The Downside of Not Personalizing Content
Heightened U.S. politics over the past year has stirred some debate about personalization.
Critics contend that, because political content may be based on clicks, likes, dislikes and shares, it skews to the individual values of consumers, creating sheltered online universes of messages and interactions and limiting information that could make them better informed.
Whatever one may think about exposure to different political ideas, it has never been more important for brands to ensure that the content they deliver to consumers is curated and personalized — not by grouping people in categories based on characterizations and behaviors, but to individuals. And with advances in artificial intelligence and machine learning, there’s no reason not to personalize. Because the downside of not personalizing is potentially perilous to a CPG brand’s business.
Lack of familiarity breeds contempt
In the age of Amazon and Netflix, consumers are used to and expect companies to know what they're interested in, when they’re interested and how they prefer to be engaged. Today’s world of short attention spans has made personalization a key imperative for brands to secure and maintain audience interest.
Seventy-five percent of the content watched on Netflix is driven by personalized recommendations, while 35% of Amazon purchases come from personalized recommendations. People are so used to these recommendations being spot-on that, if they aren’t, Netflix says, they're gone in less than a minute. What’s the potential downside of not personalizing? For Netflix, without its personalized recommendation engine, an estimated $1 billion could be in jeopardy.
This algorithm-driven culling down of content to a menu of likely choices that, with each interaction, learns more and more about individual preference, is a big reason why consumers are fans of these brands. Imagine having to weed through the nearly 400 million products across dozens of categories sold on Amazon to find what you’re seeking. Indeed, nearly 40% of consumers overwhelmed with too many options have left a business’s website and made a purchase elsewhere online or in store, according to Accenture.
The pitfalls of ‘sort-of’ personalization
Consumers demand choice and proactively seek out the information, content and products they want no matter where they are. Once solely the domain of bricks and mortar, grocery items today are being purchased online, with 40% being made on mobile devices, according to Criteo research. Millennials with children report that 56% of their total purchases are made with mobile phones, while purchases within categories such as health & beauty aids come in slightly lower at 44%. The Millennial generation says it’s easier to search and buy products online, especially while on the go.
A CPG company leveraging data and analytics to understand these consumers — which of its brands they're seeking out and when — has the potential to create deeper relationships through personalized content. Today, AI, machine learning and natural language processing can provide marketers with a richer understanding of their audience’s interests, and then automatically match the right content to the right person — anywhere that person may be online.
By tapping into the data behind search history, purchase behavior and online activity, for example, AI can let marketers unlock a wealth of information on consumer preferences and take personalization to a whole new level. Campbell Soup Co. leverages AI to serve up tailor-made recipes to consumers drawing on local weather conditions, the individual’s past choices, preferences, and available ingredients.
Forty-one percent of grocery shoppers and the same percentage of health & beauty aid shoppers say they sometimes browse for items in other categories. Marketers drilling down to understand an individual shopper’s specific browsing behavior can be confident that she will appreciate an email personalized with content related to the products she was perusing.
Conversely, frustration, annoyance or insignificance are not feelings any brand wants to stir up in consumers because they have carelessly bucketed them into a group and sent inappropriate messages. Constellation Research estimates that lack of content relevance often results in 83% lower response rates in the average marketing campaign. Context provides brands and organizations with the relevance to earn permission to engage with consumers. According to Forrester, consumers who experience disgust, anger, or a feeling of neglect during a brand interaction are eight times more likely not to be unforgiving.
Personalize … with a personal touch
With all the advantages of personalizing content, there’s little reason for CPG brands not to. AI gives brands deeper insights on a one-to-one basis to ensure that the content engagement is welcomed and even sought. Personalized contextual relevancy by time of day, geo-spatial location, weather, and identity improves commerce conversions by two to three times over normal non-personalized content, according to Constellation.
And that’s just a start. Content personalization technology factors interests, past behavior and interactions across digital channels, further illuminating individual profiles to better tailor content, which ultimately leads to increased content consumption.
So, is there a downside to not personalizing content? Absolutely. But brand marketers that approach personalization the right way are yielding compelling returns across all aspects of the consumer experience.
Steve Sachs is chief executive officer of OneSpot. He has extensive experience at the intersection of digital media, content and marketing. OneSpot works with Fortune 500 companies including Nestle, IBM, Whole Foods Market, L’Oreal and Delta Faucet.