Tag Management Delivers Multichannel Personalization

Transcription

1 A Forrester Consulting Thought Leadership Paper Commissioned By Ensighten August 2014 Tag Management Delivers Multichannel Personalization

2 Table Of Contents Executive Summary... 1 Personalization Is Important In The Age Of The Customer... 2 Firms Strive For Cross-Channel Personalization To Sharpen Their Competitive Edge... 3 Marketers Grapple With Multichannel Approaches To Delighting Customers... 4 Tag Management Helps Marketers Understand And Engage Their Customers... 6 Key Recommendations: Synchronize Your Tag Management And Personalization Programs... 9 Appendix A: Methodology Appendix B: Demographics/Data Appendix C: Endnotes ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. 2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-N6JKNV]

3 1 Executive Summary Technology and processes for measuring and personalizing digital customer experiences have been around for a while, and some firms have mastered the practice of delighting customers within siloed channels at specific points in the customer life cycle. But today s digitally empowered customers have many ways of engaging with brands and no longer feel trapped within the marketing funnels of the past. To compete, firms must now personalize across multiple channels and across all parts of the customer life cycle. Yet many firms do not have the necessary capabilities in place to do so. Tag management technologies and approaches have recently emerged as ways of overcoming the obstacles associated with utilizing multiple digital technologies and data for multichannel personalization. extensive personalization across multiple channels using multiple techniques. Tag management supports cross-channel personalization. Digital marketers believe that tag management can help mature their personalization programs through its ability to manage the exchange of data between visitors and the multiple channels and personalization technologies that they interact with. To further investigate, in March 2014, Ensighten commissioned Forrester Consulting to evaluate how marketers view and use tag management technologies today to aid their personalization efforts. In conducting an online survey with 150 North American digital marketing decision-makers at large companies across select industries, Forrester found that these companies multichannel personalization efforts were boosted with the ability of tag management systems to act as a value-add data intermediary between digital customers and the multiple channels and personalization technologies. KEY FINDINGS Forrester s study yielded four key findings: Personalization is essential in the age of the customer. To compete in an age where the customers are empowered, firms must compete by delighting their customers with personalized engagements across the entirety of the customer life cycle and across all channels. Marketers need to personalize across multiple channels. Digital marketers are prioritizing social media (51%), websites (43%), and channels (35%) for personalization and are seeking to take a significant step into mobile personalization in Most firms apply some form of personalization, but cross-channel personalization is rare. While 77% of firms apply some form of personalization within digital channels, multichannel personalization is in its early stages of adoption, with only 13% of firms applying

4 2 Personalization Is Important In The Age Of The Customer During the first decade of the century, the number of ways customers can engage with their brand of choice has exploded (see Figure 1). 1 From engaging customers within stores, branches, or via call centers, firms have now built out multiple websites, landing pages, mobile sites, and apps, and they are now even engaging customers via thirdparty touchpoints such as social networks and comparison sites. never seen before. In fact, we find ourselves in the age of the customer, where it is the consumer who dictates the how and the when and the pace of the engagement. 2 Yes, in this age, customers are empowered and it is no longer sufficient to simply offer more ways of engaging with them. Firms must now stay competitive by delighting their customers through personalized engagements that are interwoven across multiple channels. The upshot is that many more opportunities now exist for firms to understand and influence their customers across the entire customer life cycle, from discovery and exploration to buying and engagement. The flip side is that customers are now not only able to readily engage with their favorite brands, but they are also able to easily switch between multiple brands with an ease FIGURE 1 Empowered Customer Across Multiple Touchpoints And The Entire Customer Life Cycle Discover Engage Explore Buy External digital touchpoints Branded digital touchpoints Web (search, comparison shopping, etc.) Social (social network, reviews, community, etc.) Digital content (video, editorial, etc.) Company website Mobile (apps, mobile Web) Tablet (apps, Web) In-store device (kiosk, associate device, etc.) Traditional touchpoints Call center Branch/store Source: Welcome To The Era Of Agile Commerce, Forrester Research, Inc., July 19, 2013

