Grabbing the Holy Grail of Marketing: 1-to-1 Personalization With First- and Zero-Party Data
Five years ago, McKinsey published an article calling ad personalization at scale the “holy grail” of digital marketing for consumer product brands. In those lower customer acquisition cost (CAC) and spray-and-pray Facebook ad strategy days, it was only feasible for marketers at the largest brands to properly implement McKinsey’s recommendations.
But that was five years ago. The e-commerce data world has changed.
SMBs can now implement marketing tactics that were once the province of the billion dollar club, and they can take steps to approach one-to-one personalization on Facebook and other marketing channels. In the current CAC climate, doing so isn't just interesting to test, but necessary for growth.
The good news: you can start today by pushing your first- and zero-party data into Facebook (if you need a refresher, I recently wrote an article explaining first- and zero-party data).
Once you start, you’ll reduce your reliance on third-party data, introduce more efficient marketing to fight high CAC, improve ad performance, and build better customer relationships from the outset by showing the right ads with the right messaging to the right consumers at the right time.
Locating the Grail
Start the journey by organizing your first- and zero-party data. Each will serve different functions on Facebook. Your first-party data will optimize ad targeting, and your zero-party data will sculpt the ads themselves through the content, creative and messaging.
Remember, the more data you have, the better your marketing will be. For example, your first-party data should include geographic information, RFM (recency, frequency, monetary) data, products purchased, returns, customer lifetime value (CLV), last order date, and more.
Next, you’ll push your data into Facebook. Upload CSVs from your e-commerce or BI platform, or use a tool to dynamically upload segments. Based on the data, create Facebook audiences (like email segments), then update the creative and messaging based on your zero-party data.
For example, create ad content combining customers’ responses, which is zero-party data, and their stage of the customer lifecycle (new or returning customers). Your messaging must meet them where they are with the type of content they’ve revealed their interest in. Once your ads are set, build your campaigns and track engagement.
In these campaigns, you won’t fully cede control over your ad targeting to Facebook’s third-party data. Rather, your data will be powering the algorithm. In addition, you’ll be honing in on specific audiences to bring the right messages to the right customers at exactly the right time.
Holding the Grail: The Power of Lifecycle Marketing on Facebook
With this owned-data ad strategy, you’re bringing a high level of segmentation, automation, and timing — typically only possible via email or SMS — to Facebook.
Now you’ve built upon McKinsey’s grail. Personalization isn’t only about the right message shown to the right customer based on general interest. I want to emphasize the unlock of meeting customers where they are in their lifecycle.
For example, there’s nothing worse than seeing ads to buy a product when you’re in the middle of returning it. With updated data, you can exclude customers from ads who are returning what they just purchased. This is one of countless potential optimizations. Let’s take these grail powers a couple of steps further.
First, use your first- and zero-party data to fuel new lookalike audiences. Now that Facebook can’t capture as much data on customers, you can enrich its algorithm with customer data to find new customers that match ideal profiles of current customers (e.g., based on value, subscription status, discount use).
Additionally, leverage new types of ads on Facebook. Traditionally, brands have geared 80 percent to 90 percent of their Facebook focus on prospecting ads. However, I recommend investing in ads centered around retention and nurturing your customer relationships to extend their CLV. This is crucial. Retention matters more now than ever.
With a brand-owned data flywheel and enterprise-style personalization strategies, you’ll have advantages acquiring and retaining customers. The wins not only cover short-term customer acquisition, but also mean that you’ll enjoy a flexible and safe data strategy that will shield you from future privacy battles among the tech titans.
Dan LeBlanc is CEO at Daasity, an e-commerce analytics and data company.
Related story: Understanding First- vs. Zero-Party Data and the Power of Owned Data
Daasity CEO and Co-Founder Dan LeBlanc is an analytics, customer experience, and business technology expert who is passionate about helping consumer brands achieve their goals through more informed insights. Before founding Daasity, he held senior executive roles with companies such as Provide Commerce, Encore Capital Group, and Groundswell Equity. In his spare time, you can find Dan outdoors enjoying the San Diego weather or visiting one of the city's many great craft breweries