Whom some consider the father of advertising, David Ogilvy, once said, “Never stop testing, and your advertising will never stop improving." Beloved children's author Dr. Seuss rhymed, “Today you are YOU. That is TRUER than true. There is no one alive that is YOUER than you."

Add them together and you have the two sides of the equation that Aimia Institute, the thought leadership centre for Aimia, recently examined in its 2015 Making Business Personal consumer research study.

The web, marketing automation tools, and behavioral data enable marketers today to test and distribute more and more targeted messages, across more media, than Ogilvy could have imagined. And, as technology allows marketers to personalize messages to the level of the individual, they can approach each “youer than you" consumer with eerie precision. Does this formula bring delight — or does it bring on more fright?

This is the first of two articles based on Aimia Institute's latest research where we looked at how consumers respond to marketers getting more personal.  They are getting more personal in terms of the channels they use to reach their customers — direct mail to web advertising to text messages to face-to-face — and the messages they craft — those based on personal data gathered from methods like web browsing to eye tracking.

As more and more retail marketers employ these technologies to make their consumer outreach more personalized, our community needs to know if there is a point where consumers feel we may have gone too far with our commercial messaging to them.  What truly is crossing the line?  What is the subtle difference between being distinctive and innovative versus manipulative and overly familiar?  Or, is there even a line at all? 

One step closer, then another, then another

We partnered with market research agency GfK to conduct an online panel survey across five international markets (United Kingdom, Canada, Australia, France, and India) and three industry sectors: supermarkets, banks, and airlines. Leading brands from each market and sector were used in the study as examples and nearly 3,000 responses were collected per market and approximately 1,000 in each of the three sectors.

One of the aims of this study was to use consumer behavioral data to better understand how different levels of personalized advertising would affect brand perception. How would consumers respond when they felt their individual behavioral data was used by marketers to predict future actions? Would this come across as an invasion of their senses of individuality, autonomy, and independence? 

How were consumers' subjective, personal perceptions studied in a scientific way? Online panel participants were shown illustrated storyboard scenarios that described different levels of personalized advertising. Three storyboards were shown in ascending order from the least to the most personalized scenario. After each storyboard, respondents answered two brand attachment questions to measure their perceived warmth towards the brand that was shown. A single brand attachment measure was developed by averaging responses to the two questions. 

Through the storyboards and subsequent questions, our joint researchers looked at personalization from two perspectives. One was the method of communication. In this method, direct mail was considered the least personal channel, followed, in order, by web advertising, targeted TV advertising, regular text messages, location-based texts, and ending with face-to-face interaction being the most personal.

The second dimension was the personal data that informed the message. Here direct mail was not based on personal data. The web and TV advertising was based on an individual's web browsing behavior, as were the least personalized text messages and location-based texts. Personal email content was used, then, to inform location-specific text messages from brands. Finally, eye tracking data based on what the individual viewed on his or her own screen was used to inform the four most personalized approaches from marketers. 

In these final four storyboard scenarios, an additional consideration was added — participants in the study were told that the brand with which the consumer originally shared data had sold or traded data with a third party. Respondents were then shown a scenario where the third party was related or relevant, such as a supermarket trading with one of the food brands it carries.  Next they were shown a scenario where the third party was irrelevant and “contentious," meaning that the third party was not logically related to the first brand.  A prime example of an irrelevant, contentious third-party trade would be a supermarket selling a consumer's personal data to a health insurance company that might have an interest in the healthiness—or lack thereof—of the consumer's food choices.  We recognized that for each of these cases, the fact that the first brand had traded personal data could be upsetting to the consumer.  And we wanted to better understand what would tip the balance in consumer comfort from positive to negative.

Yes, it is true, there are limitations to one-size-fits-all marketing campaigns

The study provided insights into how brand attachment for younger and older consumers varies as marketers' actions become more personal. Baby Boomers had the lowest brand attachment scores across the board and human interaction had the most impact on them. In contrast, younger consumers, Generation Y or millennials, were more attached to brands than older consumers, while also having a stronger preference for mobile communications and indicating less impact or change in attachment from human interaction.

