2020

MARKETING
I M P E R AT I V E S

Hyper-Personalization and the

Connected Customer Experience
“As a challenger brand in the automotive
market, Mitsubishi’s 2020 focus is driving
business through CRM, making sure every
touchpoint counts throughout the customer
experience. Our goal is to be smarter, more
efficient, and more targeted with every
customer interaction, from introduction to
win-back and every stage in between. We
are excited to work with Merkle, whose
expertise allows us to leverage best-in-class
people-based marketing strategies to gain
and sustain competitive advantage. And the
2020 Marketing Imperatives serve as an
invaluable guide to achieving the next level
of hyper-personalization to deliver that total
customer experience.”

—Kimberley Gardiner,
CMO, Mitsubishi Motors NA
FOREWORD

2020 MARKETING IMPERATIVES 1

Welcome to the 2020 Marketing Imperatives.

Hyper-Personalization
and the Connected
Customer Experience

Year after year, this resource for the customer-focused marketing

leader evolves to bring you Merkle’s latest thinking around our core
pursuit: placing people at the heart of the business strategy. Our
goal is to stimulate your thinking toward the future of marketing
while providing actionable ideas that can impact your business in
the short term. Each installment of the Imperatives is designed not
to replace, but to build upon the previous one and, ultimately, to
strengthen your ongoing approach to people-based marketing.

The 2019 imperatives that inspired integration are still very

relevant, as they pertain to the alignment of the customer strategy,
the implementation of the technology stack, and execution of the
customer-based strategy in the market. Marketers are still on the
road to delivering upon the promise of people-based marketing.
But as the marketing landscape and consumer expectations
continue to evolve, it has become clear that we need to do more.
Today’s savvy consumers have much more control than they did
just a few short years ago, largely due to concerns over privacy
and choice. They are exercising control over their own data, the
content they want to consume, the experience platforms they

2 2020 MARKETING IMPERATIVES

prefer to use, and the brands they wish to interact with on a daily
basis. Their exposure is no longer limited to whatever happens to
interrupt their TV programming or which billboards catch their eye
while driving. As marketers, we have to adjust our own mentality
to be “consumer first.” And that’s not just about addressability; it’s
about willfully thinking about the consumer with every decision we
make across the enterprise.

Every CMO’s success will hinge upon achieving that next level of
hyper-personalization and playing a leading role in the direct-to-
consumer revolution. You’ll achieve this by learning how to master
identity, balancing the mix of in-house and outsourced skillsets, and
yes, delivering a total customer experience.

I hope you find this year’s Marketing Imperatives thought-

provoking, and I challenge you to become a champion of the
concepts within it, across your entire organization. As your
customers begin to feel like you understand them with every
distinct interaction, you both will reap the benefits of your
emphasis on the total customer experience.

DAVID WILLIAMS
Chairman & CEO
Merkle

2020 MARKETING IMPERATIVES 3

 CONTENTS

4 2020 MARKETING IMPERATIVES

7 EXECUTIVE SUMMARY

11 IMPERATIVE ONE
Deliver the total customer experience
Marketing now is responsible for growth and must
stretch its purview to include ownership of customer
data and the overall customer experience. This
can’t be achieved without a clear connection to all
customer-related business functions: sales, service,
finance, logistics, product, channel etc.

27 IMPERATIVE TWO
Take ownership of identity
Brands have a common vision of right time, place,
person, and message delivered in real time across
the customer journey, while also providing more
effective, hyper-personalized service and commerce.​
This vision is only as good as a company’s ability to
know who it is really talking to at every touchpoint.​

41 IMPERATIVE THREE
Enable agility through strategic sourcing
Calibrating the marketing resource mix is no longer
solely about cost. It is also driven by more strategic
priorities, including agility, accountability, and
innovation. This is not an either/or decision between
bringing everything in-house or relying exclusively on
external partners. There is a continuum of possible
combinations across function, source, and location. ​

54 CONCLUSION

2020 MARKETING IMPERATIVES 5

 EXECUTIVE
SUMMARY

6 2020 MARKETING IMPERATIVES

The identity revolution
Standing at the threshold between two decades,
we find ourselves at a turning point in the way
we approach people-based marketing. The
decade behind us was all about digital; the next
one will be about identity. The equation that
comes to mind as we bring those two powerful
forces together is that digital transformation plus
data transformation equals customer experience
transformation. If you can nail your digital
capabilities and maximize your data assets and
analytic skills, then you can transform into a highly
customer-centric organization, using technology
to enable the personalized experiences that build
strong bonds with customers.
But as marketers, we must wrap our heads around the fact that,
in the world of customer experience transformation, marketing is
really just one piece of it. The total customer experience includes
every interaction the customer has with the brand, from marketing
to sales to service and everything in between. Marketing has
traditionally owned advertising and communications, but we need
to expand the reach of our influence and our skills to inform other
aspects of the customer experience. And the only way to deliver
that total experience is to know the customer.

Forces like the direct-to-consumer business model are taking the

need for personalization to a new level. Netflix, Uber, Dollar Shave

2020 MARKETING IMPERATIVES 7

Club, and their ilk have materially changed customer expectations
around the ways they interact and engage with brands. CMOs
find themselves navigating these forces, while at the same time
adjusting to increased privacy concerns, as General Data Protection
Regulation (GDPR) and California Consumer Privacy Act (CCPA)
spark further regulation. The CMO is in the driver’s seat of a major
pivot in the marketing approach that must be carried out across
the entire organization. Hyper-personalization means targeted,
relevant experiences at every encounter, encompassing the brand
as a whole. Consumers consider all of these touchpoints part of
the connected customer experience, and the role of the CMO is
evolving to influence it.

The CMO role evolves

With the transformation of marketing comes the transformation of
the skillset of the CMO. From the 1950s to the early 2000s, CMOs
were all about the brand. Then, with the digital and performance-
based capabilities enabled by digital, they needed to understand
technology and deliver quantifiable results in their programs. Now,
they’re taking the leap to the next stage. Today’s CMO is a business
person who has accountability for revenue and costs to drive
overall growth and profits for the organization. Many CMOs now
have a pathway to become CEOs, which was unheard of in the past,
because of the broader business skillsets required.

The 2020 Marketing Imperatives will help you attack this new
reality, using data, analytics, and technology to enable hyper-
personalization that will drive the total customer experience.

8 2020 MARKETING IMPERATIVES

Deliver the Total Customer Experience
In our always-on, real-time culture, consumers expect
their interactions to be frictionless and relevant. In order to
be successful in that realm, you need to understand them,
anticipate their needs, and use ever more engaging levels
of personalization in the ways you connect with them
across any customer touchpoint.

