A Forrester Consulting

Thought Leadership Paper

Commissioned By Rocket Fuel

February 2015

One-To-One MarketingMarketers’ Goals Require ACorporate-wide Data Strategy AndThe Right Partners

Table Of Contents

Executive Summary ...........................................................................................1

Data Are Fundamentally Changing How Brands Interact WithCustomers ...........................................................................................................2

Subpar Data Savviness And Privacy Concerns Hold Back One-To-OneMarketing .............................................................................................................3

Delight Your Customers By Uniting Your Data And Following TheLead Of Privacy Pioneers..................................................................................4

Key Recommendations .....................................................................................7

Appendix A: Methodology ................................................................................8

Appendix B: Supplemental Material ................................................................ 8

Appendix C: Respondent Demographics .......................................................8

Appendix D: Endnotes.......................................................................................9

ABOUT FORRESTER CONSULTINGForrester Consulting provides independent and objective research-basedconsulting to help leaders succeed in their organizations. Ranging in scope from ashort strategy session to custom projects, Forrester’s Consulting services connectyou directly with research analysts who apply expert insight to your specificbusiness challenges. For more information, visit forrester.com/consulting.

© 2015, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited.Information is based on best available resources. Opinions reflect judgment at the time and are subject tochange. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impactare trademarks of Forrester Research, Inc. All other trademarks are the property of their respectivecompanies. For additional information, go to www.forrester.com. [1-R029ZQ]

1

Executive Summary

One-to-one marketing, defined as the ability tocommunicate in a personally relevant manner withcustomers and prospects based on a persistent data-drivenview of those targets, is the modern marketer’s testament to17th century British philosopher Sir Francis Bacon’sproclamation that “knowledge is power.” This is increasinglytrue as knowledge is based on the aggregation and analysisof data about companies’ best customers and prospects.But translating knowledge to power is easier said than donewhen those data come in a variety of forms and from avariety of disparate sources, and when control of the datarests in a variety of corporate siloes. Surmounting thehurdles inherent in such a fractured environment requiressignificant corporate willpower spurred by a keenunderstanding of the potential results: true one-to-onecommunication that forges a bond with customers andcreates brand advocates who move markets.

In June 2014, Rocket Fuel commissioned ForresterConsulting to evaluate the sentiments of and preparednessof marketers for implementing one-to-one marketing. Thestudy also aimed to explore the impact on one-to-onemarketing of increased attention on the part of companies,governments, and individuals to personally identifyinginformation (PII), defined as information that can be used onits own or with other information to identify, contact, orlocate a single person or identify an individual in context.Forrester developed a hypothesis that tested the assertionthat marketers have long wanted to identify and messagetheir customers and prospects in a highly personalizedmanner within digital environments, but that technologylimitations— particularly around data integration— andconcerns regarding protecting consumer privacy haveprevented those connections.

In conducting a survey of 103 business-to-consumer (B2C)marketers with targeting tools and technology oversight,along with four in-depth interviews sourced from the samesample, Forrester found that while most marketers areaware of the potential knowledge and power to be gainedfrom true data aggregation and analysis, they are ill-

equipped to undertake that process. These marketers are,however, aware that their more advanced competitors aremoving quickly and therefore are seeking solutions.

KEY FINDINGS

Forrester’s study yielded three key findings:

› The shifting customer life cycle demands a newmodel of data-based engagement. 81%of respondentsto our survey agree: The always-on, multideviceconsumer now has greater control overcompany/customer interactions, and that’s a fundamentaland historic change. In order to thrive in this newenvironment, marketers must learn all they can aboutcustomer practices and preferences. The source of thatknowledge is data, which 84% of survey respondentsdeem the “connective tissue” for omnichannel campaigns.The desired outcome is the ability to communicate on aone-to-one basis, to which one interviewee attributed a25% to 30% uplift in sales.

› Sourcing, aggregating, and analyzing data remainsignificant corporate challenges. Most of the marketingexecutives surveyed, including those most eager to moveto true one-to-one communication, recognize that theirorganizations are not yet adequately equipped with thetools, partners, or mindset to embrace the discipline. Only23% of survey respondents consider their organizationsto be “completely prepared,” and even fewer— 21%—said their current marketing practices “completely align”with one-to-one marketing. Further, respecting andprotecting consumer privacy is a necessary concern. 78%say protecting their customers’ (PII) has risen inimportance over the past year, yet only half ofrespondents have staff dedicated to doing so.

