An Adotas Q&A with Dynamic Yield CEO Liad Agmon explores the increasing emphasis on personaliztion in online marketing and where it’s headed…and where it should not go.
A: Personalization — that is, intelligently leveraging consumer data to suit each visitor’s unique needs and motivations — has improved dramatically. As a result, today’s customers expect more from it. We’re all interested in different things, and we expect sites to cater to our personal preferences without our having to explicitly state what those preferences are. Being able to automatically predict and match each visitor’s interest: That’s personalization.
Q: What are the key trends in personalization today?
A: There are levels to personalization. The first level is basic: Dividing audiences into broad cohorts and targeting according to gender, traffic source, and device type.
At a deeper level, personalization means targeting according to context in the conversion funnel. That is, customizing each message and its cadence to the manner and time at which each visitor will be most responsive.
The deepest level of personalization is 1:1. That level of micro-segmentation involves a granular understanding of a visitor’s real interests: segmenting and targeting by individual behavioral interactions. Based on real-time and past activity, machine-learning algorithms can recognize previously unknown connections, and respond to them in a way that raises customer satisfaction and revenue.
Q: Some marketers seem to view personalization as an end in itself. Is that the right way to look at it? If not, what business goal(s) should personalization serve?
A: Personalization is one of the methods that can guide visitors through the conversion funnel in the most relevant way possible. Personalization is a means, not an end. The business goal is always to increase your Key Performance Indicators — and the most important KPI is of course revenue.
Q: How difficult is it to integrate and leverage a personalization platform with marketers’ existing systems? What skills does a marketing team need to do it right?
A: There’s always some level of effort involved when one is integrating large amounts of data from different systems. But whereas a decade ago you had to hire a systems administrator to implement such platforms, today’s systems integrate data from external sources much more rapidly. Now it’s a matter of days, not months. The more data you have, the more you can personalize experiences — but you can see a decent ROI without integrating an entire CRM, and can then decide whether it may be worthwhile to go further.
Q: What’s the future of personalization? Are we five years away from a “Minority Report” world? Ten?
A: Personalization is here to stay. The rich data provides a service by reducing the noise around decision making.
That said, we need never reach the kind of “Minority Report” personalization that happened in the movie when Tom Cruise’s character was seeing, as he walked through a building, content and advertising that was completely different from what the other pedestrians were seeing. We don’t need to go there because some signals, such as context, will always apply broadly. Rain falls on the just and the unjust, so both the just and the unjust will respond to rain-relevant content. Personalization will improve individual satisfaction, but it won’t get to a point where each visitor sees things so differently that they can’t relate to the experience of others.
We need to figure out how to bridge human-curated signals and adaptive algorithmic solutions. Companies that improve data-driven, personalized decision-making will thrive in the next few years.
About Liad Agmon, Co-Founder, Director and CEOof Dynamic Yield
Liad is a serial entrepreneur with rich experience as a startup founder and as a Fortune 500 executive. He founded information security vendor Onigma (acquired by McAfee) and social search company Delver (acquired by Sears Holdings). Following Delver’s acquisition, Liad served as a VP of New Services at Sears Holdings and on the board of its Home Electronics and Outlets business units. Liad served as an entrepreneur-in-residence at Bessemer Venture Partners and teaches at the Entrepreneurship MBA program in Tel-Aviv University and at the Zell Program of IDC Herzliya. He holds a BA Cum Laude from Tel-Aviv University in Computer Sciences and Film Studies.