5 3 FIRMS WANT TO PERSONALIZE ENGAGEMENTS ACROSS MULTIPLE DIGITAL CHANNELS To understand how digital marketers are investing in personalization in 2014, Forrester asked survey respondents about which engagement channels they were prioritizing for personalization (see Figure 2). At least some respondents were seeking to personalize channels represented in all 13 categories, and it is clear that personalization is a multichannel challenge to be applied throughout the entire customer life cycle. However, as marketers are responding to the demands of the empowered customers, some channels are gaining more attention than others: Digital channels lead the charge. Social, web, and are the top three priorities for personalization in The fact is that when it comes to purchasing products or services, digital is the main resource of choice for customers needing help making decisions. Firms know this and are simply prioritizing personalization on channels that their empowered customers are prioritizing. FIGURE 2 Marketers Prioritize Digital Channels For Personalization In 2014 What are the top three customer engagement channels you seek to personalize? (Please rank your top three) Social media Websites Loyalty programs Point of sale Mobile site Mobile apps Display advertising 4% 10% 3% 13% 7% 16% 11% 6% 19% Call center 6% 5% 4% Affiliate 3% 4% programs 3% 3% 3% Chat 4% 1% CRM 6% 2% 1% 1% Search 5% Rank 1 Rank 2 Rank 3 7% 12% 16% 17% 13% 10% 10% 17% Overall 52% 43% 35% 31% 25% 22% 21% 19% 15% 11% 10% 9% 7% Mobile is gaining traction. Only 22% and 21% of marketers are personalizing on mobile websites and apps, respectively. While this places mobile in the middle of the personalization priority pack, it represents a startling investment at a time when the smartphone revolution is less than a decade old, and tablets have only recently become mainstream. Firms are personalizing mobile channels again in reaction to customers changing online behaviors and preferences. Firms Strive For Cross-Channel Personalization To Sharpen Their Competitive Edge The love that customers feel for a company in one moment of recognition can be torn away in the next when they are forgotten. This is precisely the behavior of firms when they do not share information across channels. 3 A classic example is when customers move between a corporate website and a mobile app. Who they are and what they were doing is totally forgotten and the customers start from scratch. For firms to hold the attention of their empowered customers, they must not only personalize engagements within channels, but they must recognize and personalize across multiple channels. We asked respondents how mature their digital cross-channel personalization efforts were and we found (see Figure 3): Most firms apply some form of personalization. Over three-quarters of firms apply at least some form of personalization to one or two touchpoints. Practices such as personalizing websites and s by targeting different experiences to different user segments has been long established, and single-channel personalization is now table stakes for digital marketers. The use of cross-channel personalization is rare. Only 13% of firms claimed to apply extensive personalization across multiple channels and teams using multiple techniques. The fact is that digital marketers wishing to engage their customers across all channels through cross-channel personalization have a way to go. The good news is that firms that are getting cross-channel personalization have a strategic competitive advantage in the age of the customer. Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014

6 4 FIGURE 3 Cross-Channel Personalization Has A Way To Go How mature is your digital cross-channel personalization effort? Please select the statement below that best describes your firm s current state. We apply extensive personalization across multiple channels and teams, applying multiple techniques Our personalization program is somewhat mature, using more than one technique applied to at least three digital channels 13% 25% Only 13% of firms apply extensive personalization across multiple channels. We apply some personalization, but we use only one technique and apply it to only a few channels 39% We do no online personalization at all 1 Don t know 5% 23% of firms either don t know or don t apply any personalization. Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014 Marketers Grapple With Multichannel Approaches To Delighting Customers The lack of maturity with cross-channel personalization is not surprising as marketers race to keep up with customers as they flit across the multitude of digital touchpoints that have recently mushroomed. However, delighting customers is made even more complicated by the proliferation of optimization and personalization techniques and technologies that have emerged in recent years. To better understand trends and techniques, we questioned survey respondents on the most effective optimization and personalization techniques currently being used. Their response informed us that: Optimizing mobile experiences is now mainstream. From a standing start of a few years ago, a third of respondents now consider mobile optimization techniques among their most effective tools for enhancing customer experience (see Figure 4). Vendors offering testing, targeting, recommendations, and performance monitoring platforms are making it easier to apply these techniques to mobile as they build out the relevant features, functions, application programming interfaces (APIs), and app software development kits (SDKs). Targeting based on visitor behaviors remains important. As a tried-and-tested technique, targeting based on visitor behavior is still a preferred method of optimizing personal experiences. Today s behavioral targeting techniques extend across the customer life cycle, from acquiring traffic with focused off-site advertising to converting visitors with tailored on-site experiences. Thirty-one percent and 26% of respondents chose rules-based and algorithmic-based targeting approaches, respectively. Testing's role in optimizing personalization is developing. Less than a fifth of respondents favored multivariate or A/B testing techniques. This is not surprising as, while there are good examples of online testing programs delivering significant business value by identifying winning experiences, the delivery experience to the customer is slowed as firms struggle to generate the variety of content needed and are constrained in delivery by legacy content management processes. Each of these optimization and personalization techniques has its own origins (e.g., ecommerce spawned recommendations engines and A/B testing came from digital marketing) and each brings its own strengths and limitations to bear when used to segment and track customers across multiple touchpoints. The result? Most cross-channel personalization programs are incomplete because of: Missed opportunities to track customers across channels. Firms are not using customer data collected within one channel to link to data within another (see Figure 5). In fact, less than 40% of respondents could link