› Many companies can’t rely on internal resourcesalone. Most respondents surveyed don’t have the abilityto smartly embrace and implement a data strategy ontheir own. Beyond assessing and organizing internal dataresources and aligning executives around key corporatedata strategies, an average of 64% of respondents statedthey require the help of partners with proven track recordsthat can supplement internal resources and deliverresults.

Marketers see tangible and significant benefitsfrom one-to-one marketing but struggle tointegrate disparate data sources due to scarceinternal resources and the need to identify new,external partners.

2

Data Are Fundamentally ChangingHow Brands Interact WithCustomers

Once upon a time, marketers wielded significant controlover their interactions with customers. They pushed outmessaging, dictated pricing, and controlled access. Thosedays are over. The multiplicity of affordable devices used byconsumers, including smartphones, tablets, and laptop anddesktop computers, has engendered the always-addressable consumer. These individuals, who comprisenearly 58% of the US online adult population, can accessinformation, comparison shop, tap into community wisdomthrough social networks, and make purchases on the deviceof their choice at whatever time they please (see Figure 1).1

As a result:

› Customers are in control. Most marketers we surveyedbelieve that the myriad options for interaction have putconsumers in the driver’s seat. 81% said they believe thatconsumers have increasing control over how marketersinteract with them over devices and channels.

› The funnel is no longer relevant. The combination ofdevice options and consumers’ ability to accessinformation whenever and wherever has given rise to thealways-addressable customer. It’s also led to a new focuson the part of marketers on the customer journey. In fact,74% of the marketers we surveyed said that there is anincreased emphasis on the customer journey within theirorganizations. The always addressable customer has alsogiven rise to the realization that traditional approaches tocustomer communications need to be rethought.Marketers now know that they must devise new strategiesfor reaching, selling to, and retaining customers. Further,they know that they should be aiming to evolve thesecustomers into brand advocates— loyalists who engagewithin their communities on behalf of the brand.

› Marketers no longer work in siloes. In recognition ofthis new customer journey, many marketing organizationsare now combining brand and direct marketingresponsibilities. In fact, 63% of those surveyed representthis new paradigm. This shift makes even more senseconsidering that, although digital media accounts for 27%of all paid advertising spend, $231.8 billion is still spentannually on offline ads.2 The result for marketers is theneed for a consistent face and delivery of a relevantexperience for customers in any medium and at any stage

along the consideration process. This simply can’t beaccomplished with legacy organizational structures and iseven giving rise to a new breed of “integration agencies.”3

› One size does not fit all. Marketers are moving toward astrategy of one-to-one marketing that delivers highlypersonalized communications with consumers. 75% ofrespondents to our survey said that interest in one-to-onemarketing has increased within their companies over thepast year. That rises to 80% at companies with annualadvertising spend of $50 million or more. The benefitsrealized from such an approach are broad and tangible(see Figure 2).

› Data are the key. While the expectations of alwaysaddressable customers put tremendous pressure onmarketers, their behaviors offer the key to success

FIGURE 1The Marketing Funnel No Longer Applies In TheAge Of The Customer

Source: “The Always Addressable Customer,” Forrester Research, Inc.,September 26, 2012 and “The Customer Life Cycle: A Blueprint ForCustomer-Obsessed Enterprises,” Forrester Research, Inc., April 14, 2014

3

because each and every one of those interactions—accessing information, comparison shopping, socialnetworking, and purchasing— provides behavioral datathat can be captured by marketers. The marketers wesurveyed agreed: 84% said that customer data is theconnective tissue for omnichannel campaigns.

› Data guardianship is paramount. Headlines about databreaches have resulted in significant consumerawareness of and sensitivity to the importance of theirdata. As a result, Forrester believes that just asconsumers are now in control of the purchase process, sotoo will they take control of their data. Smart marketerswill embrace this move toward consumer data control anduse it to build bonds of trust with their customers.4

“You really have to be an expert at eachspoke in the wheel of offer managementand customer life-cycle management.”— Senior marketing data analyst, major telecommunications

firm

“When you look at our diverse audiencethat seeks different information, themore we cater to their interest anddesires, the more effective we’ll be.”— Vice president of marketing, university

Subpar Data Savviness And PrivacyConcerns Hold Back One-To-OneMarketing

While interest in one-to-one marketing is growing, especiallyin companies with the biggest marketing budgets, and thereis overall acknowledgement that one-to-one marketingbrings significant benefits, there remains a disconnectbetween that enthusiasm and marketers’ preparedness toembrace the opportunity. Our study found that:

› Marketers don’t feel prepared for the new paradigm.Only 23% of marketers surveyed believe that theircompany is “completely prepared,” and an even lower21% reported that their company’s current practices“completely align” with one-to-one marketing.

