Did you know that when you shop on Amazon, the site knows, before you do, whether or not you’re going to buy that book you like?
Is this the power of magic or mind-reading?
Neither. It’s simply an in-depth understanding of the online data that are used by algorithms to simulate different scenarios depending on your digital footprint and your digital body language.
Amazon calls this “anticipatory shipping.” We can use the broader term “predictive marketing” to refer to all these techniques. These are analytical and anticipatory strategies designed to build a one-to-one relationship between a brand and a potential customer. This creates a more personalized customer relationship that opens up many avenues to explore.
What is predictive marketing?
The ever-growing volume of data supplied by website visitors (knowingly or otherwise) has encouraged the development of new targeted and customized tracking techniques. A ‘like’ on Facebook, a retweet, a comment on a forum, an abandoned basket, your purchase history, and clicks on ads or affiliate links – all these data are used to build a personalized profile of each user.
What is this profile used for? To present you with special offers that might interest you. Mass marketing is dead. Long live one-to-one marketing!
Predictive marketing relies on the ability of information systems to process thousands or millions of details in order to create, with your input, a unique sales journey consisting of products or services that interest you, or are very likely to interest you.
The key challenges for your business
If online sales are a major component of your business model, then you need to embrace predictive marketing. The goal is to sell the right product to the right customer at the right time – and more smartly. This way, you can boost your sales with a personalized offer that focuses on the user’s potential requirements.
The other challenge is to increase the effectiveness and scope of your marketing campaigns. A personalized ad or a targeted newsletter will have much more impact and generate high click-through and open rates if you adopt this predictive marketing approach.
When combined with programmatic marketing – which optimizes ad display, media buying, and management of your ad budget – your online marketing will be propelled into a whole new era.
The strength of predictive marketing lies in its algorithms, which can analyze visitors’ behaviour and consumers’ habits using data from different sources (CRM, DMP, cross-device tracking, analytics, third-party data, etc.) These data clearly identify which levers to pull to improve customer engagement and conversion, and ultimately boost your revenues.
A paradigm shift
Before venturing intopredictive marketing, it’s important to fully grasp and understand the customer journey and conversion funnel. This means you need to excel in all your processes, such as sales, promotion, communication, marketing, customer service, support and inventory management. Predictive marketing has a direct impact on every business function. So, this is an opportunity to upgrade your production facilities and experiment with a new approach that focuses on efficiency, productivity and profitability. Who wants to invest in marketing campaigns without being sure of the outcome? This is already an age-old question in the world of mass marketing.
Affiliate marketing gets predictive
Affiliate marketing is a key lever for performance marketing, so the latter will also be included in these new developments.
Advertiser-affiliate targeting is becoming more effective and precise with increasingly accurate data. This means that advertising budgets are being invested wisely to enhance the impact of affiliates’ efforts. Data are shared, processed and extrapolated to meet the requirements of the customer journey, which isn’t always easy to master.
Affiliate marketing is thus becoming a lever for predictive marketing, helping to fine-tune its targeting and send the right information to the right people and the right device at the right time to ensure unprecedented success.
Predictive marketing is revolutionizing the relationship between consumers and brands, as reflected by anticipatory shipping, personalrecommendation lists, playlist suggestions based on your profile, customized affiliate links, and personalized communications.
Various factors are already paving the way for the future of predictive marketing: the emergence of neurosciences, advances in artificial intelligence, and the ability of machines to communicate in natural language. Predictive marketing will be omnipresent: in our smart homes, our watches, our clothes and our cars. It will predict what you eat, generate your shopping lists or plan your next holiday, before you even think about doing it yourself. Welcome to the future!
If you liked this article, why not download our white paper“Everything you need to know to boost the performance of your digital campaigns”? If you enjoyed this article, you can also take a look at our performance marketing solutions or contact us to find out more!