Intent Data Can Sharpen Your Competitive Edge

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1 A Custom Technology Adoption Profile Commissioned By Magnetic May 2015 Intent Data Can Sharpen Your Competitive Edge Introduction Using intent data for customer acquisition and retention is important for marketers, but data challenges hold marketers back from utilizing the full potential of intent data. Winning the attention of new customers is only getting harder as media exposures proliferate and users become further desensitized to advertising. 1 Delivering meaningful and relevant messages to valuable prospects is one way to ensure that advertising makes an impact, and intent data can enhance digital advertising efforts when used appropriately for prospecting and retention strategies. In January 2015, Magnetic commissioned Forrester Consulting to conduct research on the benefits of utilizing data and adopting intent-driven advertising solutions for prospecting and retention. The research included a study of Forrester s existing data resources and a custom survey with 130 marketing professionals from firms with revenues at $10 million or greater in the US, the UK, France, and Germany.

2 1 Digital Disruption Is Hard To Master Digital has changed the game as we know it. Not only has it changed channels and customers, but it has changed the way organizations do business. To win, organizations must continuously exploit digital technologies to create new sources of value for customers and increase operational agility in their services. 2 Forrester predicts that spend for digital will account for more than $100 billion by And digital is already more than one-fourth of all advertising spend. Even though digital marketing and ecommerce have been around for over 15 years, most firms still can t harness the significant opportunity digital presents. About two-thirds of businesses, 66%, believe their competitive strategy is already somewhat disrupted by digital. And most firms are ill-prepared for digital disruption. Only 21% of firms have a clear vision for their digital strategy and the right executives to define it. Even less have the necessary technology, people, skills, and processes to execute their digital strategy. 4 Intent-Driven Marketing Offers A Possible Fix Applying intent data to advertising strategies offers one tactical way for marketers to use digital to their advantage. Marketers indicate a willingness to apply targeting to their digital advertising strategies. 5 Seventy-seven percent of marketers are spending more on remarketing and retargeting of shoppers in online ads than they did in previous years. To see how marketers valued data and targeting for customer acquisition and retention, Forrester surveyed 130 marketers from companies with $10 million-plus in revenue. The results were clear: Marketers in this study know that using intent data for targeting creates value. Seventy-eight percent of respondents believe that using intent data improves the relevancy of ads, and 67% of respondents agree that capturing search query information and using it for retargeting is valuable. Some efforts to use intent data are already underway. Study results show that 59% already have combined site and search retargeting strategies, and 57% are currently integrating first- and third-party data (see Figure 1). FIGURE 1 Most Marketers Already Apply Retargeting For Acquisition And Retention Which of these customer acquisition and retention tactics is your organization currently participating in? Please rate on a scale of 1 to 5 where 1 = not using at all and 5 = using very frequently. Not using at all Using very frequently 5 Search retargeting (using search data to retarget display advertising) Site retargeting (using site-level data to retarget display advertising) 7% 5% 24% 8% 9% 19% Combining site and search retargeting 7% 8% Integrating first- and third-party data 6% 13% 23% 41% 34% Even though advanced targeting efforts are well-adopted, marketers in this study still struggle with having the right data and understanding the value of different data sources. Respondents indicated that they use the same sources of data for both prospecting and retention. Additionally, a large majority of study participants, 64%, agree that they need better data to support their prospecting strategy. Data Is Highly Valued, But Sources Are Misunderstood 27% Respondents have a nuanced approach toward intentbased targeting. While they are aware that using intent data can improve the relevancy of advertising and acknowledge the value it can bring them, they also appreciate the difficulty of integrating data to create a unified customer view. Eighty-one percent of marketers in this study agree that analyzing customer data is a valuable way to predict consumer intent, and 70% agree that historical data improves the relevancy of advertising served to prospects. Sixty-four percent believe that by combining site-level data and search behaviors, marketers have a greater ability to reach audiences across the consumer funnel. Overall, survey respondents recognized key challenges associated with finding new customers (see Figure 2).

