Bad Santa on the High Street; and the lure of false gods

In these straitened times advertisers are treading on thin ice with their Christmas marketing strategies, writes Dominic Mills. Plus: The confusing problem of ‘personalisation at scale’

As the Advertising Association (AA) predicts Christmas adspend will hit £6bn this year, you might think this was bonanza time for all involved. Visions of agencies and media owners breaking out the bubbly spring to mind.

But as Bad Santa stalks the High Street, it feels a bit like the other way round: this is the year, like no other, that Christmas advertising has to prove itself.

The evidence isn’t hard to find. Earlier this month, the ONS reported the first annual fall in retail sales – down 0.3% – in four years. With the pound low, High Street prices are rising. At $64 a barrel compared to $27 two years ago, oil is on the up.

Interest rates have just gone up, and the Bank of England says that for every £20 extra consumers spend on interest payments, they cut spending by £10.

The stock market is factoring all this in, essentially predicting a grim time on the High Street. The FTSE 350 General Retailers Index (Next, M&S, Debenhams etc) is down about 6% over the last month, and the 350 Food and Drug Retailer index (Tesco, Morrison’s etc) is similarly dragged down by City worries.

At the same time we have the consumer splurges of Black Friday and Cyber Monday, one effect of which is to bring forward purchases that might otherwise be left until Christmas.
[advert position=”left”]
The thing that puzzles me then is why so many of the big High Street names have gone out so early with their Christmas ads, especially given that straitened times may see shoppers delay purchases in a bid to find last-minute bargains.

There are, I think, three dangers here for advertisers: one, consumers are fed up/bored with their ads by the time the real sales war is on them (Ok, I say this notwithstanding AA research that as a nation we’re complete wimps for Christmas advertising – a third of us look forward to Christmas ads more than any film release, WYFBI); two, they’re drowning each other out; or three, they’ve run out of media cash and they’ll have to raid the back of the sofa for some extra.

Either way, their chances of being top of mind are diminished by the time the real shopping season is on us. As far as I can see, just about every retailer has gone live with their Christmas special, apart from Iceland, whose big number is due to break next week. Thus it may still be on air while rivals have lost steam.

At the same time, the household squeeze may drive cost-conscious shoppers to more value destinations. Guess what, that means another bumper year for Aldi and Lidl.

Eurgh…personalisation at scale just confuses me

When I say I’m bothered by the phrase currently on everyone’s lips – personalisation at scale (aka PAS, because you can’t have enough three-letter acronyms) – I don’t mean I’m bothered in an existential way (a bit, perhaps). No, I’m bothered because I don’t understand what it really means.

The personalisation bit, obviously. Rather like Brexiteers voted for many different reasons, so I think there is no unanimous view on what constitutes personalisation. By which I mean genuine personalisation, as opposed to using a bit of search data here, online basket data there and then chucking in browsing data.

As a glib, ubiquitous, phrase trotted out to give the author a specious currency, it has overtaken Big Data (and there wasn’t much unanimity on exactly what that meant either). The consultants are barfing out ‘thought leadership’ pieces because they know a gravy train when they see one. Here’s some stuff from McKinsey and some more from Accenture.

And yet, although no-one agrees what it is, they are mostly agreed it is universally a good thing. Indeed, more and more clients are hanging their hats on it – like P&G here. But read this round table discussion among clients and it’s clear they’re not all talking about the same thing.

But even if marketers can agree what it is, three big questions remain. One, where’s the evidence consumers want it? Two, is it actually affordable? And three, does it/will it work? (And all that’s before we even get to GDPR and the consent hurdles it raises.)

Yes, surveys show consumers ‘say’ they would respond more to personalised messages. But ‘saying’ is not the same as doing. Personalisation is always just a fraction away from tipping over into creepiness. And clearly, from the data needed to the exponential increase in creative costs, it’s expensive. At what point do the returns – if there are any – fail to justify the means?

I take a fairly fundamentalist view of personalisation. It’s either personalised, or it’s not. There’s no in-between. This means that the messager needs to know the whole me, not just my limited interactions with the brand or from whatever partial data they can find.

And then the message needs to be recognisably for ‘me’. But get it wrong and I think it’s likely worse than not personalising the message. But even if they get everything right, I still might absolutely hate the intrusion.

The thing is, I don’t think this is what those who worship at the altar of PAS really mean. Deep down, what they really mean is micro-segmentation, where we will be put into small buckets of individuals and served one of, say, dozens or hundreds of possible creative treatments or offers.

Strip it all away, and the truth is that they don’t really know me, but they think they know my type; or the type that I used to be; or the persona I adopt in certain modes.

All of which doesn’t constitute personalisation at all in my book. And which makes me think they may be worshipping at the feet of a false god. One thing I am sure of though: this debate has only just begun.