How are DTC brands harnessing data and personalization?
Personalization is a highly discussed topic within digital advertising as it continues to evolve and become more widely utilized. It can involve various efforts of individualization but has become quite controversial in recent years due to the amount of user data it requires. Personalization can help Direct to Consumer (DTC) advertising efforts immensely; however, media and advertising big leagues Google and Apple have some pretty contrasting things to say about it, especially regarding privacy.
Google has been adamant that its usage of user data for personalized advertising and marketing efforts is here to stay. They’ve implemented new programs for users to have complete control of the ads they see through a “My Ad Center” program. They believe being transparent with consumers to the point of selection and determining what they see will pay off and deliver better results. Although using user data is helpful for DTC brands looking to yield ROI, personalization can be about establishing a strong consumer relationship with the brand instead of just focusing on which ads people want to see.
Tech giant Apple takes a different approach. They insist that users don’t want companies tracking them. They also claim users who are not tracked are targeted just as effectively conversion-wise. A recent study by Apple saw a 62.1% conversion rate for users who opted into personalized ads and a 62.5% conversion rate among consumers who have tailored ads blocked. They are even pushing developers to target users with personalized ads turned off, as they have a higher conversion rate.
Personalization helps DTC brands build closer connections with customers by better curating their products and messaging to a customer’s needs. This is especially imperative for DTC brands as opposed to standard CPG brands. But in regards to achieving success within your advertising campaigns, utilizing simple yet accurate data about your target market can help you stand out from the crowd and make your product the clear choice in a digital-first environment.
A Merkle report found that from 2020 to 2021, consumers became more comfortable, not less, sharing data with brands in exchange for a more personalized experience. But not all data is regarded the same; most consumers are willing to part with information such as gender and age, but internet users overwhelmingly prefer to hold onto some other data, including browsing behavior. DTC brands need simple yet accurate data to ensure everyone within their targeted audience receives relevant messaging, even if their ad personalization is off.