Take Ownership of Identity

The ability to deliver that experience relies upon your
capacity to master identity and agility in a world where
you’re competing against digitally native brands that have
built their business solely upon the exchange of information
for the products or services they provide. Sure, for most
companies, customer centricity has long been a core
tenet of the marketing function. But this magnitude of
transformation requires a level of hyper-personalization that
surpasses anything we’ve seen in the past. It means that
our relationship with a customer transcends marketing, and
it’s wholly dependent on the concept of identity as enabled
by data, analytics, and technology. It is the fundamental
building block to delivering those experiences that are
incredibly relevant to the consumer and create incredible
outcomes for brands.

Enable Agility Through Strategic Sourcing

Today’s marketer who delivers the customer experience
across marketing, sales, and service needs a vast array of
capabilities and competencies to deliver on that customer
experience. It’s imperative that they determine their
optimal mix or supply chain of resources to support those
goals. Some will be what they hire for directly themselves,
some will be what they imbed from third parties into their
organizations with unique skillsets, some will be done by
agency partners, some onshore, some offshore. Optimal
mix of resources will take a broad supply chain across
those dimensions to be successful.

2020 MARKETING IMPERATIVES 9

IMPERATIVE ONE
DELIVER THE TOTAL
CUSTOMER EXPERIENCE

2020 MARKETING IMPERATIVES 11

deliver the total
customer experience
Understanding the importance of
a specific experience

Managing the customer experience is

one of the hardest things that a marketer
needs to think about in today’s complex,
multi-touchpoint world. In many cases, the
brand driving the experience either 1) doesn’t
have insight into the customer at the point
of delivering the experience or 2) doesn’t
understand how the customer is making a
decision and where the critical points of the
experience exist.
We find that most marketers today are thinking of customer
experience through the lens of what they send the customer or
what they want the customer to do. This tends to fragment the
experience across channels, touchpoints, and, in many cases,
marketing goals.

Marketers need to start thinking about inbound touchpoints as

much as they do outbound. This means breaking down the internal
silos at an organization and prioritizing the experience of the
customer across your different internal teams. It means aligning

12 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

corporate goals and business objectives through a new set of

key performance indicators (KPIs) that are based on building
deeper customer relationships. Simply put, it means pushing your
organization to think about the full customer experience, not just
what you send to them. Making this shift requires focusing on the
value of each interaction with the customer, ensuring differentiation
in every engagement with your brand, product, or service and
creating bonds that stand out among other relationships.

When we start to think in that context, it is helpful to consider the

intersection of the value of a product to the customer, the cost
or utility of the product, and the mindset of the customer when
engaging in the experience.

As an example, think about a consumer at a retail store trying to

decide on a new television purchase. Today’s consumer can obtain
information on the television in real time, while standing next to the
display model and without needing to talk to a store associate. As
a marketer, you must ensure that you’re serving the need of the
consumer during this critical decision-making moment and in the
right place, even though you will likely not be able to track sales
as a direct result of your work, as you can with online purchases.
To complicate it even more, consumers in situations like this have
likely either had a prior experience that is leading to their decision,
or they have been influenced in their mindset by reviews, friends,
or other information online. As a marketer, you need to be thinking
about the needs of your potential customers while they are in the
store, what types of information may be displayed in person, and
what questions they may need help answering. You also have to
consider the experiences that they have come to expect from other
providers. Is your website conducive to product comparisons? Does
the mobile site have a smooth customer experience like Amazon
or Best Buy? Can the key information be found quickly and easily,
while the customer is standing in front of the product? These are
all things that now need to be part of a marketer’s thought process,
centering on the customer and not the short-sighted business goal
of driving sales.

2020 MARKETING IMPERATIVES 13

 Deliver the Total Customer Experience

To evaluate the type of experience in this way, Figure 1.1 illustrates

a framework to help you visualize how you should approach your
focus areas:
Figure 1.1: Determining the Expectation and Key
Touchpoints for the Customer Experience

LENGTH OF PRODUCT UTILIZATION

VALUE OF PRODUCT

Anonymous Identified (call center, in-

(e.g., in store) person interaction)
Proxied (owned properties, third-party content)
low AMOUNT OF CONTROL high

Behave in a customer-first manner

The tenet of “customer first,” which makes customer needs a
key pillar of the business focus, is the core strategic agenda for
any organization. Making this shift is not easy, and doing it at the
pace required to preserve customer relevance is even harder. It
often requires a change in mindset, an evolution of capabilities,
and a transformation in how the business behaves, works, and is
measured. This means business dimensions and KPIs must work
in harmony around a clear customer strategy, with unambiguous
measures to ensure that the business can deliver in an increasingly
agile manner.

14 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

Figure 1.2: Linking the

Customer Value Chain

CX VALUE
TOMER STRATEGY
CUS

CAPABILITY
Trust People

ACTIVATION
PERSONALIZATION

Ways of working
ORGANIZATION
Authentic

ORCHESTRATION
BRAND

CRM -+
CIM

DECISIONING
ANALYTICS
ID MANAGEMENT
DATA

Process
Relevant

ME IZE
ASUR
E AND OPTIM

Campaign Value Customer Value

Marketing Business Value

Although there are many aspects of the capability spectrum that

must come together, as referenced in Figure 1.2, defining the total
customer experience is a core building block. The first requirement
for making this happen is the ability to recognize customers across
every interaction, enabled by an underlying identity platform. The
next is the ability to execute more personal experiences in an agile,
collaborative way.

2020 MARKETING IMPERATIVES 15

 Deliver the Total Customer Experience

Define the “total customer experience”

We are witnessing an evolution in customer focus that started
way back with a personal, one-to-one experience where, although
selling was the end objective, interactions were very personal and
oriented toward meeting a customer’s need. The sale, in many
ways, was a by-product of meeting this personal need.

This approach has been replaced by the current era of

personalization, which is often a single-channel scenario and
usually measured not by the customer’s experience, but by the
funnel conversion in that channel. The primary measure of success
is not customer delight, but rather a collection of interaction-led
funnel metrics. In this age, the channel experience has become
personalized, but the customer has become invisible – lost
between device identifiers, cookies, and fragmented elements of
personal customer data.

The experience pendulum is still swinging, and it’s moving from a

focus on specific entities within a channel to the whole customer
experience. It recognizes that the customer experience and
subsequent perception of your brand is defined by the sum total
of all (recent) interactions with you. Customers don’t live in adtech
and marketing tech. They experience every touchpoint, and often
the experiences that are the furthest from the current marketing
focus have the greatest impact on a customer’s perceptions and
willingness to remain committed to a brand.

Delivering a personal experience at scale requires the intelligent

interpretation of many different sets of data, all describing some
state of the customer journey (see Figure 1.3). Data must be
available to teams outside of marketing, including sales and service,
to provide the right experience across those touchpoints. Think
about the previous example of the television purchase. The key
drivers in that decision are product value information, reviews, and
recommendations from other customers and industry review sites.
Those reviews are based on not just the purchasing process, but

16 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

Figure 1.3: Evolving Experience Capability

One-on-one Age of PERSONAL at

PERSONAL – “sell PERSONALIZATION – scale – “sell without
without selling” optimize conversion selling”

Need

Personal Personal
Experience Experience

Targeted
Experience

Sell
Yesterday TODAY Tomorrow
Advertising Tech
Marketing Tech
Sales Tech
Service Tech

also the customer service, sales support, and the functionality of the
television to achieve the needs of consumers. Every one of those
reviews influences the consumer’s perception of the brand and in
some manner the likelihood to buy or not buy your product.