Specifically, there was a clear preference for mobile interactions among the millennial set in contrast to preference for face-to-face interactions among older generations.  Which is not surprising given that today's youth are more attached, often literally, to their phones and do not place the same value in human interactions the way that their parents and grandparents do. Flipping the lens on this however, this also suggests that older consumers are more distrustful of brands and might also be more savvy about advertising campaigns than younger consumers. Possibly a negative halo effect from past marketing experiences like telemarketing in the 1980's or early email and web spam in the 2000's.

When we compared each of the countries in the study to one another, we discovered most responses echoed each other.  However, Britains did reveal more brand attachment in general, with the French being less responsive to personalization across the board.

Even with only looking into fairly basic demographic cuts of our findings, such as age and geography, a useful reminder emerges that one-size-fits-all campaigns are ill-advised and an obvious call to action for marketers to continue shifting towards data-driven marketing.

But some insights from this study were not as obvious.  Surprisingly, one of the least personalized and most traditional forms of advertising in the study was able to create the greatest brand attachment, which saw direct mail scoring highly.  Perhaps this is because we are getting less mail than in the past?  Or perhaps it is simply because the physical, tactile nature of direct mail can lead to a more emotional response from consumers, one that more ephemeral digital communications, in its current form, struggles to achieve?  Irrespective, our findings also revealed that location-based mobile communications score well with consumers and making it an emerging channel where personalization appears to be welcome.  For marketers looking to create more emotive digital interactions, this channel is likely strong testing ground.

To discover how personalization made respondents feel about the brands used in the study, participants were asked to select adjectives after seeing various storyboards depicting consumer interactions with the brand. The adjectives provided had either positive (e.g., personal, distinctive, or creative) or negative (e.g., creepy, manipulative, or overfamiliar) connotations. From there, our joint researchers developed a "heat map" showcasing how respondent agreement with each word either increased or decreased as the brand interaction shifted marketing channels from the less personal to more personalized.

We were pleased that some clear trends emerged.  In the least personalized channels — direct mail, Web advertising and TV-streaming ads — respondents showed relatively mild agreement with the adjectives across the board, both positive and negative.  But at the other end of the scale, highly personalized campaigns — such as location-based mobile messages that used an individual's eye-tracking data — elicited considerably high responses for both positive (e.g., innovative) and negative (e.g., aggressive) descriptors.

This indicates that marketers, whether retail or packaged goods or any industry virtually,  who use personal data to fashion a personalized marketing approach through the most sophisticated marketing channels will indeed get consumer attention. But we warned! The consumer's highly charged response could be just as strongly to the negative as it is to the positive.

This replicated a similar finding from an original pilot study of GfK's that was conducted prior to this research with Aimia Institute. In general, greater brand attachment is generated as messages are increasingly personalized based on customer data.  But after a certain high point, this starts to rapidly decline — suggesting that there might be a point at which personalization crosses over into the realm of "creepy" in the eyes of consumers. Something we all assumed to exist, but knew of anecdotally and by way of one-off examples.

Our research shows that there is not necessarily one "point" at which consumers switch from feeling affinity for a brand to that of distaste.  However, it does suggest that marketers can detect a tipping point where badly-judged use of personal data can make consumers feel uncomfortable.  And, within our study, this is most likely to happen when an irrelevant third party approaches the consumer in a highly personalized way.

Marketers need to remember that their customers are intelligent and experienced users of the Internet, mobile, and other digital services, and so they generally accept that marketers will use their data in efforts to market to them.  At the same time, though, consumers will react negatively when they think a brand has gone too far with the information they have collected, especially when brands trade personal customer data with a different marketer. This passing off of information is disturbing to consumers.

Still we would recommend marketers go even further even when designing their own personalized campaigns and be fairly cognizant of avoiding the "creepiness" effect.  Take measures to ensure your personalized communications are always adding value, not purely exploiting the growing treasure trove of data for commercial gain.

As Clifford Stoll said, “Data is not information, information is not knowledge, knowledge is not understanding, understanding is not wisdom."  We all need to be wise with personal data or we will face the scorn of telemarketers and spammers.  Surely we have learned to be better by now.

This is part one of a two-part series.  In part two of our analysis of the 2015 Making Business Personal research study we will turn to digging deeper into respondents' concerns with data privacy.

For more details on this study, review the full technical report that is available.

For more information contact us at [email protected] or visit www.aimia.com

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