3 2 FIGURE 2 Respondents Indicate Customer Acquisition Is A Key Challenge FIGURE 3 Most Respondents Prioritize Demographic And Site Interaction Data Please indicate your level of agreement with the following statements. Please rate on a scale of 1 to 5 where 1 = completely disagree and 5 = strongly agree. Completely disagree Strongly agree 5 Reaching new prospects is more challenging than retaining customers I need better data to support my prospecting strategy Combining first- and third-party intent data is important but challenging 8% 19% Organizations have the opportunity to leverage various data types at different stages of the consumer life cycle, yet survey results indicate that data sources are typically either over- or under-utilized. Marketers in this study reported that they rely on demographic or contextual data and site interaction data for customer retention. They also reported that the same data types are most valuable for acquisition as well (see Figure 3). There are other data sources such as search and shopping cart behaviors that study participants do not utilize as often to identify intent. In fact, respondents indicated limitations in three areas (see Figure 4): Data. Respondents indicated that issues of data quality and data integration hold them back. Fifty-six percent reported inaccurate data, and 49% have limited ability to integrate first- and third-party data. Technology. Fifty-four percent are unable to integrate intent data into targeting technology. And almost half of respondents lack the technology used to acquire and retain customers. Expertise. Fifty-two percent have limited headcount and expertise to use intent data to connect with users at critical points of the customer journey. 4% 5% 10% 30% 37% 3 27% 45% 16% How valuable are these sources of data for customer acquisition and retention? Please rank by order of importance for each. (Percentages shown are only representative of responses for rank 1. Ranks 2, 3, 4, 5, and 6 are not shown.) FIGURE 4 Retention Demographic/contextual data Site interaction data Geographic/location data Shopping cart behavioral data Search data Cross-site behavioral data Respondents Face Challenges With Intent Data What challenges does your organization face using intent data to connect with users at critical points of discovery? Please rate on a scale of 1 to 5 where 1 = not a challenge and 5 = a critical challenge. 4 A critical challenge 5 Inaccurate data Inability to integrate intent data into targeting technology Inability to find scalable solutions for prospecting and retention Limited ability to integrate first- and third-party data Attribution model is too complex to use Inability to gain insights from data Lack of technology used to acquire and retain customers 7% 8% 11% Acquisition 31% 28% 16% 33% 33% 38% 34% 40% 16% 20% 1 21% 14%

4 3 Marketers Place Bets On The Benefits Of Intent Data Respondents in this study indicated that reaching new customers is more challenging than retaining them. But they also believe that intent data can provide a competitive edge (see Figure 5). The majority of marketers in this study believe that data-driven advertising is becoming more effective for customer acquisition, and that combining sitelevel data and search behaviors enhances their ability to reach audiences across the purchase process. FIGURE 5 Intent-Driven Advertising Enhances Marketing Across The Consumer Funnel Please indicate your level of agreement with the following statements. Please rate on a scale of 1 to 5 where 1 = completely disagree and 5 = strongly agree. Completely disagree Strongly agree 5 Data-driven digital display is becoming more effective at customer acquisition Using intent data for prospecting andretention would give us an advantageover our competition Combining site-level data and search behaviors enhances the ability to reach audiences across the consumer funnel 10% 5% 3% 9% 19% 23% 46% 4 45% 19%

5 4 Conclusion Marketers in this study appreciate that applying intent data can strengthen their marketing efforts, but they have yet to leverage intent data to its full potential. The combination of intent data and digital marketing can be one way to help marketers deliver relevant and meaningful brand experiences that influence new and existing consumers, but only if marketers overcome data challenges and make the best use of their varying data sources for both prospecting and retention. Methodology This Technology Adoption Profile was commissioned by Magnetic. To create this profile, Forrester leveraged existing Forrester data. Forrester Consulting supplemented this data with custom survey questions asked of 130 marketers responsible for in the US, the UK, Germany, and France. Survey respondents involved were at the manager level or higher and came from companies whose 2014 revenue was $10 million or more. The auxiliary custom survey was conducted in February For more information on Forrester s data panel and Tech Industry Consulting services, visit Endnotes 1 Source: The Power Of Customer Context, Forrester Research, Inc., April 14, Source: Digital Business Transformation: Lessons From The Pros, Forrester Research, Inc., December 11, Source: US Digital Marketing Forecast, 2014 to 2019, Forrester Research, Inc., November 4, Source: The Future Of Business Is Digital, Forrester Research, Inc., March 10, Source: The State Of Retailing Online 2014, a Shop.org study conducted by Forrester Research. ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester s Consulting services connect you directly with research analysts who apply expert insight to your specific business 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 to change. Forrester, Technographics, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to [1-SYDJBG]

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