A World of Uncertainty
We live in a world of constant disruption. The US Army War College adopted the acronym VUCA – Volatile, Uncertain, Complex and Ambiguous – to describe a world where outcomes are hard to predict. First used in 1985 by economists Warren Bennis and Burt Nanus, the word has since been adopted by businesses and organisations as a framework for developing insight and foresight to create resilience and adaptability against failure.
Volatile, uncertain, complex and ambiguous is a state of affairs modern-day marketing managers will be very familiar with. From the dramatic rise in e-commerce to influencer networks, AI, shrinking budgets, recruiting – not to mention retaining – talent, marketing managers are facing many challenges in 2022 and beyond. As if all those things were not enough, the battle for attention has never been greater.
Technology was supposed to make marketing easier. Building out the marketing technology stack through internal data management, CMS, CRM, SEM, website, and social media analytics, etc., allows marketing teams to measure the impact of their activities in ways never before dreamed possible. Data allows people’s behaviour to be tracked, enabling the hyper-segmentation of customers to provide a highly personalised journey. This has taken us beyond a world of hit and hope.
However, technology is changing so fast that keeping up is just one more challenge facing marketers. Furthermore, it seems the data marketers have become so reliant on to design clever digital campaigns targeting the ideal customer may not be quite as useful as it seems.
How the Surveillance Economy Came to Pass
Before we explore why that might be, let’s first take a look at how the surveillance economy marketers rely on came to be. According to the work of the author and Harvard professor, Shoshana Zuboff, it happened almost by accident. In her book ‘The Age of Surveillance Capitalism, she describes how, in 1999, Google was a start-up search engine that used customer data to improve the service. Ad-funding was frowned upon, but the business had no reliable model for generating investor returns.
In 2000, when the dot-com bubble began to burst, Silicon Valley venture capitalists became very impatient. With Google’s very survival apparently at stake, the early antipathy to advertising was set aside, and the tiny AdWords team was told to find a way of making money.
It turned out that the user behaviour data generated as a by-product of search had so much predictive power that it could not only improve the service but also provide a roadmap to advertising’s holy grail: targeted messaging at particular individuals.
Google was now in the auction business: selling behavioural data to the highest bidder. A new business model had been born, paving the way for new companies like Facebook to make a profit. This new paradigm had a voracious appetite for data, which provided the fuel for reading consumers’ minds and matching ads to their interests.
From Art to Science
In the 19th century, U-S retail magnate John Wanamaker famously once said, “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
In modern times, however, advertising has been transformed from art to science. Through website technology, marketing automation, and social media, today’s marketers are able to identify targets down to an individual level, personalise and customise messages, close a sale and delight customers.
But, as we wonder at the marvels of digital technology, what if this brave new world isn’t quite what it seems? What if there are new reasons why Wanamaker’s quote holds to this day?
Instant measurements have given marketers hard data to assuage ROI obsessed CFOs and CEOs. But brands’ obsession with short-term data has led to fraud on a massive scale. Ten years ago, it was estimated that 50-percent of online impressions were not actually exposed to a potential customer, partly due to non-human traffic, or bots.
The situation is getting worse. According to more recent industry reporting, automated and invalid traffic now accounts for nearly half of all internet traffic globally, while ad fraud continues to cost advertisers billions annually through invalid impressions, clicks and non-human activity across digital channels. Mobile and programmatic advertising remain particularly exposed, reinforcing the need for stronger verification and measurement practices.
Fraud is a lucrative business. More recent cybersecurity and fraud research estimates that digital fraud and cyber-enabled criminal activity generate hundreds of billions of US dollars globally each year, with organised fraud operations capable of generating millions of dollars in monthly revenue through ad fraud, bot traffic and other automated schemes.
How Accurate is Programmatic Targeting?
Leaving aside the propensity for fraudulent traffic, it seems programmatic targeting is not as accurate as marketers would hope.