2020 MARKETING IMPERATIVES 17

 Deliver the Total Customer Experience

The marketer has the data necessary to inform better exchanges

in each of those areas, but currently is not motivated to provide
the relevant data to the sales, servicing, and product development
efforts that will affect the customer experience in a new way. As
we start to think differently about marketing and customer data,
we need to be developing ways to incentivize data sharing at an
individual level that can improve the overall customer experience
across the entire relationship with the enterprise. With the ever-
evolving regulations about how companies can use consumer
data, marketers need to be asking for more from customers, using
new approaches that drive value to both sides. Customers want
better experiences and are willing to exchange data to get them.
What they don’t want is someone constantly asking for things that
don’t seem to matter. You as a marketer need to decide which
information is critical to both of those value points.

Not all businesses are created equal with respect to data, which
is a by-product of their customer model. Consumer packaged
goods businesses, for example, don’t have the same ability as
insurance companies to track consumer sales. (This is fueling the
hefty price tags paid by Edgewell and Unilever to acquire direct-
to-consumer businesses like Harry’s and Dollar Shave Club etc.,
through which they achieve this). They also don’t have the same
service requirement as a telco, utility, or automaker. In these cases,
customers are so reliant on the product in their daily life, there is
a high potential for disappointment if brand promises aren’t kept,
hence the difference in consumer satisfaction rankings between
CPG companies and telcos.

Value is not based only on the most recent channel experience.

It’s composed of pillars across the buying, service, product, and
brand experience. Through these, we need to find the right balance
between being personalized and being personal (see Figure 1.4).

With identity at the core of every marketing touchpoint, you will

start to see more patterns of behavior at an individual level that can
lead to more personal experiences. You should be putting in place

18 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

Figure 1.4: Shift from Personalization to Personal

Memorable
Trustworthy & Imagery, experience,
Enjoyable and wow factor
Through relevancy
and transparency

BRAND
EXPERIENCE

BUYING PRODUCT
EXPERIENCE EXPERIENCE

Easy
Caring Simplicity through
SERVICE
Pre-empting challenges being frictionless
EXPERIENCE
with proactive support

data capture procedures that allow you to develop experiences

in more dynamic ways. Start by thinking of the various potential
touchpoints, then focus your efforts on the data that you can
capture on your own. Ask yourself some questions to guide your
decision. For instance: Should you track every site interaction or
just the ones that tend to lead to deeper engagements? When
should you interrupt the customer-driven experience with a brand-
driven experience? How does a customer behave differently before
viewing a product vs. after? Once you have identified the key
points of insight, you need to employ technology that can keep
pace with the customer. A dynamic, artificial intelligence (AI)-driven

2020 MARKETING IMPERATIVES 19

 Deliver the Total Customer Experience

creative experience then becomes paramount to your success. Your

execution plan should be based on known points of friction for your
customers. Do they have enough information to make a decision?
Do they have the information on where and how to engage with the
brand? Do you reach out to them immediately after an interaction or
give them time to complete other research? Each of these questions
has a different answer, based on the person and his or her prior
interactions with you. You can’t just put a dynamic content site in play
and let it run. You need the experience to be dynamic and not just
deliver static creative. You need to allow interactions in one place to
drive how you communicate back to the customer in all channels.

Address the total customer experience

Thinking customer first and focusing on the total customer
experience requires a clear strategy, a connected set of capabilities,
and often a mindset change.

Genuinely thinking customer first means recognizing that every

customer is on some journey and is somewhere on a lifecycle with
your business, irrespective of where in your organizational structure
they might be engaging right now. So thinking from your business’s
perspective, customers or prospects fit into one of four stages, as
illustrated in Figure 1.5.

You are either trying to win them over for the first time, keep them
engaged, grow them, or re-engage them. The reality is that the
majority of marketing spend is concentrated in the FIND and WIN
stages, but the real customer value is generated when those
customers are kept active and grow over time. Lifetime value is
where the ROI from marketing spend really kicks in. And that value
is far more likely to grow if you focus on meeting the connected
needs of your customers at every stage of their journey and in
whatever interaction they are having with you (a refund, shopping
for something new, an inquiry, a change of circumstance, a
complaint, etc.).

20 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

Figure 1.5: Focus on Key Stages

Acquisition – SUSPECT
Lead generation
Not in market
FIND

In market

PROSPECT

Researching

Lead
WIN

Dormant

Retention –
Repurchase Welcome
optimization
and loyalty CUSTOMER

Advocacy
KEEP & GROW

Warm

Neutral

Negative

At risk

Re-activation
WINBACK
WINBACK

Proactive

Reactive

2020 MARKETING IMPERATIVES 21

 Deliver the Total Customer Experience

When focusing on the customer experience, you must consider

each of these stages in a more holistic manner. You need to be
able to recognize when a customer has already made a purchase
based on prior actions, not just when you have sales data. You
can do this by observing how known customers behave when
they have moved between each of these stages and applying that
knowledge to customers that you don’t know, based on similar
actions. As an example, assume that 70 percent of people who
have already purchased a product go to your mobile site the day
after purchase to get installation and setup instructions. You then
see a group of customers who have visited the site frequently for
the past three weeks but go dormant. If they later come back to the
site and search for the product, you should make those instructions
prominent in the experience, based on the idea that they may have
made the purchase somewhere besides the website.

Delivering on this total customer experience is about a balance

of all capabilities, hard and soft, and it can be achieved in an
incremental and scalable way. It doesn’t have to be a big, complex,
cross-business plan. It requires a clear customer vision, an ability
to connect customer experiences across every relevant channel,
unambiguous measures of a connected customer experience,
and an agile business able to think big, start small, and then
operationalize ideas into action.

It requires an integrated set of capabilities, through which to build

the experience landscape and connect, create, and deliver the right
customer experiences (see Figure 1.6).

22 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

Figure 1.6: Integrated

Experience Stack

CUSTOMER INTERACTION

Email Site Search Display CC Social Offline

PERSONALIZATION

DELIVER THE
EXPERIENCE
ORCHESTRATION

AD ENGAGEMENT SALES SERVICE

TECH TECH TECH TECH

Production Asset
Creative
Rights Material Management

DECISIONING
CURATE THE
EXPERIENCE

DATA DATA
INFORMED FUELED

DATA IDENTITY
CONNECT THE

ENRICHMENT RESOLUTION
EXPERIENCE

DATA COLLECTION

2020 MARKETING IMPERATIVES 23

 Deliver the Total Customer Experience

In summary
In the past few years, the role of marketing has shifted noticeably,
taking on ownership for customer engagement, satisfaction, acquisition,
retention, and lifetime value. That means marketing now is responsible
for growth and must stretch its purview to include ownership of customer
data and the overall customer experience. This can’t be achieved
without a clear connection to all customer-related business functions:
sales, service, finance, logistics, product, channel etc.

