Brands try to offer consumers personalization without interfering with privacy

The news: Consumers want personalized ad experiences, but not at the cost of their privacy, according to Twilio’s recent State of Personalization report.

By the numbers: Consumers said personalization is important in determining whether they’ll make repeat purchases with a brand or service, but the other side of the coin creates a conundrum for marketers.

• 49% of consumers said they would likely become repeat buyers if offered a personalized experience by a retail brand.
• Another 62% said they not only want, but expect personalization, and that a brand that doesn’t offer a personal experience could lose their business. That’s up from 45% in 2021, showing personalization is becoming a key competitive advantage for brands.
• 80% of business leaders say customers spend 34% more (on average) when offered personalized shopping experiences.

Closing the gap: While the demand for personalization is clear, the study showed brands are woefully ill-equipped to meet it.

• Only 35% of companies said they felt they achieved omnichannel personalization.
• 47% of companies offer personalized experiences based on live consumer data, meaning over half are missing out on a significant aspect of personalization.

Potential solutions: It may seem like an easy win to personalize a shopping or advertising experience, but the current state of policies, regulation, and consumer sentiment around privacy make personalization a huge challenge for advertisers.

• Facing a sea of changes at the hands of Google and Apple, many brands are building their own systems for gathering first-party data. Thirty-seven percent of brands exclusively use first-party data in personalization, up from 31% last year, according to Twilio.
• One marketing channel offers personalized experiences without intrusive data collection: email. Email marketing has proved relatively resistant to rising trends like data privacy changes and consumers’ distaste for social media and digital ads.
• A recent report from CheetahDigital found that 55% of consumers are more comfortable giving brands personal information if it’s at their discretion and used to their benefit.
• That same report found that email marketing’s ability to drive sales exceeded social and display advertising, which consumers largely distrust, by 105%.

Analyst insight: “Consumers don’t consider the challenges to well-executed personalization; they simply expect relevant content delivered at the right time and place,” said principal analyst Dave Frankland, author of our recent Spotlight on personalization.

The big takeaway: For brands stumbling to adjust their marketing strategies in a rapidly changing landscape, the road ahead may not be so painful.

• Email marketing and loyalty programs, among others, offer ways to build relationships with consumers while avoiding the data collection that they explicitly don’t want.
• The current ad environment also offers an opportunity for brands to begin fleshing out their own ad systems, either via partnerships like those struck by Michaels and others, or by developing the technology themselves.

Go further: Register for next week’s webinar, ​​CMO-Level Insights to Elevate Your Personalization Strategy.