If a user visits a football website and one selling beard oil, it might seem prudent to deduce that the person was male. However, more recent academic and industry research suggests that demographic targeting alone remains an unreliable predictor of individual behaviour. Studies show that relying on a single attribute, such as gender, often performs only marginally better than chance, while adding multiple demographic filters can reduce audience reach and limit campaign effectiveness. Increasing restrictions can also raise advertising costs without guaranteeing stronger outcomes.
This is partly to do with fraud – bots are very clever at visiting sites that fool advertisers into thinking they are a target. However, it is also partly because these parameters are deduced from data that is not given with the users’ consent, or even knowledge.
The Regulation of Data Consent
The accumulation of data without consent has not gone unnoticed by governments and regulators. The European Union’s General Data Protection Regulation (GDPR), which came into force in 2018, continues to shape global privacy standards. GDPR governs the way businesses can collect, use, process and store personal information, and has influenced similar privacy legislation in jurisdictions around the world.
Already, there have been some huge fines imposed for breaches of this law. The largest GDPR fine to date remains the €1.2 billion fine imposed on Meta in Ireland in 2023. Other significant penalties include Amazon’s €746 million fine in Luxembourg, WhatsApp’s €225 million fine in Ireland, and Google’s €150 million fine in France for data and consent-related breaches.
Even more disturbing for marketers is the news that both France and Austria have found Google Analytics in breach of GDPR. Similar investigations are taking place in 30 other countries.
The Demise of Cookies
The culprit behind the ability to monitor behaviour is cookies – small files that websites send to a device, which allow them to monitor activity. These are called first-party cookies. Then there are third-party cookies placed by advertisers so they can see what you’re interested in and follow you around the internet. It is this second category where the landscape is also shifting for marketers.
In June 2021, Google announced that it would phase out third-party cookies on its Chrome browser. The timeline has since been pushed back until late 2023, but this is only delaying the inevitable. For brands, this means it will be harder to learn what people are doing online when they’re not on your website. That, in turn, makes it harder to collect data that allows ads to be targeted.
App Tracking Transparency
The decline of cookies is not the only way it is becoming more difficult to track customers. The average app has six trackers that collect data, which can be sold online. Apple’s new App Tracking Transparency feature requires the user’s permission to do this.
This is damaging for the likes of Facebook and its partners. Without permission, it becomes more difficult to track whether a user saw an ad on Instagram, searched for the company on Google, and used the website to buy a product. Meta previously estimated that Apple’s App Tracking Transparency changes could reduce advertising revenue by approximately US$10 billion in a single year. The company also argued that these changes would disproportionately affect small businesses that rely on digital advertising to grow and that are more dependent than larger companies on personalised advertising.
Extraordinary Audience Engagement
These are choppy waters to navigate for marketers with little time to keep abreast of new regulations and new technologies designed to make it harder to find their target audience. Moving forward, many brands will keep doing what they’ve been doing, with dubious results or potential exposure to fines. Those that adapt quickly will leave their inactive competitors with a problem.
So, in a world where you need permission to serve content, how do you build trust and give people something they value?
Successful brands will be the ones who serve up useful, amusing, authentic, inspirational, transformational, or beautiful moments that matter, in context and on an ongoing basis.
Here at Hub, a premium creative marketing agency in London, we believe good content is the fuel that drives any marketing campaign. Like a finely tuned racing car, getting the right fuel mix is the key to effectiveness. We advocate a model we call ‘Extraordinary Audience Engagement’.
This involves:
- Identifying your own customer data
- Building your own digital ecosystem
- And serving appropriate content at each stage of the decision-making process
We do live in a world of constant disruption: Volatile, Uncertain, Complex and Ambiguous. But by gaining an understanding of the changing landscape and getting ahead of the curve, you have an opportunity. An opportunity to give yourself a significant competitive advantage through extraordinary audience engagement.
To find out more about creating extraordinary audience engagement, read these related articles on Long-Term vs Short-Term Brand Building and Nurturing Audiences Through the Marketing Funnel.