7 5 the majority of their data to customer activity in other channels and the situation deteriorates with websites, point-of-sale systems, display advertising, etc. Delivering a relevant personalized experience to customers as they move from one touchpoint to the next is severely limited when you are unable to track them from one to the other. Incompatible segmentation from one channel to the next. Only 44% of respondents apply uniform segmentation across multiple touchpoints (see Figure 6). The large majority of firms are failing to recognize their customers in the same way when customers interact with them through different channels such as , websites, social media, and blogs. If firms don t have a uniform understanding of their customers, they cannot hope to personalize an experience in one channel that is relevant to an interaction they had in another. FIGURE 5 Firms Struggle To Link Customer Data Across Channels What proportion of the visitor data collected within the following channels can be linked to customer data collected via other channels? (Percentage of firms where proportion is 50% or more) 3 Websites 35% Point of sale 32% Display advertising 29% Loyalty programs 2 Search 27% Social media 27% Call center 24% CRM 23% Mobile site 22% Mobile apps 19% FIGURE 4 Multiple Techniques Deliver Personalization Which are the three most effective techniques you use to optimize and/or personalize your customer experience? (Select up to three) We use a recommendations engine 33% Mobile optimization 33% Rule-based behavioral targeting 31% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014 FIGURE 6 Affiliate programs 1 Chat 15% Cross-Channel Segmentation Is A Problem Which statement below best describes your customer segmentation tactics when analyzing customer data or using it to personalize customer experiences? Algorithm-based behavioral targeting 26% Multivariate testing 19% We do not optimize or personalize customer experiences A/B testing 16% Other 3% I don t know 6% 15% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014 We apply a uniform segmentation policy across all of the touch points We apply a uniform segmentation policy across some of the touch points We have a different segmentation policy for different touch-points across some of the touch points We have a different segmentation policy for different touch-points across all of the touch points We don t use segmentation 11% 19% 25% 30% I don t know 7% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014

8 6 Tag Management Helps Marketers Understand And Engage Their Customers Since JavaScript tagging became the de facto standard for deploying measurement and interaction technologies within digital clients (e.g., web browsers), these tags have needed to be managed in a scalable way that does not overwhelm organizations resources and processes. For years now, tag management has overcome this nightmare scenario and offered operational benefits. 4 Measurement and optimization technologies deployed by tags can now be managed outside of the development cycles, the time to deploy new tag-based technology has plummeted, and significant cost savings have resulted. But this was just the beginning. Marketers have started to realize that the real benefit of tag management is in its ability to enhance their understanding of, and interaction with online customers. To understand better this higher value utility of tag management, we asked digital marketers already using a tag management system (TMS) about the benefits garnered (see Figure 7): Personalization benefits are top of mind for marketers. Almost 60% of respondents feel that their tag management system improved website personalization. Digital visitors are better understood. About half of respondents believe that the quality of their analytics implementations were improved. Tag management helps integrate data across channels. Over 40% of TMS users are better able to integrate data across multiple online channels. TAG MANAGEMENT SUPPORTS DATA-DRIVEN CROSS-CHANNEL PERSONALIZATION The ability of tag management platforms to manage tags has fortuitously positioned this technology. It has provided an opportunity for top TMS platforms to act as a value-add data intermediary between the digital visitor, the multiple channels she visits, and the multiple systems in place to track, measure, and interact with her. How? Firstly, TMSes have a latent capability to improve the control and flow of interaction data between the visitor and personalization systems. This capability can help firms improve the FIGURE 7 The Benefits Of Using A Tag Management System Which of the following benefits has your firm experienced as a result of your tag management system? (Select all that apply) Improve website personalization 57% Improve quality of analytics implementations 4 Increase website performance 46% Improve analytics quality and tag deployment across large number of properties Better ability to integrate data across multiple online channels 45% 43% Improve mobile tracking 39% Increased return on ad spend 3 Improve marketing agility 36% Standardize data collection across vtendors 30% Reduce IT costs 29% Base: 56 North American digital marketing decision-makers who have implemented a TMS Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014

