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The Personalization Paradox: Is Cohort Data the Answer?

Marketing data provides a simplified model of the real world based on probabilities, likelihoods, and aggregates of behaviour. As the industry matures, and we strive to use data in a way that is intelligent but at the same time protects the identity of individuals, we must accept that these aggregates and cohorts are good enough to deliver relevant, personalised experiences. We need to do what is right to achieve a positive balance between the needs of the individual and the commercial needs of brands.

How personal data is used for advertising and marketing has been increasingly in the spotlight since the GDPR was introduced in 2018. The maturing regulations and subsequent developments have made people far more aware of what their data is being used for, while at the same time changing the debate around and recalibrating what is and what is not allowed.

Overall, research by the GDMA reveals consumers are increasingly comfortable sharing data, and are becoming more accepting of brands using their information for advertising. But there is still a real variation in attitudes. In the UK:

  • <big>46%</big>

    46%

    ARE DATA PRAGMATISTS, meaning they are concerned about privacy but decide 46% if the service is worth the data requested on a case-by-case basis.

  • 31%

    ARE DATA UNCONCERNED, meaning they have low levels of concern around 31% privacy and are happy to share personal data.

  • 23%

    ARE DATA FUNDAMENTALISTS, meaning they are very concerned about privacy and are unwilling to provide information in return for service enhancement

FINDING THE RIGHT BALANCE

Of course, there are people that will say moving from individual-level data to cohorts will reduce the accuracy and predictive power of the data. In some ways, there’s truth in that. By definition, aggregated data loses some of the resolution of the original individual-level data. But it’s a question of finding the right balance and understanding just how precise you need to be to enable relevant experiences that drive performance.

How we use data in marketing and advertising is the same. We need to balance across these different dimensions. And when we find that balance, where brands get the right level of information to achieve their objectives, without unnecessarily using individual data, everyone wins. Customers get to see relevant, meaningful advertising without their privacy being compromised, and brands get the performance they need combined with ease of data access, and without having to concern themselves quite as much with regulatory control.