2016 Trends in Personalization
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1 2016 Trends in Personalization Researchscape International Evergage, Inc.
2 2 SURVEY RESULTS PAGE 2 EXECUTIVE SUMMARY To help organizations better understand how personalization is being used today, barriers to adoption, and plans for the next 12 months, Evergage and Researchscape International surveyed 250 organizations of all sizes from around the world about their marketing operations and implementation of personalization. This annual study on the state of personalization found that 85% of companies are now implementing some form of personalization. However, most companies personalization initiatives barely make the grade, with the majority of marketers (55%) giving their own and their competitors (63%) efforts a grade of C or lower. When it comes to the importance of the marketing initiatives that organizations are implementing, search engine optimization (SEO) is very or extremely important to 79% of respondents, closely followed by marketing and content marketing (78% and 75% respectively) and personalization (74%). This level of importance indicates that personalization is approaching the mainstream, almost on par with more established marketing disciplines. Organizations that are not implementing any personalization yet, or that are just implementing personalization, were asked about their plans for the next year. Over half of respondents from these organizations (55%) plan to use website or in-app personalization (web or mobile) within the next year. Of those already using personalization, 89% report an improvement or lift, and of those, 53% have seen a lift of 10% or more. They are relying most heavily on personalized messages or experiences in inline content (53%) and information bars (48%). As a result, 35% of the respondents said their spending or budget for personalization will go up in the coming year, while only 4% `said it would go down. However, it is worth noting that those using personalization are largely utilizing rule-based targeting to segments (63%) versus a more advanced, algorithmic, 1:1 targeting strategy (22%). The findings from this year s study reveal that personalization has seen rapid and widespread deployment over the last 12 months, but now, companies must dig deeper into their initiatives, fine-tune what is working and pursue more sophisticated forms of personalization to generate even better results.
3 3 SURVEY RESULTS PAGE 3 DETAILED RESULTS When it comes to the importance of the marketing initiatives that organizations are implementing, search engine optimization (SEO) is very or extremely important to 79% of responding organizations, closely followed by marketing and content marketing (78% and 75% respectively) and personalization of all types (74%). Please rate the following marketing initiatives in order of importance for your organization. Sample Size: 208 (83% of Respondents) Personalization Usage and Plans 85% of organizations are implementing some form of personalization. A majority of organizations surveyed are personalizing (67%) and their website (56%). Only 27% are personalizing their mobile website. Mobile and web applications are the least selected channel for personalization (20% and 19% respectively). Are you using personalization in any of the following channels? (Select all that apply.) Sample Size: 226 (90% of Respondents)
4 4 SURVEY RESULTS PAGE 4 Organizations that are not implementing any personalization yet or that are just implementing personalization were asked about their plans for the next year: over half of respondents from these organizations (55%) plan to use website or in-app personalization (web or mobile) within the next year. Do you have plans to use website or in-app personalization (web or mobile) within the next year? Sample Size: 71 (28% of Respondents) Common Marketing Fears In a series of questions, respondents were given two scenarios and asked which is scarier to them: Marketers reported that incorrect personalization is worse/scarier than sending an campaign with a typo (71%). 40% of respondents said that personalization that misses the mark is scarier than a page not found 404 error on one of their secondary pages. The fear of the CMO is high: More than 4 in 10 (43%) of respondents said that personalization that misses the mark is scarier than forgetting to attend a meeting scheduled by the CMO. Nearly half (46%) find personalization gone wrong to be scarier than a higher-than-average unsubscribe rate on an campaign.
5 5 SURVEY RESULTS PAGE 5 What s scarier to you? Note: A series of 5 single-choice questions It s worth noting that some fears vary by company size. Organizations with over $1 billion in sales are much more fearful of personalization missing the mark than realizing an above-average unsubscribe rate on an campaign: 61% vs. 40% of everyone else. Companies with $1B+ in revenue Companies with less than $1B in revenue Note: A series of 5 single-choice questions 2016 RESEARCHSCAPE INTERNATIONAL
6 6 SURVEY RESULTS PAGE 6 Personalization Confidence and Satisfaction 42% of marketers surveyed are very or extremely confident that they have the tools they need for website and in-app personalization. How confident are you that you have the tools you need for website and in-app personalization? Sample Size: 213 (85% of Respondents) Overall, only one-fifth of all respondents (18%) are very or extremely satisfied with the level of personalization in their marketing efforts. Those not satisfied or slightly satisfied were nearly 2.5 times more in number (44%). Overall, how satisfied are you with the level of personalization in your marketing efforts? Note: Total does not add up to 100% due to rounding. Sample Size: 123 (49% of Respondents)
7 7 SURVEY RESULTS PAGE 7 Marketing managers and staff members are more satisfied with the level of personalization than all other groups: 31% of marketing managers are not satisfied or slightly satisfied vs. 52% of those with other titles. Many respondents are moderately satisfied with the level of personalization of each of the given channels, with satisfaction highest for mobile apps: 41% of respondents are extremely or very satisfied. This does not carry over to mobile website: only 25% are extremely or very satisfied. How satisfied are you with the level of personalization for each of the following channels? However, respondents see room for improvement, with the majority giving themselves a median grade of C. When asked to grade their current personalization efforts, 39% of respondents gave it a C, with 35% giving it a B. Only a handful gave it either an A or an F (9% and 4% respectively). What grade would you give your current personalization efforts?
