by Norm Johnston

The Article 29 Working Party is busy shaping the future of Europe. If you haven’t heard of this group don’t panic; it’s not the sinister new villainous organization in the latest James Bond movie. Rather it’s the European Union’s predictably dull but highly influential data-protection advisory group, who are leading the charge on the new EU Privacy Directive, due for imminent interpretation and implementation by each local EU market.

Without a doubt it’s a good idea to regulate and legislate when it comes to people’s private information. Certainly the Internet still at times resembles the Wild West; greater consumer understanding, consent, and control over usage of their data is critical to further growing all aspects of the Internet, whether usage, online advertising, or e-commerce.

However, similar to the USA and other markets, privacy has become a political hot button, which has led to the usual scaremongering and dispersion of misleading information. The good news is that governments are collaborating with industry leaders, including the likes of the IAB, Google and WPP, to come up with a sensible solution that balances consumer privacy concerns with legitimate marketers’ wishes to create a more effective and impactful online experience. Why is this important? At the very heart of this issue is arguably the future of marketing itself. Without a proper – simple, intuitive, legal, ethical - online exchange of data, both consumers and brands will find far reaching implications to not only advertising but also the way they buy, sell, create, and configure

products and services. Imagine a world where Amazon couldn’t recommend books you might like? Such draconian restrictions on data usage are actually under consideration by some markets.

To be fair the majority of consumers realize that in return for some of their information – whether anonymous behavioural or opt-in personally identifiable (PII) - brands can do a much better job adapting their products and associated marketing to better meet their unique needs. According to the UK’s latest fast.MAP/DMA Data Tracker, where some relationship with the brand exists up to 75% of consumers would be happy to share personal information; 62% would do likewise if they are simply in the market to buy something.

At Mindshare we have a name for this accelerated data-driven and consumer-focused mentality: Adaptive Marketing, which is an approach that enables marketers to truly adapt their activities in rapid and unparalleled ways to meet their consumers’ interests and needs. Not just advertising but every part of a brand’s marketing mix to make its product(s) more relevant and beneficial to everyone involved. And it all depends on data.

Live Dashboard Application

At the very heart of this issue is arguably the future of marketing itself.

Take advertising. Via Adaptive Marketing advertisers can now optimize both their media and creative to ensure consumers are getting more relevant content both online and offline.

For example, using tools like our Live dashboard, Mindshare can now instantly assess both slow-moving analogue and fast-moving digital data to determine where consumers will most likely value and engage with a brand’s advertising and content. Offline media such as TV can now be optimized based on assessing real-time proxy metrics like Twitter activity, Google searches, and Facebook posts related to a TV spot. A recent GroupM/Thinkbox study in the UK showed that 20% of the total response to a TV campaign is driven immediately online within 10 minutes of exposure. Of course many of these online destinations have adaptability in their DNA, each with either paid, owned, or earned opportunities to adjust brand content and advertising on the fly.

Creative messaging can also be adapted instantly; technology like WPP’s Xaxis, Collective’s Tumri, and Google’s Teracent enable advertisers to assemble ads in real-time based on a target audience’s behaviour and preferences. Mindshare is even using social data to adapt ad units. Our Shanghai office recently launched Social DNA 1.0, a digital display ad unit that dynamically syncs with users’ public profiles from QQ, Ren Ren and Sina to create a personalized branded experience for users. Visible World brings this same dynamic ad configuration capability to television. For example, Lufthansa can now adapt their TV spots featuring different calls to action, images, destinations, and pricing based on different household profiles and their physical location.

Mindshare can now instantly assess both slow moving analogue and fast-moving digital data

Kleenex Personalised Tissue Box

“Upper funnel” marketers may be inclined to relegate such talk to their direct-response oriented colleagues. However, in an increasingly digitally-connected media ecosystem, even those with brand objectives will face pressure to use Adaptive Marketing methods to increase their engagement levels, video views, and Facebook “Likes”.

