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Why Digital Marketing Should Join The Sharing Economy
As the sharing economy gains steam, columnist Mike Sands says it's set to disrupt digital marketing and how marketers use their engagement data.
Back in 2008, potential investors thought the idea of renting airbeds and rooms to strangers was a crazy idea. But today, Airbnb is upending the hospitality industry, serving an average of 425,00 guests per night — more than many global hotel brands — with expectations of generating $900 million in revenue this year.
The fast-growing sharing economy is disrupting industries from ride sharing to finance to music streaming.
This has been good for consumers, who are reaping the benefits of low prices and convenient new options: They can now stay in a British castle for the price of a hotel room. They don’t have to stand in line for a taxi. They’re “monetizing” their kids’ former bedrooms and empty guestrooms.
At its core, the sharing economy is about fostering collaboration to turn underutilized resources into new revenue streams. This quest for increased efficiency appeals well beyond the consumer marketplace as businesses seek to optimize assets by fostering B2B exchanges for vehicles, parking spots, office space and more.
In some ways, marketers are well ahead of this curve. They’ve been using co-operatives for years to enrich their customer data.
For example, catalog retailers have long shared their mailing lists with other retailers to reach customers beyond their own. Financial services companies have hedged against fraud by pooling data.
In the travel industry, airlines and hotels have successfully shared data with one another to identify in-market travelers.
Now, as the sharing economy picks up steam, the concept of collaboration in data-driven marketing has never been more relevant. The most pressing challenge for brands today is having the ability to recognize the same customer at each and every touchpoint and to understand her needs in the moment.
Achieving People-Based Marketing
True people-based marketing requires recognition and right-now relevance with every interaction on desktops, smartphones, tablets, in stores, and more. Cross-channel identity is the new currency — and as of yet, only the big walled gardens and very largest Internet brands have enough consumer log-in data to win this do-or-die battle for addressability.
That’s why there’s so much buzz about second-party data right now. Second-party data is another company’s first-party data that is strategically shared with your brand, in exchange, most likely, for some of your own first-party data.
The idea is this: While few brands have the scale necessary to match the sheer number of identifiers in Facebook or Google’s possession, together they do.
New technology is allowing brands to securely share anonymized data with trusted marketing partners to scale their ability to market to real people across all channels. While cooperatively exchanging data in a privacy-compliant way, “trust groups” can leverage deterministic matching methods to fill in the gaps to become smarter about each customer and her journey.
What makes the customer unique? What are her interests? What devices is she using? Where is she researching products? In which channel is she buying? With these kinds of insights, the opportunities are endless for creating people-based marketing experiences that are more personalized and engaging.
Sharing Requires Trust
In the new sharing ecosystem, participation in cooperatives won’t entail throwing your data over the wall for anyone to use. Networks of complementary brands with overlapping audiences will create private trust groups.
A network might include a publisher and its advertisers, an automaker and its dealerships, a retailer and its co-op advertisers, publishers within a premium ad exchange, or sub-brands within a larger retail organization. Members will be in the driver’s seat by controlling with whom they share and what they share — while staying focused on their mutual goals of extending audience reach and bringing the customer into focus.
With data sharing comes responsibility. Before exchanging their hard-earned customer data, marketers will demand security and privacy compliance.
In the sharing economy, the key to success is offering a trust model that makes people feel safe. (This certainly was the case in convincing people to share houses or cars with people they don’t know.)
In digital marketing, the stakeholders include brands and their customers, and both groups will expect transparency and fair value in exchange for shared data.
High-quality customer data is a growing source of competitive advantage. For too long, marketers have been overly dependent on third-party data that is less than fresh, rather than real-time knowledge about real people.
The first-party data that marketers have collected through direct interactions with consumers — the best source of truth about their customers — has been one of marketers’ most underutilized assets.
Working together, marketers can maintain control of this valuable data while accelerating their ability to recognize and target known customers across channels.
As it’s already done in other industries, the sharing economy will soon disrupt digital marketing. It will change how marketers think about their engagement data, and how they use it, scale it and share it, in order to gain deeper insights and achieve people-based marketing and deliver better customer experiences.
Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.