8 8 SURVEY RESULTS PAGE 8 Directors of marketing are the harshest graders: 25% gave their company s current personalization efforts a D vs. 7% of everyone else. Rating competitors even more poorly than their own organizations: 42% of respondents gave competitors a C (vs. 39% of their own grades) and 30% a B (vs. 35%). Once again, only a few gave either an A or an F (7% vs 5%). What grade would you give your competitors personalization efforts? Usage The two most-used types of personalized messages are inline content (text or images inserted dynamically within the page content) and information bars (messages across top or bottom of page) at 53% and 48% respectively. Only 12% of respondents don't use any of the listed personalization message types. What types of personalized messages or experiences do you use? (Select all that apply.) Sample Size: 119 (48% of Respondents)
9 9 SURVEY RESULTS PAGE 9 Those who said they use other messages or experiences use CPQ/guided selling, rich messaging delivered to the website and app simultaneously, messages, video personalization, or are planning to implement the above messages/experiences. When it comes to personalization, the majority of respondents approach it with rule-based targeting to segments (63%) versus using an algorithmic 1-to-1 strategy (22%). Which approach to personalization do you utilize? Sample Size: 119 (48% of Respondents) Just over half of respondents use page/content viewed to target visitors or users in order to personalize the experience they have (55%), with location (47%) and navigation behavior (46%) following. Which of the following criteria do you use for targeting visitors or users in order to personalize the experience? (Select all that apply.) Note: Showing only the top 10 most selected options. Sample Size: 119 (48% of Respondents)
10 10 SURVEY RESULTS PAGE 10 Measurement 90% of respondents measure the benefits of personalization. Of those that do, the majority measure it through improvements in conversion rates (73%), revenue (41%), and time on the site and page views (35% each). Do you measure the value of personalization by improvements in? Note: Respondents could select multiple options Sample Size: 113 (45% of Respondents) The respondents that said they measure through other methods of improvement look at linkage to retargeting, renewal rate, application rate, deviations in average order value, deviations in average items purchased, bounce rate, click-through rate, reduction in support contacts, profit, click through and lead conversion. The majority of respondents using website/in-app personalization realizes the following benefits: an increase in conversion rates (65%), increased visitor engagement (62%) and improved customer experience (61%). Almost half (46% and 45% respectively) see increased lead generation and customer acquisition. Over one-third (36%) reported increases in customer lifetime value/loyalty.
11 11 SURVEY RESULTS PAGE 11 What are the main benefits you see from website/in-app personalization for your organization? Note: Showing only the top 10 most selected options. Respondents could select multiple options Sample Size: 112 (45% of Respondents) Overall, 89% of respondents reported an improvement or lift from website or in-app personalization initiatives. Of those, 53% saw a lift of over 10%. Just under half (42%) saw a 1-10% improvement or "lift" from their real-time personalization efforts, and a few saw massive improvements: 1% said they saw a % improvement due to their efforts. What percentage improvement or lift are you generally seeing from your website or in-app personalization efforts? Note: Total does not add up to 100% due to rounding. Sample Size: 113 (45% of Respondents)
12 12 SURVEY RESULTS PAGE 12 Investment in Personalization 35% of respondents said their spending or budget for personalization will go up in the coming year, while only 4% said it will go down. The majority (61%) expects it to stay the same. Compared to last year, how will your personalization budget/spending this year change? Sample Size: 142 (57% of Respondents) Of the respondents that came from an organization that had $1 billion+ in annual sales, 50% said that they will see an increase in their budget vs. 28% of everyone else. From all those who said that their spending or budget would go up, the median response was an expected increase of 18%, with 7% saying that they will see more than a 100% increase. Approximately how much do you expect it to increase, as a percentage change? Sample Size: 42 (17% of Respondents)
13 13 SURVEY RESULTS PAGE 13 Regardless of whether or not they are going to see an increase or decrease in their budget, respondents were asked about their staffing focused on personalization. Most of the respondents do currently have personnel focused on personalization (57%). Do you have personnel focused on personalization? Sample Size: 142 (57% of Respondents) Of those that do have personnel focused on personalization, more than half said that their responsibility was only part-time (56%). Is this your full-time responsibility or your part-time responsibility? Sample Size: 82 (33% of Respondents) Whether or not they currently have personnel focused on personalization, the majority of the respondents (58%) said they were not planning on adding any personnel full-time or part-time in the next 12 months to focus on personalization initiatives. About one-third didn t know what the future plans are.