Advertising is of course only one element of Adaptive Marketing. Consumers are using their personal data to adapt brand relationships in a variety of ways. For example, marketers have been experimenting with online adaptable packaging for years. Jones Soda was one of the early pioneers of customizable labels (great for wedding gifts!). Others have since jumped on the band-wagon. Everyone from Kleenex to Frosted Flakes now offer some form of adaptable packaging of their products.

Pricing has become infinitely more dynamic. Groupon and other such crowd-sourced Web sites bring consumers together to influence and dictate product pricing. Dell regularly uses Twitter to offer new price promotions based on analysing consumer sentiment. Many companies, most notoriously the gaming industry, analyse Google search query volumes to predict sales and consumer demand, important factors when establishing pricing models.

Last but not least marketers are also using digital data to adapt their actual products. Nike lets runners customize their trainers via Nike ID, while millions of people routinely use My M&M’s to adapt the colour and text on their favourite candy. Coca-Cola has introduced their Freestyle vending machines, which enables consumers to create their own

beverage by mixing together existing Coke products and then sharing their favourite creations with their friends via Facebook. P&G and Starbucks have set up communities on Twitter and Facebook to solicit new product ideas to feed into their product development teams. Even notoriously secretive companies like Apple are rumoured to use buzz monitoring and consumer sentiment tools to adapt their products based on user likes and dislikes. Likewise at Mindshare we routinely use such buzz monitoring tools not only to inform our client’s media activity but also to feed into their product development and customer service teams.

Coca-Cola’s Freestyle Vending Machine

Even notoriously secretive companies like Apple are rumoured to use buzz monitoring and consumer sentiment tools

Leveraging Real Time Data

Is all this adapting worth it? A marketer’s level of adaptability is dependent on many variables such as the product’s complexity, brand positioning, and purchase consideration levels. In short, marketers must ask whether an Adaptive Marketing approach would bring incremental value to their consumers and to the company. In fact, some luxury brands may actually benefit from their inflexibility and elusiveness. For others the benefits of Adaptive Marketing can be enormous: many of our clients are seeing a dramatic increase in sales with lower CPA’s while others are building a powerful army of Facebook fan advocates.

What all marketers should consider is the threat from new companies with adaptability built into their DNA, e.g., Adorable Diapers for customizable nappies, the Cereal Club for your perfectly blended mix of cereals. In an

age of margin-pressures and the constant threat of commoditization, some level of Adaptive Marketing may be a necessity rather than a luxury or one-off experiment.

Becoming an Adaptive Marketer can require serious structural changes. For example, the entire media process - budgeting, planning, buying, and optimizing - needs to become more fluid and “always-on” rather than static and sporadic. Brands need to develop a library of creative assets – images, calls-to-action, applications – that can instantly be deployed into advertising units when required.

Fortunately offshore creative production facilities like WPP Deliver and our own Mumbai Mobile Centre of Excellence enable marketers to scale these asset libraries at low cost. Processes need to be revised to reflect the need for speed and rapid iteration. New technologies should be adopted to handle the complexities of managing real-time data, marketing and pricing rules, asset distribution, even packaging and manufacturing. Companies will also need to hire new talent, including nimble uber-geeks used to acting on rapid streams of incoming data.

Processes need to be revised to reflect the need for speed and rapid iteration.

While all of these components are important, none is more critical than data, which is why you should be aware of the Article 29 Working Party and other such governmental bodies.

Data is ultimately what will enable marketers to give consumers the best content (including ads), pricing, products, and experiences. Used ethically it will bring rewards to everyone involved. It’s not necessarily a new idea. Jack Welch, the former CEO of GE, once said that there are only two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than the competition. Who knew Jack was our first Adaptive Marketer.

There are only two sources of competitive advantage: the ability to learn more about our customers faster than the competition and the ability to turn that learning into action faster than the competition.

Jack Welch