.

"There is a momentum for getting more intrusive consumer data — this is driven by clients as much as by marketers," said Hackley, who is not confident that marketers will be able to navigate the risk of privacy without effective regulation.

It should be interesting to see if marketers make the right turn at the crossroads before this collision occurs.

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Title image by Taylor Swayze

beyond personalization infographic