What’s the worst idea in the marketing industry?
Everybody has their own answer to that question. For some, it’s brand purpose. For others, it’s short-termism. For us, the answer is clear: personalisation.
You can’t go more than five seconds at a marketing conference without hearing about the promise of “one-to-one personalisation at scale”. Personalisation continues to be one of the biggest trends in the marketing industry. In 2019, it was named ‘word of the year’.
Proponents believe we are entering a new era in marketing, where every creative message will be tailored to the specific needs of individual buyers. This extreme form of segmentation will deliver greater “relevancy”, which will translate into more sales for businesses.
There’s just one little problem with personalisation: it doesn’t make any sense. We believe the case against personalisation is significantly stronger than the case for it.
The case against personalisation can be reduced to two simple words:
Couldn’t: The difficulties of personalisation
The biggest problem with personalisation is that it’s impossible.
Personalisation assumes that marketers have perfect data on every individual customer.
Most personalisation efforts are powered by third-party data. Marketers infer who customers are based on their browsing behavior. So how good is that third-party data? It must be extremely good, if you’re claiming to understand buyers on a “personal level”.
Spoiler alert: it’s not. Most third-party data is, to put it politely, garbage.
In an academic study from MIT and Melbourne Business School, researchers decided to test the accuracy of third-party marketing data. So, how accurate is gender targeting? It’s accurate 42.3% of the time. How accurate is age targeting? It’s accurate between 4% and 44% of the time. And those are the numbers for the leading global data brokers.
Recently, Professor Nico Neumann partnered with the brilliant marketing team at HP to replicate this research for B2B. The results were unsurprising – but horrifying. Many enterprise technology companies spend millions of dollars ‘hyper-targeting’ IT decision makers (ITDMs) using third-party data. But if we get gender wrong more often than 50% of the time, what percentage of ITDMs do you think are actually ITDMs, according to the research?
Do you want to guess? It’s 14.3%. And for ‘senior ITDMs’, that number drops to 7.5%.
Super impressive! That’s about as precise as… a drunk monkey throwing darts?
Arguably, there has never been a successful piece of personalised creative in human history.
Huge kudos to John Marshall and Ian Mundorff at HP, who deserve an award for calling the industry’s bluff, applying some scepticism to the ‘data’, and saving their business massive amounts of money.
“The learnings from our B2B research had an immediate impact on our approach to targeting ITDMs,” according to Marshall, HP’s head of global media investment and innovation at HP.
“We determined there was simply too much waste in the old model of activating this third-party cookie-based data across high-reach, low-impact placements. We decided to pivot to more contextually relevant and attentive channels, while working with partners who had permissioned, first-party relationships with ITDMs.”
The high priests of personalisation believe all this is just a temporary inconvenience. Eventually we will have a perfect understanding of the customer by tying together every data set on earth. But between GDPR, Apple wiping cookies every two weeks, and Google deprecating the cookie altogether, it’s hard to believe this story ends with a unified view of all customer behaviour.
We don’t think this story ends with better third-party data. We think it ends with no third-party data.
Wouldn’t: The ineffectiveness of personalisation
But let’s finish with the most fatal flaw in the logic of personalisation. Even if it was actually possible, it still wouldn’t work. Even if we knew everything about the customer, we still wouldn’t be able to design creative tailored to their individual tastes.
Here, we find it instructive to study Disney, a company that knows a thing or two about monetising creativity. Is Disney making personalised creative? Are movies like Wall-E designed to resonate with eight-year-old boys in San Diego?
No. Movies like Wall-E are designed to resonate with all children in all countries. And not just kids, but grown-ups, too. Disney only invests in creative that works across all segments – angsty superheroes, lost animals, magical princesses.
Arguably, there has never been a successful piece of personalised creative in human history. The biggest movies, books, songs and ads all speak to universal experiences that resonate with everyone, everywhere. Disney is one of the most profitable studios in Hollywood history, precisely because it invests in creative impersonalisation (at scale!).
Marketers would be much better off investing in ‘performance branding’; in other words, one-size-fits-most creative that speaks to the common category needs of all potential buyers, all the time. This is a much simpler approach that also happens to be supported by the evidence. Reach is, and has always been, the greatest predictor of marketing success.
Simply put, personalisation at scale is an oxymoron. Personalisation is an unscalable tactic that massively increases creative and media costs, which nullifies any so-called efficiencies.
There is no real evidence that marketing personalisation works at all. There are just a bunch of flimsy ‘experiments’ from personalisation companies, who are ‘talking their book’ at your expense. Can you name a single famous brand built through personalisation?
Didn’t think so…
A return to the era of impersonalisation
So let’s recap the case against personalisation:
- You can’t personalise, because third-party data is extremely unreliable.
- And wouldn’t personalise, even if you could, because marketing works by reaching everybody with the same message to create shared associations.
The era of personalisation will never arrive. In fact, Gartner predicts 80% of marketers will abandon personalisation by 2025. Personally, we hope it doesn’t take that long.
Instead, let’s embrace impersonalisation – the path to simplicity, scale and success.
Peter Weinberg and Jon Lombardo are the heads of research & development at the B2B Institute, a think tank at LinkedIn that studies the laws of growth in B2B. You can follow Peter and Jon on LinkedIn.