Why the 2020 Holiday Season Will Look Drastically Different for Retailers

On Jan. 1, 2020, the world as marketers in the United States previously knew it changed drastically. The California Consumer Privacy Act (CCPA) went live, and with it significant restrictions were suddenly placed on marketers and marketing technology vendors, specifically those that collect, use and/or sell consumer data. The road to gathering marketing data suddenly became muddied. With consumers now able to opt out of having their data collected, marketers — and by extension, brands — face significant accuracy issues in their data collection and the decisions they base on this data.

Specifically, the CCPA monumentally affects marketing accuracy, and as it turns out, the two main issues related to accuracy of data collection are both in the hands of the consumer. According to the CCPA, “a consumer shall have the right to request that a business delete any personal information about the consumer which the business has collected from the consumer.” Likewise, “a consumer shall have the right, at any time, to direct a business that sells personal information about the consumer to third parties not to sell the consumer’s personal information. This right may be referred to as the right to opt out.” In short, this combination adds up to a new set of challenges for marketers, who use this data for targeting, personalization and marketing measurement.

Furthermore, these challenges extend to the marketing technology vendors that serve brands. For example, multitouch attribution (MTA) marketing measurement vendors, namely those that use cookies, pixels and digital “fingerprints” to track consumers and the ads they see across devices, the CCPA now regulates “unique personal identifiers.” This is bad news for marketers and their marketing attribution vendors. Why? A nonrandom data gap from consumer opt-outs has now been introduced into the mix. The “funnel” of data is smaller, has many gaps and holes, and is less reliable for measurement.

However, the situation isn’t a dead-end. With proper preparation and a re-tooling of marketing strategy, marketers can tackle the new challenge presented by CCPA and the spate of similar regulations working through about a dozen more states behind it. First, it’s paramount to apply the “right tool for the right job." From a measurement perspective, marketers should consider a combination of approaches, such as using suppression tests for email and direct mail, in-market A/B lift studies for creative testing, and marketing mix modeling to measure the total effects of all marketing — digital and traditional.

It’s also essential to measure all conversion points, both online and offline. Measuring digital-only outcomes misses up to 90 percent of the value of a digital campaign, and therefore misses a massive chunk of the marketing picture. Furthermore, marketers can borrow a successful page from the software engineering community and embrace agile methodologies, moving to run frequent analytic “sprints," rapid updates and continuous learning. Brands with a clear speed advantage win. Measurement must move to agile methods to increase competitive advantages.

There are also major considerations in terms of marketing budget allotment. Brands now more than ever need to optimize their entire marketing budget. Making marketing investment decisions based on each channel silo respectively misses the full opportunity to impact total business performance. Full portfolio budget optimization, as well as accounting for nonmarketing factors like seasonality, will yield the best results.

With the CCPA only just going into effect, the full scale of its impact and how marketers respond to it still remains to be seen. However, waiting isn't a recipe for success. Marketers that embrace this change and adapt quickly for an agile information advantage will be the clear winners when the CCPA cloud clears.

Matt Voda is the CEO of Optimine Software, an industry leader in cloud-based cross-channel marketing analytics and optimization.