A number of obstacles can slow down your progress toward the

creation of relevant and engaging customer experiences:
– Focusing on channel experiences – Neutralize your marketing
bias and focus on the total customer experience, rather than
fixating on brand metrics.
– Attempting too many channels at the same time – Omni-
channel, which suggests every channel and everywhere, can
be overwhelming, resulting in frustration and failure. Take a
channel+1 approach, which starts out using what you have, rather
than waiting for new capabilities. It is faster, easier, and more
closely aligned to an agile way of working.
– Believing that technology will solve this for you – The tech is
an important enabler, but it requires the alignment of numerous
business activities to make it real.
– Measuring brand metrics over customer experience – Since
you get what you measure, if we measure what matters to
customers, we are most likely to get customers who care, which
gives us a solid foundation to align the business around. If we
measure conversion metrics in individual channels (i.e., metrics
that the brand wants to track, rather than those customers
care about), then we may get channel-based efficiencies, but
disenfranchised customers.
– Thinking that every customer interaction has to be an
immersive experience – Some experiences need to be invisible,
and often, those are the most important in meeting the total
customer experience objectives.

24 2020 MARKETING IMPERATIVES

 Deliver the Total Customer Experience

– Perpetuating the organizational silos that stall progress –

Functional divisions that exist within most businesses act as barriers
that separate customer experiences. Only when these silos are
dissolved can the experiences be truly and seamlessly connected.

This is more than marketing. It’s about the customer, and it’s what Jeff
Bezos calls an “obsession with the customer.” Amazon is excellent at
facilitating a purchase, is generally flawless in its delivery, and makes it
easy for a customer to give feedback on every stage of this journey. This
experience is underpinned with a genuinely no quibble return policy,
making it almost as easy to return a product as it was to buy it. They do all
of these stages in a connected way, with the customer front and center.

Bezos once said, “Customers are always beautifully, wonderfully

dissatisfied, even when they report being happy and business is great.
Even when they don’t know it, customers want something better, and
your desire to delight customers will drive you to invent on their behalf.”

So, even though Amazon ticks these boxes today, Bezos and his team
fully recognize that what got them here is probably not good enough to
get them to their desired future state, so they are continuously looking
to optimize, evolve, and disrupt their total customer experience.

We see this as a continuously evolving process of making things

work – quickly – then setting about to automate, optimize, and make
experiences better. And to keep making them better. And finally, by
institutionalizing these activities, to deliver a connected customer
experience that drives lifetime value.

Figure 1.7: Experience is Constantly Evolving

Make it WORK Make it BETTER Make it BIGGER

Deploy the platforms, Automate, connect Institutionalize,
setup, data connection, Channel +1, integrate, transform, full customer
taxonomies, use case enhance analytics, strategy, umbrella KPI
proving content velocity, wow framework, scale fast

2020 MARKETING IMPERATIVES 25

 Take Ownership of Identity

26 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

IMPERATIVE TWO
TAKE OWNERSHIP OF
IDENTITY

2020 MARKETING IMPERATIVES 27

take ownership of
identity
Understanding customer journeys and
delivering great experiences​

Customer centricity has never been more

important to businesses, but all are faced
with an identity challenge. Brands have a
common vision of right time, place, person,
and message delivered in real time across
the customer journey, while also providing
more effective, hyper-personalized service
and commerce. But this vision is only as
good as a company’s ability to know who it is
really talking to at every touchpoint.
At the same time, unprecedented changes are taking place around
US privacy regulations, beginning with the 2020 rollout of the
California Consumer Privacy Act (CCPA). Due to the influence
of consumer privacy concerns, big marketing tech players like
Google, Apple, and Facebook are deprecating third-party cookie-
based tracking and data use for targeting. They’re building their
walls higher, enticing marketers to use their versions of identity
for audience creation, targeting, and measurement. Marketers are
witnessing the collapse of the open third-party cookie as the long-
standing currency of the digital marketing and media ecosystem.

28 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

As this is playing out, new winners have emerged by placing

person-based identity and hyper-personalization at the center
of their businesses to drive sustainable, personalized value
exchanges with customers. Companies like Amazon, Netflix, Uber,
and Airbnb have transformed how brands are built and the ways
that commerce and service are delivered, spawning a direct-to-
consumer revolution across almost every industry. And today’s
person ID-based media ecosystems, such as AT&T and Warner
Brothers’ Xandr and Verizon Media (Verizon, AOL, Yahoo), are
giving rise to a new generation of brands that are cookie-less from
the start. These companies and many others are developing identity
using PII-based identifiers from subscriptions, service, and content
consumption as one ID at a person level. Their hyper-personalized
approach to customer engagement is winning the battle for the
person ID among cross-screen content, commerce, targeting, and
measurement. For instance, thousands of content elements factor
into personalized recommendations (e.g., Netflix, Amazon) and also
for targeted advertising.

Marketers today have an opportunity to take ownership of

identity at the person level and make this a key advantage over
competitors. To do this, they must build their own “private identity
graphs,” versus relying on walled-garden players like Google
and Facebook or the quickly fading third-party cookie-based
events across the open web. Done properly, a marketer’s private
identity graph can unify an organization around the customer, from
marketing and media to commerce and service. This leads to better
insights, segmentation and modeling, advertising, personalization,
and analytics. We believe identity is not only the linchpin of
marketing, but at the heart of how businesses must operate. How
do you take advantage of the changes taking place, future-proof
your organization, and win?
• Build a private ID graph
• Use data clean rooms for person-based analytics
• Maximize addressable targeting

2020 MARKETING IMPERATIVES 29

 Take Ownership of Identity

Build a private ID graph

According to a recent Winterberry Group study, the identity market
will increase 188 percent in the US over the next five years, from
$900 million in 2018 to $2.6 billion by 2022.1 Over the past few years,
marketers have grown more comfortable with utilizing their first-party
data in combination with identity resolution or ID graph suppliers
to fuel their people-based ad campaigns, site personalization, and
analytics. Today’s ID graphs are presented to marketers much like
a “public utility grid,” with a simple and tidy proposition: input your
first-party data (e.g., CRM lists) and we will match it to a person who
can be reached. The quality and effectiveness of these services
are presented via an easy-to-understand metric known as “match
rate.” A brand or publisher sends in a file of known individuals and
the ID graph sends back a rate at which it can link those consumer
IDs (email addresses, for the most part) to a cookie or a device. The
bigger the match rate the better, right? Not necessarily. If you crack
open what is perceived as a homogeneous and tidy set of email-
to-cookie or device ID pairs arrayed one-to-one, you might find
matches built using math that counts every combination of a person
and device in a household or building. Or you may discover linkages
between emails and cookies as old as 90-120 days counted the same
as those 15 days old or less. And often, linkages make no sense, in
some cases representing botnets (i.e., a single cookie associated
with 1,000+ people).

