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2014: The year of the data economy

Data is the fuel that drives the digital economy. During 2014, we have seen more focus than ever on how brands drive value from data for their own businesses, while simultaneously driving massive value to their customers.

This is part of a broad transformation from the wasteful, interruptive advertising models of the past to a marketing approach that is as engaging and empowering for the consumer as it is effective and efficient for the brand. There are three interlinked trends in the market moving us in this direction.

Privacy: a paradigm shift

Privacy has always been an emotive issue in digital marketing and advertising. Privacy advocates and many consumers have had understandable concerns about just how aggregators, brands and Internet companies use personal information gathered online for marketing purposes.

We are seeing a subtle shift now as consumers accept that providing personal information to the likes of Google and Facebook is the cost of the many free applications and value added services they use in their day to day lives, such as email and social networking. There is an implicit exchange of value.

That service provider, in turn, will leverage its users’ attention and information for commercial benefit.  As consumers grow familiar with that value exchange principle, their attention is shifting towards getting the best deal possible for the information they share.

What I expect to see unfold during the next 12 months, is a shift by consumers to take more control over their own data and manage it as carefully as they would any currency. They will want transparency regarding how their data is used, stored and managed, and will be more proactive about leveraging their data for incentives, discounts and other rewards.

For that reason, look out for a new class of aggregator to rise in the future in the form of intermediaries that help consumers to manage their data and their relationships with the providers of the digital apps and services they rely on.

Everywhere you go, you take your data with you

With mobile technologies such as location-based services, geo-tracking and near-field communications maturing rapidly, they are starting to find a strong role in marketing and advertising. Now, in addition to being able to ask for and infer demographic, behavioural and psychographic data about consumers, companies can also gather real-time information about where consumers are and what they are doing.

In addition to location data from smartphones and tablets, users are also capturing data through wearable computing devices such as the Nike Fuel Band activity and other exercise trackers. Mobile devices and wearable sensors mean that in addition to location data, users can share information about their current activities,  fitness states (heart rate, for example), and more with trusted parties, i.e. Health Insurer.

Of course, this raises some serious privacy questions. If the privacy concerns are managed sensitively and intelligently, this data can be used to improve the consumer experience while creating efficiencies for companies.

For example, imagine the potential of find-me-deliveries where a Fedex courier can come to your present location to deliver your package from Amazon to you, even if you’re not home or in your office.

Asking permission rather than forgiveness 

With new sources of data – mobile technologies, social networking services, sophisticated tools for gathering and analysing behaviour and demographics – marketers are able to engage more with their customers in a personalized manner. But as data about end-users becomes more detailed, organizations need to become ever more responsible and sensitive about how they use and manage customer information.

Permission-based marketing is therefore more important than ever before. Brands, aggregators and online services must outline in detail to customers which information they would like to track, how they plan to use it, and what the benefits to them are. They should secure permission from customers to use their data for marketing and treat them with respect.

Companies that use consumer data in a way that benefits their customers will be more trusted and competitive than those that are careless or insensitive in the way they leverage this information. This will result in customers that are more engaged, more satisfied and more loyal.

Their relationships will evolve into ones of dialogue and mutual respect, built on an exchange of value that is beneficial for both parties. Advertising will be more precise and less wasteful, with customers welcoming it because it is relevant to their needs.

Acceleration General News
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Acceleration enables the transformation of marketing organisations. By building new data and technology-enhanced capability Acceleration stewards a step change from marketing which is fragmented, static and product-centric, to marketing that is orchestrated, agile and customer-centric.

Part of Wunderman, Acceleration employs 150 strategic marketing technologists globally.

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