9 7 availability of more relevant data at the moment the customer engages, enabling improved customer experiences. Secondly, leading TMSes have the potential to link data across sessions and digital channels. This integrated data provides a sound foundation for crosschannel personalization. Respondents agree and are starting to appreciate the value this advanced capability can bring to cross-channel personalization. They told us that: Tag management brings customer data together. Over 60% of respondents agreed that tags were a method of managing the exchange of data between on-site visitors and digital marketing vendors, within a larger system that includes offline data (see Figure 8). Managing and coordinating tags using tag management technology enhances this data exchange and the value that can be gained. Through the use of their TMS s data layer, users can standardize the way customer data is described and collected across multiple domains, digital properties, and tagging technologies. This allows data to be brought together efficiently in the way that marketers understand and provides a clearer cross-channel understanding of the customer. Tag management helps brands manage and own their first-party customer data. As customers interact across digital touchpoints, they generate unique contextual data particular to the brand and specific to just the customers who engage. 5 This first-party-owned data is a potential source of competitive advantage and revenue. Tag management has a growing role in helping firms bring together, manage, and in effect own this data. In fact, 72% of respondents believe that it is important that their TMS helps integrate their customer data, as well as enables them to have full ownership of their first-party data (see Figure 9). FIGURE 8 Tags Manage The Exchange Of Data Between Visitors And Digital Technology How much do you agree or disagree with the following statement? We see tags as one method to manage the exchange of data between visitors and digital marketing vendors to collect on-site visitor data, within a much larger system that also exchanges off-site and offline data. Strongly agree 15% Agree 46% Neither agree nor disagree 26% Disagree 3% Strongly disagree 3% Don t know 6% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014 Advanced tag management informs cross-channel personalization. So, respondents have told us that a TMS helps bring customer data together but what about making it available? It turns out that from a standing start of a few years ago, over a fifth of respondents use their tag management system s data repository for segmenting, personalizing, or attributing their customers interactions (see Figure 10). These data repositories and their cross-channel customer perspectives are well positioned to feed multiple personalization systems, thereby enhancing the customers cross-channel experience.

10 8 FIGURE 9 Tag Management Is Important For Data Integration And Ownership Of Customer Data Is it important (or will it be) for tag management systems to support or provide core functionality for the following capabilities? Very important 5 Important 4 Data integration 37% 35% Enable you to have full ownership of your first-party data 4 24% Integrate data into cross-channel customer profiles Collect data from every touchpoint and device 35% 33% 42% 26% Inform targeting 32% 33% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014 FIGURE 10 Tag Management Data Repositories Are Gaining Traction Which customer data repository do you use when segmenting, personalizing, or attributing your customer interactions? (Select all that apply) We use our own proprietary technology and database when segmenting, personalizing, or attributing customer interactions We use a data repository provided by a vendor other than a tag management partner (e.g., behavioral targeting vendor, attribution vendor, marketing database, etc.) 39% 37% We use a data repository provided by a tag management provider 21% I don t know 14% We do not use a customer data repository for segmenting, personalizing, or attributing customer interactions 9% We do not use a customer data repository at all 3% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014