“Public identity graphs” are constructed primarily out of third-party

relationships, using cookies and other identifiers across thousands
of websites to establish linkage with consumers. This has worked
well until now, but going forward, the pool of high-quality matches
available will become increasingly scarce, as third-party cookie
linkages get blocked and sources of third-party identity creation dry
up, due to challenges like privacy regulation and browser changes.

A marketer’s private identity graph is created from a PII-based

record of a consumer at the center, with all disparate consumer
1
Benes, Ross. “Why Marketers Struggle to Consistently Identify Their Audiences.” eMarketer, August 22, 2018.
https://www.emarketer.com/content/why-marketers-struggle-to-consistently-identify-their-audiences.

30 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

IDs resolved to a master person ID. Person match confidence is

the metric used to evaluate the quality and accuracy of identity.
This connects prospect and customer touchpoints back to a
known person ID across channels. PII-based records that sit in
the CRM organization are linked with digital identities, such as
first-party cookies and device IDs from website, app visits, and
media exposure. A private identity graph owns its linkages across
marketing platforms and media publishers with the transparency
and controls to decide what level of person match confidence is
best for certain use cases. For instance, a one-to-one best person
match confidence (e.g., email matched to email) enables hyper-
personalized audience targeting to highly qualified prospects in
media. Contrast this with the matching of that same audience at a
one-to-four person match confidence (e.g., email to a third-party
cookie ID match), which would not enable hyper-personalization
because the individual could be the child in the home or the spouse
of the individual. A marketer’s private ID graph can also create
identity from second-party media partners that share in the graph.
For instance, visits to a publisher’s pages can recognize logged
in or high recency visitors and through data sharing agreements
with high person match confidence (ex: email to email), help the
marketer resolve what normally would be an unknown, unidentified
audience to a known person ID able to be reached with 1:1
messaging, measured at a true reach and frequency level, and tied
to a transaction event.

The use of a private ID graph in targeting and measurement drives

improved marketing efficiencies and effectiveness, as well as the
ability to understand the customer and extend reach across other
channels, like outbound email, personalized service, and more
(see Figure 2.1). In fact, media alone achieves 25 percent average
efficiency gains from elimination of wasteful impressions and
greater than 20 percent ROI improvements from the ability to close
the loop of transaction events and trim down cost per action across
brands. This is the payoff of hyper-personalization.

2020 MARKETING IMPERATIVES 31

 Take Ownership of Identity

Figure 2.1: Private ID Graphs vs Public ID Graphs

Match-Rate 87%

PERSON
ID
SCALE

Today’s predominant, “public” ID graph providers are

a black box reliant heavily on third-party cookies and
other suspect digital signals.

CONFIDENCE Third-party IDs

PERSON
ID
SCALE

The disappearance of third-party cookies will put

enormous pressure on the black box ID graph providers
to create scale from lower confidence signals.

CONFIDENCE Third-party IDs

PERSON
ID

The marketer’s Private ID Graph will:

• Be customizable to their needs and use-cases
SCALE

• Be focused on mining first-party data

• Leverage “groomed,” high-confidence third-party signals
• Be flexible and responsive to privacy regulations and industry change

CONFIDENCE
First-party IDs Third-party IDs

32 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

The steps businesses need to take in building their private ID

graphs require organizational change and collaboration. Identity
must be a well-funded and executive-supported initiative. It must
have a clear owner who sits closest to functions such as data
science and customer analytics, modeling, and measurement. It
must focus on accuracy and quality of data about customers and
prospects. It must also be connected to technology organizations
making enterprise marketing and advertising tech decisions that
can make or break people-based enablement.

– Engage with a trusted identity resolution provider that

builds identity from the center of a PII-based record. Ensure
there’s the utmost focus on identity hygiene and person
match confidence, rather than identity built from third-party
cookie and device-based events with limited visibility into
how a match rate is achieved. Also ensure that identity
providers abide by all local-market laws and regulations
regarding consumer privacy.

– Decide on how the organization will source the highest-

quality, person-based, third-party data from providers
and ensure that it is resolved to your person ID. Your
identity strategy should be a future-facing, people-based
data strategy. Your customer interactions and prospecting
efforts across channels will rely on this, because identity
decoupled from third-party data will get messy. Each data
provider will come to the table with a separate version of
data that will challenge the integrity of the person ID that
you’re trying to resolve.

– Ensure that your private ID graph can take CRM, digital

experience and commerce, and media exposures and
resolve these events back to your master person ID.
This will help build your private ID graph with the highest
person match confidence possible and strengthen your
organization’s focus on the creation of its customer and
prospect value exchanges and cross-journey experiences
(Figure 2.2).

2020 MARKETING IMPERATIVES 33

 Take Ownership of Identity

Figure 2.2: Components of a Person ID that

Maximizes “Person Match Confidence”

Billions of email to
cookie or device ID pairs
HOUSEHOLD ID
THE SMITHS
123 Main St.
A brand’s first-party Centerport, NY 11721
631-435-2867
email to cookie pairs

130 million US
households
Third-party IDs

party ID
First- s

l Linkage
Emai

LAURA SMITH
123 Main St.
Centerport, NY 11721
631-435-2867

PERSON ID

242 million US adults at name,

address, and phone level

Hundreds of millions of
consumer email addresses

34 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

Use data clean rooms for person-

based analytics
In order to get the greatest value from their private ID graphs,
businesses must enable a central “data clean room” within their
organizations. Here, all identity-based records and events that
have been resolved to their master person ID, as well as all data
appended (e.g., CRM records, PII-sourced third-party data, etc.), can
be accessed by analytics teams through analytic tools that sit on
top. Marketers will need to ensure that this data environment can
extract PII from its universe of anonymous person level IDs. This
allows data to be analyzed, segments and models to be built, and
marketing, media, experience, and commerce touchpoints to be
measured at the finest grain of identity possible, with local market
privacy regulations in mind.

There’s an important distinction between a data clean room

powering analytics that leverage a private ID graph and a
traditional data lake or warehouse (see Figure 2.3). The data
clean room utilizes a full universe of a consumer population as a
basis of identity and data versus just an organization’s customer
population. This can be a key advantage for marketers as they,
in effect, can treat the entire population (with their customer
population as a sub-set) as if it’s their CRM database. Implemented
properly, a data clean room can create and deliver people-based
audiences at identity levels required for CRM programs (e.g.,
email addresses, street addresses for direct mail). They can also
create anonymized IDs of these same audiences that can link to
channels like media for ID matching, targeting, and person-based
measurement and to martech and adtech platforms for real-time
personalization and decisioning.

