How Marketers Can Personalize at Scale

By Matt Ariker, Jason Heller, Alejandro Diaz, Jesko Perrey

Marketing has entered its uncanny valley moment. That term was first used to describe the
deep unease people feel when a robot or computer-generated human facsimile nearly succeeds in
passing itself off as the real deal. It may walk like a person and talk like a person, but without the
nuance, context, and tone that make for real engagement, whats left rings false. And thats off-
putting.

Some marketing efforts give off the same vibe, like that creepy feeling when a casual online
search leads to a glut of ads for the same pair of boots or getaway destination. While this type of
engagement represents a step forward in personalizing experiences with customers, clumsy
efforts at retargeting often feel intrusive and annoying.

Its worth trying to get right. We know that personalization can deliver five to eight times the
ROI on marketing spend, and can lift sales by 10% or more. Although the marketing industry has
been promising personalization at scale for the past 20 years, expecting a machine to generate the
perfect personalized experience is a fools errand. Rather, weve found the best way to achieve
meaningful personalization is by systematically testing ideas with real customers, then rapidly
iterating. Until recently, however, the tools and capabilities to execute this operationdelivering
truly relevant personalized offers and content to millions of customers and prospects, across
channels, content formats and touch pointshave not existed.

Thats finally changing. Marketing technology, automation, and advanced analytics techniques
have now reached the level where effective personalization at scale is possible. And yet getting
this test and learn engine to run properly requires a fundamental re-architecting of a companys
marketing analytics processes. The goal is to create a learning ecosystem, one that connects
insights to outcomes as part of a continuous, self-improving cycle.

Integrating the Three Ds

This requires the integration of three things: data discovery, automated decision making, and
content distribution.

Data discovery is about sourcing and combining traditional and behavioral data to uncover
meaningful insights about customers (such as their preferences, interests, and needs.). Not that
this is easily done. Given the complexity of coaxing meaning from a wide range of data,
companies tend to limit the data they use, generally focusing on the data thats easiest to get. In
addition, traditional CRM systems, built on more rigid, relational databases, often dont have the
flexibility or scalability to manage vast piles of structured and unstructured data. What
companies need are systems that can run the advanced analytics to discover useful and practical
insights, and then trigger the sending of appropriate messaging, e.g., if customer A does action
B, send item C.

An emerging answer to this issue is the customer data platform (CDP), which is the modern
version of a customer data warehousethough one that is far more flexible and interconnected.
CDPs integrate first-party data, including customer-supplied data and purchase history, website
or app behavior, and marketing response and engagement information, with third-party data on
customer interests and shopping behavior, to improve individual targeting.

The brains that drive automated decision making are the advanced analytics models that
produce propensity scores for each customer or prospect. These scores define the probability of
an individual responding to a specific offer, or engaging with specific content. Whereas standard
data models can only pump out messages or offers, modern automated decision-making
processes allow two-way communicationcollecting and tracking customer reactions and using
that information to guide future messaging and offers. More complex decision-making rules,
exceptions, or unacceptable variances can be programmed to be escalated to managers (although
these exceptions should be less than five percent of all decisions).

The last mile of personalization is content distribution. A good system will use customer and
prospect scores to trigger personalized ads and landing pages, and to distribute specific content,
offers, or experiences across channels. For example, a telco could personalize the bundle offered
to anonymous website visitors based on the type of car they drive, their city, and the stores they
frequent. Similarly, an airline can set rules to help automate decisions on the lowest cost offer for
a ticket and predict which types of customers will respond to the offer over email, a display ad,
or within the mobile app.

For these three Ds to operate successfully, companies need to integrate their technology
systems, often through APIs, to allow data to flow where its needed and decisions to happen in
real-time. Doing so allows much of this cycle to learn and adapt in real time, automatically. A
series of virtual pipes feed response data from customer interactions into the CDP to develop
better statistical and event-based models (e.g., response rates based on an event and context).
Predictive marketing analytics then make recommendations on which actions drive the highest
conversion rates.

Companies that succeed in integrating and automating their customer and marketing data
platforms can test, track, refine and optimize themselves in real-timeensuring that the right
offer goes to the right customer or the best leads get routed to the best salespeople. This
allows brands to shape their customers decision journeys, deepen their relationships, and gain a
distinct competitive advantage.

Providing the Right Functional Support

Of course, its not enough to gather insights, even at a massive scale. The organization has to be
able to act smartly on those insights. Addressing that problem requires changing how things are
done, particularly in the following four areas:
 1. A coordinated strategy. Marketers need to determine where theyre going to play and
how theyre going to apply technology to engage consumers. That means defining
specific use cases, coming up with schemas, taxonomies, and then orchestrating the right
internal and external resources (e.g., agency and technology partners) to manage the
process. In many organizations, these responsibilities exist loosely through disparate
activities, but they need to be coordinated and managed as a cohesive function to put
insight into action at scale.

2. Experienced campaign management teams. While automation implies that you can sit
back and let the system run itself, there is no autopilot. It takes experienced marketers to
set up, deploy, and manage always-on campaigns. Organizations can run systems
internally with a dedicated team or enlist their agency to support themprovided they
still appoint an experienced individual to liaise with those agencies.

3. A sustained commitment to analytics. Data and analytics are the backbone of

personalization at scale, but an IT-only project wont work. Senior leadership
commitment and cross-functional involvement are required to support the infrastructure
and continuously update the data and advanced analytics models that fuel the decision-
making engine. Leaders need to continually test business use cases and adjust the data
and tech infrastructure, managing these integrated elements in the way one would a live
entity, one that is dynamic, fluid and ever-evolving. Because the marketing technology
ecosystem evolves quickly, systems need to be flexible so that technologies can be
swapped out when necessary.

4. A lot of very good content. Content fuels personalization and someone needs to
develop and organize it. You dont want your robots to guide people to stale, irrelevant,
or low-quality content. This puts a significant onus on developing a strong content
supply chain fed by designers, copywriters, animators, and videographers. All content
attributes can and should be tested regularlyto refine the look and feel and tone, calls to
action, and the value proposition.

Getting to the other side of the uncanny valley takes commitment and discipline. But it may be
the best option for companies that want to personalize at scale and accelerate their growth in the
digital world.

Matt Ariker is the Chief Operating Officer of McKinseys Consumer Marketing Analytics
Center.