11 9 Key Recommendations: Synchronize Your Tag Management And Personalization Programs Survey respondents have confirmed the importance of tag management as an enabler of multichannel personalization. The success of both is manifestly intertwined. As a digital marketer seeking to roll out and leverage the value of tag management to improve personalization, you should: Include tag management within your personalization road map. Before making a significant investment in digital technology to collect, understand, and personalize customer engagements, take a moment to assess your firm s tag management capabilities. An enterprise-class tag management system is the foundation for crosschannel personalization. Be sure to invest in tag management technology and develop comprehensive processes and skills before your next major digital personalization project. Take the opportunity to rationalize personalization technology and processes. Digital personalization technologies have been around for a while and have proliferated. Separate business units have made independent procurement decisions based on their moment of need, and the potential for technology and process redundancies is now high. As part of your tag management project, take stock of the personalization capabilities that exist across the enterprise, and look for opportunities to rationalize these technologies and processes. Not only will you be able to leverage your existing technology and data better, but you will have fewer technologies and processes to manage. Start with managing tags and data better, and then focus on distributing data for personalization. Digital marketing respondents have told us that improved website personalization is the top benefit of having a tag management system. However, this high-value business benefit is dependent on your TMS firstly delivering on its core operational capabilities. At the start of your tag management program, focus firstly on improving and standardizing the management of tags and data across multiple digital touchpoints and domains. Doing so will provide a solid platform for a cross-channel customer understanding and is the starting point of the next phase distributing this understanding to multiple channels and personalization technologies for multichannel personalization.

12 10 Appendix A: Methodology In this study, Forrester conducted an online survey of 150 consumer packaged goods (CPG), retail, media and leisure, travel and hospitality, and financial services and insurance organizations in North America to evaluate marketers attitudes toward and adoption levels of tag management systems. Survey participants were digital marketing decision-makers in their organizations. Questions provided to the participants focused primarily on marketing personalization goals and technology adoption as well as tag management attitudes, techniques, and benefits. Forrester also interviewed a set of digital marketing decision-makers to probe deeper on the topics of the quantitative survey. The study began in March 2014 and was completed in April Appendix B: Demographics/Data FIGURE 11 Survey Demographics In which country is your organization headquartered? Canada 13% Which of the following best describes the industry to which your company belongs? Financial services and insurance 20% Consumer product goods 20% United States 13% Travel and hospitality 20% Retail 20% Using your best estimate, in calendar year 2014, what are your company s expected worldwide revenues? $100 billion or more 3% $50 to $99.9 billion 7% $20 to $49.9 billion 9% Which title best describes your position at your organization? C-level executive Vice president Media and leisure 20% 9% 1 $10 to $19.9 billion 11% Director 24% $5 to $9.9 billion 14% $1 to $4.9 billion 17% $800 to $999.9 million 3 Manager 49% Source: A commissioned study conducted by Forrester Consulting on behalf of Ensighten, April 2014

13 11 Appendix C: Endnotes 1 ebusiness leaders need to optimize their people, processes, and technology to serve today's ever-connected customers across a rapidly evolving set of customer touchpoints and across the entire customer life cycle. Source: Welcome To The Era Of Agile Commerce, Forrester Research, Inc., July 19, Empowered customers are disrupting every industry; competitive barriers like manufacturing strength, distribution power, and information mastery no longer create competitive advantage. In this age of the customer, the only sustainable competitive advantage is knowledge of and engagement with customers. Source: Competitive Strategy In The Age Of The Customer, Forrester Research, Inc., October 10, Firms need to go further than their existing single-channel website personalization approaches. They now need to deliver the right experience to the right user at the right time and on the right device. In addition, they need to deliver relevant, tailored experiences that meet individual user needs by combining historical, behavioral, and profile data with real-time situational feedback. Source: Advance To Next-Generation Personalization, Forrester Research, Inc., January 13, The highly dynamic pace and volume of tag management requirements frequently overwhelm organizations resources and processes. To address this longstanding challenge, firms have looked to tag management systems to efficiently add, edit, and remove tags from websites. Source: Understanding Tag Management Tools And Technology, Forrester Research, Inc., August 15, Forrester defines the contextual marketing engine that creates engaging environments for customer interaction and yields owned data specific to a brand and its customers that cannot be replicated by other methods. Source: The Power Of Customer Context, Forrester Research, Inc., April 14, 2014.