2020 MARKETING IMPERATIVES 35

 Take Ownership of Identity

Figure 2.3: A Data Clean Room that Leverages a Private ID Graph

Marketer’s Data Second- and Third-Party Data

CRM IDs Third-party data
DATA SOURCES

Ad server IDs Publisher IDs

Site analytics IDs
Ad and marketing tech IDs

12a458285 82a965582 82a965582 82a965582 0654RkUs Ingested data translated and

keyed to anonymous, client-
specific person IDs.

PERSON ID

Data is stored
CLEAN ROOM

in marketer’s or
identity provider’s
environment. Analytic
tools allow person-
Privacy- based audience
safe management and
measurement.
PERSON ID

Person ID re-keyed to
CRM, email hash, etc., for
advertising, marketing, and
experience connections
Street Clear Email Hashed Cookie ID Device ID matching. Target ID re-keyed
Address Email
to person ID for measurement.
CONNECTIONS

36 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

Maximize addressable targeting

Organizations that bridge their CRM and customer experience
activities with media will achieve success by maximizing
addressable targeting opportunities and delivering a total
customer experience (Figure 2.4). To do this, marketers will
need to understand how the martech and adtech platforms and
media publishers they activate through either create their own
versions of identity and targeting data or accept private ID graphs
in support of targeting (Figure 2.5). The latter is increasing as
an offering (e.g., from marketing cloud providers, customer data
platforms (CDPs), and media publishers). Marketers will need to
get closer to the way platforms and publishers treat identity inputs
like private ID graphs, and if platforms don’t have this, marketers
should push for it and work hard to integrate this capability.

As the cookie dies, industry pressure will naturally help marketers

when asking publishers for matching at email-to-email levels (high
person match confidence, or when they are seeking a deep dive
into how they accept and match audiences and derive matches to
their universe of IDs. The reason why major media organizations
and platforms like Adobe and Warner Bros. and AT&T are now
accepting person ID is that the more they enable the capability of
hyper-personalization, the better they can serve marketers who
are aiming to reach individuals with better performing content. Also
important is the granularity of the data that platforms and media
publishers give marketers back as an ID for measurement. Within
privacy guidelines, marketers should ask for a two-way relationship
of identity matching. First, an individual audience list into the
platform or publisher for targeting, and second, an audience list at
that same integrity of identity back from the platform or publisher.
This approach allows you to understand reach and frequency,
conduct performance measurement, and glean insights on
engagers at a person level.

2020 MARKETING IMPERATIVES 37

 Take Ownership of Identity

Figure 2.4: End-to-End Process that

Maximizes Addressable Targeting

PERSON ID
Data
Third-party data
sources, first-party
CRM, and digital data
resolved and linked to
person ID. Identity
PII-based person ID; all US
consumers and households.

Connections
Person ID graph
connections. Interface
for audience creation,
Person IDs/data addressable sizing,
into clean room and audience delivery.
for person-based
segments, models, and
measurement.

Clean Room
Privacy-safe analytics
environment and tools.
Data securely keyed and
re-keyed to person IDs.

38 2020 MARKETING IMPERATIVES

 Take Ownership of Identity

Figure 2.5: Activation Connections Use a Private ID Graph to Drive

Highest Confidence of Person Matches

PERSON
ID

ADVERTISING MARKETING & EXPERIENCE

Display and Video Publishers Marketing Clouds

Large Digital and Social Platforms CDPs

Ad-Tech Decisioning and Personalization

TV and Out-of-Home

In summary
Leveraging identity as a key business advantage for organizations is
a challenge to accomplish, but if done right, it will drive efficiencies
and effectiveness across marketing and media programs. It will help
you understand customers and deliver value to them across their
various experiences and transactions with your brand. The ability to
solve for identity across an enterprise will also drive better informed
product development and higher value service engagements from the
strength of person-level insights and a clear picture of the customer
journey. Getting closer to customers has never been more important.
Building a private ID graph, enabling data clean rooms for analytics,
and maximizing addressable targeting will create new winners in
people-based marketing and experience for years to come.

2020 MARKETING IMPERATIVES 39

 Enable Agility through Strategic Sourcing

40 2020 MARKETING IMPERATIVES

Enable Agility through Strategic Sourcing

IMPERATIVE THREE
ENABLE AGILITY THROUGH
STRATEGIC SOURCING

2020 MARKETING IMPERATIVES 41

enable agility through
strategic sourcing
Calibrating the marketing resources mix

Realizing the vision of hyper-

personalization and the total customer
experience will require a robust supporting
data and technology infrastructure and a
thoughtful reconsideration of your current
marketing operations to realign your
people, skills, and processes. Because
it’s a complicated process and there’s no
quick fix, not every company will take on
this challenge. But the few who invest
in the effort to optimize their marketing
organization will also be building an
advantage that will be difficult to replicate.
And of the many decisions around organizational and operating
structure, one of the most complex is whether to insource or
outsource. It seems like every few years the pendulum swings again
– from the previous mad dash to outsource and offshore as much
and as quickly as possible to the more recent flurry of interest in
bringing marketing and media services back from external partners
and standing up in-house agencies.

42 2020 MARKETING IMPERATIVES

 Enable Agility through Strategic Sourcing

Today’s initiatives are being driven by more than just cost, but also
strategic priorities, including:

– Agility: Greater speed and flexibility in execution

– Accountability: Transparency in returns on marketing
investment
– Innovation: Differentiation through new processes and
offerings

This is not an either/or decision about bringing everything in-house

or relying exclusively on external partners. There is a continuum of
possible combinations across three interconnected components
(Figure 3.1), and it begins with identifying the function and activities
that are being evaluated across strategy, media, creative, analytics,
and technology. Next is determining whether the activities are best
suited to be performed in-house or outsourced to external partners,
as well as how much should be moved to the new model. Finally,
there’s the question of location and whether the work will be done
onshore or offshore.

Figure 3.1: Components of Strategic Sourcing Decisions

Function Strategy Media Creative

What activity is 1
being evaluated?
Analytics Technology

Source
Who should perform Insource Outsource
2
this function?

Location
Where should the 3 Onshore Offshore
resources be?

2020 MARKETING IMPERATIVES 43

 Enable Agility through Strategic Sourcing

Function: Identify which activity

is being evaluated
More and more leading brands are moving marketing capabilities
away from agencies and inside their organization. According to
research by Forrester and the In-house Agency Forum, 64 percent
of companies have in-house agencies today, a 52 percent increase
since 2008.1 Seventy-five percent of in-house agencies reported
growing in size over the past two years. And more than half employ at
least 50 full-time employees. Similarly, a recent ANA study concludes
that the number of companies with in-house agencies has grown
substantially.2
• In 2018, 78 percent of companies polled said they had an in-
house agency function – up from 58 percent in 2013 and 42
percent in 2008.
• 44 percent of study respondents established an in-house
agency within the past five years.
• 70 percent of respondents have moved at least some
established business formerly handled by external agencies
in-house over the past three years.
The real situation is much less clear-cut. In fact, the ANA found that
90 percent of marketers who have in-house agencies continue to
work with outside shops. And a broader scan of marketing related
services sourcing shows that there is no dominant pattern in who is
performing these activities – whether in-house, by an agency, or a
combination of both.