› Data are the connective tissue and the challenge. Theexplosion in and diversity of data are the reasons for thedisconnect between imperative and preparedness. Emailsign-up, website analytics, website registration, point-of-sale systems, offline direct mail, loyalty programs,eCommerce transactions, coupons and promotions,social listening platforms, and tag management platforms,to name a few, must be aggregated and normalized tocreate a 360-degree view of customers. But thesesources typically reside within discreet corporate siloes,often vying for C-suite mindshare and, therefore, aredisinclined to cooperate with one another. As the VP ofmarketing at a university told us: “We work fairly closelywith [other departments] but it’s separate, so there’sreluctance to share sometimes. We’re making strides, butthere are territorial things you need to work through.”Additionally, companies that have acquired firms over theyears find themselves with multiple discreet sub-sourcesthat don’t mesh, further complicating the situation.

› Data integration is a particularly prevalent obstacle.Integration of these various data sources remains an

FIGURE 2Marketers Agree On The Powerful Impact of One-To-One Marketing On Critical Metrics

Base: 103 B2C marketersNote: Answers of “don’t know” not includedNote: Percentages may not total 100 because of rounding.Source: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

4

ongoing and daunting challenge for marketingorganizations; 27% is the highest rate of “completeintegration” for any source (see Figure 3). Independentdata management technologies that offer support andservices can in essence guide companies towarddeveloping a holistic view of their customers through theaggregation and analysis of disparate data sources.Adoption of these technologies is low, however, and likelyto remain so for the foreseeable future, according tosurvey respondents. In fact, an average of only 30% ofsurvey respondents reported current use of one of thenine data management technologies we asked about (seeFigure 4).

› Customer privacy is getting a lot of attention.Complicating the situation is heightened awareness onthe part of marketers and companies as a whole of thedelicate nature of and consumer sensitivity to privacy andtheir PII. Of the marketers we surveyed, 78% said thatprotecting PII has risen in importance over the past year.51% reported that their company has a dedicated privacystaff. This is in contrast to the one-third of respondentswho reported that their company has no plans to hireanyone to support this need. When compared with theoverall results of this survey, it is clear that the need toprotect consumer privacy has ascended to the top of

corporate data concerns.

“We have several systems since we’veacquired companies over the years. . . Asfar as counting the sources, each one has[its] own ‘mini sources,’ so it would be inthe dozens, if not the hundreds.”—Senior marketing data analyst, major telecommunications

firm

Delight Your Customers By UnitingYour Data And Following The LeadOf Privacy Pioneers

The lack of preparedness, however, shouldn’t be taken asindicative of a lack of understanding of and appreciation forthe insights to be derived from the various forms of data

FIGURE 3Marketers Use Many Data Sources, But Few AreWell-Integrated

Base: 103 B2C marketersSource: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

FIGURE 4Adoption Rates Of Customer Data ManagementTechnologies Are Low

Base: 103 B2C marketersSource: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

5

available to marketers. Indeed, even the marketers wesurveyed who didn’t have particular one-to-one capabilitiesin place indicated a clear interest in sourcing and workingwith enterprise resource planning platforms, datamanagement platforms, data onboarding solutions, andmore (see Figure 5). Specifically, we found that:

› Actionable, integrated insight is a powerful tool. Evenwith limited data integrations, the marketers we surveyedexperience tangible benefits. They learn new andunexpected things about their customers and/orprospects as a result of, in particular, data mining andanalytics, the synchronization of data between and acrosschannels, and personalization technologies, which arearguably the backbones of true one-to-one marketing(see Figure 6). While information and insights arevaluable on their own, being able to go a step further andtest, learn, and act on insights to refine messaging andarrive at a measurable return on investment becomesvery compelling from a corporate perspective. Accordingto one digital marketing program manager Forresterinterviewed: “We had a pretty conservative estimate ofbenefits, but we found as high or higher success [thananticipated]. . . We just keep tweaking timing andfrequency [of messaging], which ups [our] success rates.”

