Why Probabilistic Is a Better Foundation for Global Marketers

By Aaron Jackson, Chief Growth Officer at Eyeota

This article is sponsored by Eyeota.

The United States stands alone when it comes to its insistence on a predominantly deterministic approach to data-driven marketing. Because of that, the ongoing shifts in the privacy landscape – from Apple’s IDFA deprecation to Google’s third-party cookie shutdown and beyond – are putting an undue amount of stress on US marketers’ go-forward strategic plans.

It’s time for marketers to pivot to a global mentality when it comes to the balance of deterministic vs. probabilistic data that powers their campaigns. While deterministic data is a powerful and pragmatic tool in many cases, it’s hardly sufficient when it comes to crafting a well-rounded program that values both retention and acquisition. Furthermore, as previously relied upon streams of deterministic data are turned off in the coming months and years, US marketers will have to come to terms with a reality that’s been well-established – and well-accommodated – among global and international brands for years.

Let’s look at where deterministic data falls short as a foundation for cookieless media, and how marketers – including those with limited first-party data – can leverage this moment in time to get their data-driven strategies to where they should have been all along.

The deterministic reality

Let’s be clear: When it comes to deterministic vs. probabilistic data, it’s not that one is necessarily better than the other. Rather, they work best when leveraged in combination for a fully rounded marketing program that balances retention and personalization with robust new customer acquisition efforts.

Deterministic data is a necessary and fantastic asset when it comes to staying connected to, and deriving more value from, existing customers. Strong first-party data is essential for talking to your existing customers and refining their customer experiences in a way that encourages brand loyalty and enables intelligent upsell and cross-sell efforts.

The problem comes when marketers turn their attention to growth. Retention through personalization and loyalty-building efforts is vital to maintaining a healthy brand, but true sustainability requires constant new customer acquisition. For that, brands require a core competency in probabilistic data and cohort-driven methodologies. This is an area where global marketers have outpaced US marketers in recent years.

Probabilistic strengths

In international markets, where privacy-first regulations and policies have been well-established for years, deterministic targeting does not serve as the foundation for customer acquisition. And in the United States, deterministic targeting for customer acquisition is going to come under more pressure in the coming months due to privacy constraints and the loss of third-party cookies.

And that’s OK.

Here’s where probabilistic data onboarding and its related cohort-driven methodologies shine. By approaching data onboarding from a probabilistic standpoint, a brand can use all of the information that sits in its first-party data – whether offline or online – and aggregate that data into cohorts. Those cohorts can be used to find propensity cohorts (i.e., potential new customers outside of a company’s established customer base) who are highly likely to have an interest in that company’s services and products.

Probabilistic data onboarding represents a scalable, privacy-compliant way to tap into new audiences. And more importantly, it doesn’t require an overwhelming amount of first-party data. For certain companies, such as those operating in the CPG space, this is an important point. While every brand has spent the past few years trying to get closer to its customers, some product categories are still going to naturally pass through intermediaries. For CPGs, the ability to take modest reserves of first-party data and extrapolate their value for customer acquisition purposes is absolutely vital.

The right balance of deterministic vs. probabilistic data strategies will look a little different for every brand, but for marketers, that balance is going to need to shift in the coming months. By working with data onboarding partners who have experience helping global organizations, brands can recalibrate their approaches for a privacy-first world. More importantly, they can expand their acquisition strategies in a way that will not just maintain but actually accelerate growth for the future.

For US marketers, the sky is not falling. Rather, forthcoming privacy shifts represent the light rain that’s reminding them of the umbrella they should have been carrying all along.