In recent surveys about sourcing choices across 30 different

marketing services, there is a slight skew toward in-house only (41%),
but agency as the sole provider (24%) or both agency and in-house
(35%) were also common.3 Marketing strategy activities were the
most frequently cited as developed in-house only. And despite all
the headlines about brands setting up in-house media buying, media
continues (for now) to be the most frequently cited service provided
exclusively by agency partners.
1
“Rethink The In-House Agency Hype,” Forrester blogs, November 2018
2
“Twelve Top Takeaways from ANA In-House Agency Report,” ANA, October 2018
3
Digital Marketing Institute "20/20 Vision" A Marketing Leader's View of Digital's Future" Nov 28, 2018 and
NewBase, "The Evolving Marketer 2018"

44 2020 MARKETING IMPERATIVES

 Enable Agility through Strategic Sourcing

To begin the process of evaluating the right sourcing mix, first identify
the functional area and activity(ies) of focus (Figure 3.2). For each
of the five main areas of strategy, media, analytics, creative, and
technology, there are a number of activities that can be performed
in-house, by an agency partner or shared between the two. And it’s a
two-way street that’s not just about bringing work in-house. In some
cases, there might be activities that are owned by your internal team
that would benefit from the support of external partners.

Figure 3.2: Marketing Functions and Activities

• Brand Strategy • Competitive Monitoring
Strategy • Customer Strategy • Market Research
• Channel Strategy

• Programmatic Media • Paid Search Planning &

Planning & Buying Buying
Media
• Direct Media Planning &
Buying

• Attribution • Media Mix Modeling

Analytics • Campaign Reporting • Segmentation & Response
• Market Research Models

• Content Development • Media Campaign

Creative • Site Design & Update • Social Media
• Email Development

• Technology • Adtech Operations &

Implementation Maintenance
Technology
• Database Operations &
Maintenance

So, which activity should you start with? Some criteria for activities
that may warrant a different approach to sourcing:
• Area with rapid rate of change/innovation
• Diminishing or flat return on investment
• Increasing external vendor/labor costs or internal headcount
• Ongoing issues with execution
• Challenges with staffing at the right level and/or at the right skills

2020 MARKETING IMPERATIVES 45

 Enable Agility through Strategic Sourcing

Source: Determine who should

perform this function
As a general rule, any strategic capability that represents a core
competency should be kept in-house. A core competency refers to
skills, knowledge, or expertise that’s difficult to imitate and provides
an advantage over competitors. In the context of marketing
activities, that would typically include your portfolio, branding,
and customer strategies. But even in those cases, it’s common
for companies to engage external partners in times of change or
to provide a broader marketplace perspective. This leaves most
marketing activities open for sourcing considerations.

If your company is innovating and developing a new capability, the

main consideration should be proficiency and whether you have
a high degree of expertise in this area. In the majority of these
situations, companies will benefit from the input of external advisors
who can provide a broader market perspective and are likely to
have more exposure to and experience with emerging topics.

When it comes to execution of ongoing activities, such as campaign

execution, analytics, and platform maintenance, the main focus
should shift to competency and efficiency. Simply put, can you
perform that activity as well as (but ideally better than) external
options and do so more cost effectively? If so, keep the activity in
house but if not, outsourcing will likely be the best route (Figure 3.3).

After filtering activities through this initial lens, there will be a few
that fall decidedly into the in-house versus outsource camp and
likely many others where the answer may be less clear cut. The
assessment of whether you are able to perform an activity “better
or as well as” external options, whether for innovation or execution
activities, has a number of related considerations.

Figure 3.4 summarizes the requirements to consider in those

cases where a more nuanced review is warranted. These criteria
include how easy (or difficult) it is to get things done internally,

46 2020 MARKETING IMPERATIVES

 Enable Agility through Strategic Sourcing

Figure 3.3: Sourcing

Options Pyramid
CORE
Proprietary
and Critical
to Business
Core
Competencies

In-House
INNOVATION PROFICIENCY
Our level of Our level of
Development of expertise is at expertise is
New Capability or or greater than lower than
Transformation in external options external options
Business Approach

In-House Outsource
COMPETENCY
EXECUTION We perform this activity well We do not perform this activity & EFFICIENCY
Commodity and at a lower cost than well and/or do so at a higher
with Limited external options cost than external options
Opportunity for
Differentiation

In-House Outsource

such as availability of resources with the requisite expertise, as

well as the level of efficiency of internal processes and procedures.
Cost also comes into play for both options. On the one hand, a
desire to reduce external vendor costs may result in a decision
to bring work in-house. But just as often, brands have constraints
on internal headcount and need to rely on external partners to
provide incremental capacity. Finally, there may be some industry
or firm-specific considerations, such as the volatility of demand for
marketing services or the need to maintain executional control in a
highly regulated industry.

2020 MARKETING IMPERATIVES 47

 Enable Agility through Strategic Sourcing

Figure 3.4: In-House vs. Outsource Evaluation Criteria

Better Fit for Better Fit for

Evaluation Criteria
In-House Outsourced

Core competency/source of competitive advantage +++

Need a high degree of control ++

Availability of internal resources with requisite skills ++

Desire to reduce vendor costs ++

Need to quickly scale team up/down +++

Access to expertise in new/emerging topics +++

Desire to reduce overhead costs ++

Circumvent cumbersome internal processes +

After the sourcing decision is made, you will need to address

how much of the work will be done in-house or outsourced.
While there are many circumstances where it makes sense to
bring a specific activity completely in-house or fully outsource,
there are just as many scenarios where using both in-house and
outsourced resources for an activity may make the most sense.
For example, a mixed staffing model would be a natural interim
step for companies who want to gradually move activities toward
a full in-house or outsourced model. Or in some cases, a hybrid
team comprised of external resources sitting within internal teams
may become a longer-term solution. This approach is increasingly
favored by companies to maximize the speed and depth of brand,
business, and culture assimilation and significantly streamlines
communications and coordination.

48 2020 MARKETING IMPERATIVES

 Enable Agility through Strategic Sourcing

CASE STUDY
Best of in-house and outsource
through a hybrid model

Combining the flexibility of outsourcing and the integrated working

model of an in-house team, Filter, a Merkle company, specializes
in standing up hybrid staffing models where expert teams are
embedded within a client’s organization. One such case is a leading
global athletic brand that was embarking on a new direct-to-
consumer strategy. To support this ambitious, multi-regional initiative,
the brand needed to dramatically scale and up-level its multi-channel
campaign capabilities. But instead of growing its internal teams, the
goal was to act smarter and restructure the way outside agencies,
FTEs, and in-house partners were leveraged.