› Many firms require help to make it possible. When weasked respondents specifically about one-to-onecapabilities their firms didn’t have in place, an average of64% reported that they don’t have the staff expertise ornumbers necessary to support them (see Figure 7). Tobuild on nascent success, these marketers with limitedinternal resources find themselves looking to third-partypartners with data integration expertise to guide them asthey expand their capabilities and help them maximizetheir ability to communicate on a true one-to-one levelwith their customers and prospects. As the digitalmarketing program manager for a major in-homeshopping network explained: “We could . . . benefit frompartners who tell us what we’re doing right and where wecan improve, but I think we’re prideful. . . But when we dothings ourselves, our team is very tapped for resources.”

› One-to-one marketers further differentiate themselveswith sound privacy policies. Increasingly, individualsseek out companies that they feel they can trust. Thesecompanies take their obligation to protect customer dataseriously and have transparent privacy policies and datapractices.5 Customer privacy is a highly specializedlandscape, often affiliated with legal and technology

teams but increasingly critical to marketing and brandingoperations because of its impact on consumer attitudesand behaviors. Our survey indicates that the larger themarketing budget, the greater the sensitivity to issues ofprivacy. 72% of companies with $50 million or more inannual advertising spend have staff dedicated toprotecting PII, versus only 51% overall. Once trust isestablished, marketers find that consumers are preparedto share more information, which, when integrated withother data, helps marketers achieve an even greater levelof personalization. It’s a virtuous circle where allparticipants win: Marketers are able to personalizemessaging that consumers feel is more relevant to theirinterests and desires, reinforcing the bond betweenmarketer and customer and demonstrating the power ofone-to-one marketing.

“We see between a 25% to 30% increasein sales when we personalize themessaging.”— CRM group manager, major telecommunications firm

FIGURE 5Marketers Are Planning For The Future

Base: 38-49 B2C MarketersSource: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

6

“We’re seeing a trend of users providingus with more information when wemake a point of demonstrating that wehave secure checkout and make ourprivacy policy prominently available.Some people are super protective, but Idefinitely think that others realize thatthe more we know about them, the betterthe offers they’ll get.”— Digital marketing program manager, major in-home

shopping network

FIGURE 6Marketers See Tangible Results From Their One-To-One Capabilities

Base: 51-90 B2C marketersSource: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

FIGURE 7Most Marketers Need Help In Order To Gain NewOne-To-One Capabilities

Base: 31-40 B2C marketersSource: A commissioned study conducted by Forrester Consulting onbehalf of Rocket Fuel, August 2014

7

Key Recommendations

One-to-one marketing, based on deep knowledge and a holistic view of customers and prospects, is the next step inthe evolution toward truly personal cross-platform digital experiences that satisfy consumers and deliver results formarketers. The single greatest source of that knowledge lies in the data that the marketer generates. Companies mustcoalesce around a data policy that supports the identification, aggregation, analysis, and deployment of that data forthe greater good of all the stakeholders, both internal and external, while maintaining a keen eye on the privacypolicies and practices that are so critical to a company’s brand perception.

This is not a casual investment. It requires a considerable commitment of time, effort, and corporate will. In return,however, companies will be equipped to efficiently and effectively create and enjoy strong bonds of loyalty and trustwith consumers. It is these bonds that transform consumers into brand advocates who actively participate with theirdollars and their voices in the building of world-class companies. To achieve this, companies must:

› Appoint a C-level data executive who will set a corporate-wide data strategy. Companies typically organizearound siloes of expertise. Only a C-level executive will have the power to enforce cooperation among the siloes,as well as coordinate with the legal and technology teams that must participate in any data deployment acrossthe organization. This is especially true with PII data.

› Identify all the data streams your company generates. Siloes, operating independently, frequently developtheir own proprietary data streams in support of their areas of responsibility. Email and CRM are perfectexamples. This is the raw material with which your data management partners will work. Look around yourorganization and identify all the various and sundry data streams and the platforms they work on.

› Assemble, coordinate, and focus your external partners. You will find that your various data streams haveresulted in a wealth of external partnerships. Analyze each for its worth under your evolving data structure,streamline these partners into a manageable group, and establish a set of priorities for each that feed into youroverall data strategy.

› Be prepared to be surprised. Executives in organizations that have experienced the data integration processconsistently reported that they have learned new and unexpected things about their customer base. Theseinsights may shock and/or delight as much as they will inform.