14 14 SURVEY RESULTS PAGE 14 Are you planning on adding full-time or part-time personnel in the next 12 months to focus on personalization initiatives? Sample Size: 142 (57% of Respondents) Companies Not Currently Using Personalization The majority of respondents not yet using website/in-app personalization but who plan to do so in the next year anticipates the following benefits: an increase in visitor engagement (72%), improved customer experience (63%) and increased conversion rates (53%). Almost half (47%) see increased customer lifetime value/loyalty and improved brand perception. What are the main benefits you expect to see for your organization from website/in-app personalization? Note: Showing only the top 10 most selected options. Respondents could select multiple options Sample Size: 32 (13% of Respondents)
15 15 SURVEY RESULTS PAGE 15 Respondents also see the following benefits: Increased value of other marketing programs 34% Reduced churn/increased retention 31% "Makes me look good!" 25% The greatest obstacles to adopting website/in-app personalization by those organizations who have not adopted this initiative are the lack of effective solution/technology, budget constraints and lack of knowledge/skills/people (39% each). Why has your organization not adopted website/in-app personalization already? Note: Respondents could select multiple options Sample Size: 33 (13% of Respondents) Other reasons as to why the respondents organizations had not adopted website/in-app personalization included data issues or that they were getting there. Personalization as a Corporate Priority When all respondents were asked if they believed personalization should be a bigger priority in their organization than it currently is, 64% of respondents said yes, it should be.
16 16 SURVEY RESULTS PAGE 16 Do you believe personalization should be a bigger priority in your organization than it is currently? Sample Size: 165 (66% of Respondents) The greatest obstacle to making real-time personalization a bigger priority in the respondents organizations is the lack of budget (59%), with lack of personnel a close second (50%). Lack of knowledge/skills is the third most common obstacle (48%). What are the greatest obstacles to making website/in-app personalization a bigger priority in your organization? (Select all that apply.) Note: Showing only the top 10 most selected options. Sample Size: 106 (42% of Respondents) Demographics Marketing managers or staff members (32%) were the most common respondents to this survey, followed by directors of marketing (25%) and online/digital/web marketers (14%).
17 17 SURVEY RESULTS PAGE 17 Which of the following titles best reflects your role? The survey gathered results from over 16 different industries. Almost a quarter of the profiled organizations were in technology (23%), with retail (12%) and finance and insurance (6%) rounding out the top 3. What is your organization s industry? Note: Showing only the top 10 most selected options. The survey profiled organizations of all sizes. A solid quarter of organizations (25%) had more than $1 billion in annual sales.
18 18 SURVEY RESULTS PAGE 18 How large is your organization in annual sales? Option Response % Cumulative % <$1 million 11% 11% $1-9 million 11% 22% $10-49 million 14% 36% $50-99 million 6% 42% $ million 9% 50% $ million 9% 60% $1 billion+ 25% 85% I don t know 15% 100% Nearly half of the companies profiled identify as both B2B and B2C, while 41% concentrate on B2B only and 13% are B2C only. Technology firms were disproportionately B2B: 57% vs. 41% overall. Is your company B2B, B2C or both? Respondents from 15 different countries were included in the survey, with the vast majority of respondents located in the United States (85%).
19 19 SURVEY RESULTS PAGE 19 What country are you located in? Note: Showing only the top 10 most selected options. RESEARCHSCAPE METHODOLOGY Researchscape surveyed 250 respondents from 15 countries using an online study fielded from April 14 to May 20, The survey results were not weighted. Throughout the research process, Researchscape followed a Total Survey Quality approach designed to minimize error at each stage. Total Survey Quality, also known as Total Survey Error, recognizes that multiple sources of error can reduce the validity of survey research.
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