Under this model, Filter integrated teams of designers, writers,

producers, and channel specialists on-site, within their Global Digital
Brand organization. Based on the success of this approach, Filter
later added teams of content strategists, retail specialists, and other
digital brand experts, and today works with more than a dozen
different digital marketing stakeholders across the organization.

These efforts have accelerated the client’s DTC strategy with

campaigns and content that deliver greater impact at faster speeds,
while providing the client with the flexibility needed to quickly ramp
up/down specific areas based on business needs. For FY18, the
client credited the DTC program for driving virtually 100 percent of
its growth, with a 9 percent revenue increase in Q4, followed by a
10 percent increase in Q1 of 2019.

2020 MARKETING IMPERATIVES 49

 Enable Agility through Strategic Sourcing

Location: Decide where the resources

should reside
The final consideration is the location of resources. This is relevant
whether you have decided in-house or outsource as your preferred
staffing option. While the trend toward offshore has slowed
in recent years, it is still on the rise.4 Often “outsourced” and
“offshore” are used interchangeably but who does the work (your
company or a vendor) and where the work is done (domestic or
non-domestic) are two separate matters (Figure 3.5). One caveat is
that the in-house/offshore may not be the best choice when only a
small number of resources are required, due to the effort and cost
of coordination.5

Figure 3.5: Onshore and Offshore Options

In-House Outsourced

Onshore

Traditional staffing model Third-party staffed teams in

with full-time employees, the same geography (may
working on site work onsite or offsite)

Offshore

Company owned and Third-party staffed teams in

operated delivery centers, a non-domestic, lower cost
typically in non-domestic, location
lower cost location

50 2020 MARKETING IMPERATIVES

 Enable Agility through Strategic Sourcing

Cost savings historically had been the main impetus to

offshoring and it continues to be a valid reason to consider this
option. However, in light of rising global labor costs, regulatory
complexities, and the communication challenges of working with
remote teams, the overall fit of offshoring to your needs should be
carefully weighed. Obviously, offshore would not be an option if
physical proximity or real-time communication are requirements.
Additional factors to consider are the type of skills required and
the size of the team you’re considering. For marketers, marketing
technology and analytics related functions continue to be strong fits
for offshore. Other marketing activities that many companies opt to
perform offshore include creative production, secondary research,
and competitive monitoring.

Better Fit for Better Fit for

Requirements
Onshore Offshore

Need for physical proximity ++

Complex legal/regulatory considerations ++

Need for real-time communication +

Require a small number of resources +

Require STEM expertise (science, technology,

++
engineering, math)

Reduce labor costs ++

Access to large pool of resources +

4
HfS Research in conjunction w/KPMG “State of Operations and Outsourcing” 2014, 2016, and 2018
5
Discussion of offshore will also encompass the “nearshore” approach, where the team is locat-
ed in a nearby country, typically less than a three-hour time difference between the contractor
and the rest of the team. In the case of the United States, this would mean working with staff in
Canada or Mexico, or perhaps Central or South America.

2020 MARKETING IMPERATIVES 51

 Enable Agility through Strategic Sourcing

In summary
Ultimately, the optimal team structure will be one that’s unique to
your firm. To determine the right resource mix for your marketing
organization, here are some guidelines:

• Keep activities in-house if they are core to your business or

if your internal team can perform them at a comparable or
higher level of effectiveness and efficiency.
• Consider a hybrid approach where external teams are co-
located with internal resources.
• Fit and value should be more important than cost management
when deliberating changes to your resourcing model.

52 2020 MARKETING IMPERATIVES

Deliver the Total Customer Experience

CONCLUSION

2020 MARKETING IMPERATIVES 53

The very definition of marketing is
in the midst of a meaningful change,
because of rapid shifts in consumer
behavior. Forces like the direct-to-
consumer business model are taking the
need for personalization to a new level.
Netflix, Uber, Dollar Shave Club, and their
ilk, have materially changed customer
expectations around the ways they
interact and engage with brands.
CMOs find themselves navigating these forces, while at the same
time adjusting to increased privacy concerns and regulations.
The CMO is in the driver’s seat of a major pivot in the marketing
approach that must be carried out across the entire organization.
Hyper-personalization means targeted, relevant experiences at
every encounter, from marketing to sales to service and beyond,
encompassing the brand as a whole. Consumers consider all of
these touchpoints part of the connected customer experience, and
the role of the CMO is evolving to influence it.

You’ll only succeed at delivering upon a connected customer

experience if you start with the customer, master identity, and
create agile working environments.

54 2020 MARKETING IMPERATIVES

CONTRIBUTORS
The 2020 Marketing Imperatives were developed by
a distinguished team of Merkle thought leaders:
David Williams, Craig Dempster, Matthew Naeger,
Richard Lees, Gerry Bavaro, Margie Chiu, and Neil Gissler.

ABOUT MERKLE
Merkle is a leading data-driven, technology-enabled,
global performance marketing agency that specializes
in the delivery of unique, personalized customer
experiences across platforms and devices. For more than
30 years, Fortune 1000 companies and leading nonprofit
organizations have partnered with Merkle to maximize the
value of their customer portfolios. The agency’s heritage
in data, technology, and analytics forms the foundation
for its unmatched skills in understanding consumer
insights that drive people-based marketing strategies.
Its combined strengths in performance media, customer
experience, customer relationship management, loyalty,
and enterprise marketing technology drive improved
marketing results and competitive advantage. With
9,000+ employees, Merkle is headquartered in Columbia,
Maryland, with 21 additional offices in the US and 29
offices in EMEA and APAC. In 2016, the agency joined
the Dentsu Aegis Network. For more information, contact
Merkle at 1-877-9-Merkle or visit www.merkleinc.com.

CONNECT WITH US
merkleinc.com/imperatives | 1-877.9.MERKLE

2020 MARKETING IMPERATIVES 55

The Marketing Imperatives
have evolved over the years,
but the concepts remain
relevant today.

Access additional content at

merkleinc.com/Imperatives. 2019
Integrating to
Transform

2017 2016 2015

The Activation Conquering Mastering the
of People-Based People-Based Addressable
Marketing Marketing Customer
Experience

 
/#4-'6+0) MARKETING
+/2'4#6+8'5 IMPERATIVES
6JG4KUGQHVJG
2NCVHQTO/CTMGVGT 6/

>,):0;, 7/65,5<4),9

PHUNOHLQFFRPLPSHUDWLYHV_ KCPIJCGLAAMK AKM@JSCNPGLR  ,$1*+$

2014 2013 2012

The Rise of the Connected CRM Blueprint for
Platform Marketer CMOs

56 2020 MARKETING IMPERATIVES