› Identify all the internal stakeholders likely to benefit from the intelligence you will generate.The beneficiaries of your integrated data will include those who had their own data streams, as well as otherinternal stakeholders whose work would benefit from the wisdom generated. For example, the data may revealstrengths and weaknesses in market segments that would influence product development and/or mothballing.

› Conduct a request for proposal (RFP) process to identify the third-party data resources you require.If, like the majority of our survey respondents, you will require third-party assistance in enabling one-to-onemarketing, the process of creating and conducting an RFP helps companies clarify their resources, needs, andexpectations, and then focus in on a selection of appropriate third-party vendors. Make sure that yourquestionnaire reflects your own corporate priorities, including offline data to be incorporated, PII that must bescrubbed, and the need to ingest and deploy mobile data, among other issues. Seek out a data managementplatform (DMP) with a specialty in your market sector: financial services, retail, consumer packaged goods, etc.Such developed expertise in your sector’s specific challenges will make your ramp-up more efficient.

› Staff up to maximize the insights derived. In order to derive the greatest benefits from the data integrationprocess, seek out the services of a data analyst who will enjoy digging into the data to uncover the nuggets ofgold that will inform and influence your strategy and tactics. You may find someone with the skills and inclinationon your own team. Alternatively, look for someone with DMP or financial services experience. They areaccustomed to working with data.

8

Appendix A: Methodology

In this study, Forrester conducted an online survey of 103 B2C marketers with at least manager seniority and with oversightof targeted marketing tools and technologies from a variety of industries in the US and Canada. Forrester also conductedfour 30-minute qualitative interviews of respondents from the same sample. Questions provided to the participants askedabout their current and planned practices regarding marketing personalization and customer data integration, their currentand planned investment in technologies supporting such capabilities, and the benefits and challenges they have experiencedin the implementation or expansion of such capabilities. Respondents were offered a small incentive, determined by theirrespective survey panels, as a thank you for time spent on the survey. The study began in June 2014 and was completed inAugust 2014.

Appendix B: Supplemental Material

RELATED FORRESTER RESEARCH

“DMPs Deliver Value To Early Adopters In A Nascent Market,” Forrester Research, Inc., October 10, 2013

“Evolving Consumer Attitudes On Privacy,” Forrester Research, Inc., July 28, 2014

“Prepare For A World Of Consumer-Managed Data,” Forrester Research, Inc., August, 29, 2014

Appendix C: Respondent Demographics

FIGURE 8Respondent Demographics

Base: 103 B2C marketersNote: Percentages may not total 100 because of rounding.Source: A commissioned study conducted by Forrester Consulting on behalf of Rocket Fuel, August 2014

“Which title best describes your positionat your organization?”

Manager40%

C-level executive (e.g., CMO)14%

Vice president14%

Director33%

“Which of the following best describes theindustry to which your company belongs?”

Transportation and logistics 1%Consumer services 3%

Consumer product manufacturing 4%Electronics 4%

Media or publishing 4%Telecommunications or utilities 4%

Insurance 4%Advertising or marketing 5%

Agriculture, food, and beverage 6%Other (please specify) 8%Travel and hospitality 9%

Healthcare 9%Education and nonprofits 10%

Financial services 15%Retail or eCommerce 17%

9

Appendix D: Endnotes

1 Source: North American Consumer Technographics Online Benchmark Survey (Part 1), 2014, Forrester Research, Inc.2 Source: “Forrester Research Interactive Marketing Forecast By Industry, 2013 To 2018 (US),” Forrester Research, Inc.,November 20, 2013.3 Source: “The Next Act For Agencies: The Post-Digital Agency Landscape,” Forrester Research, Inc., December 6, 2013.

4 Consumers are being given more and more opportunities to engage in personal identity and data management (PIDM)—the processes, procedures, policies, technologies, and architecture that manage data from definition to destruction, whichincludes transformation, governance, quality, security, and availability throughout its life cycle. Forrester believes this willusher a change in customer insights and marketing functions. In most organizations, security has historically been thepurview of legal and technology management teams. In this new era, cross-functional data stewards must managegovernance policies for all data within the organization. These policies will determine how much trust consumers put incompanies. Source: “Prepare For A World Of Consumer-Managed Data,” Forrester Research, Inc., August 29, 2014.5 Source: “Evolving Consumer Attitudes On Privacy,” Forrester Research, Inc., July 28, 2014.