The Future of Marketing
is 1-1 Relationships Between Brands and Customers

The Inefficiency of Advertising

For over 70 years, marketing has been driven by the concept of reach and frequency—the idea that the more people you can expose your message to – and the more times you can repeat it – the more likely you are to drive sales. This approach made sense when TV, radio, and print were the dominant channels, and where every product was mass-produced and everyone was the target audience. 

But technology has introduced tailored experiences - from Spotify Wrapped to Warby Parker’s try-before-you-buy glasses to home delivery of cars you specify online, AirBnB experiences and even customizable insurance plans, rideshare preferences and bespoke perfumes. The product has become one of mass customization – and consumers’ expectations of brands have changed because of it.

When examining the still-typical way that marketers spend their budgets, as if it’s the 1980s, it’s no wonder that recent studies show staggering inefficiencies in digital advertising spend:

• Proxima reports that companies waste between 40 and 60 percent of their digital marketing budgets.

• According to Nielsen, 40% of digital advertising budgets are wasted on reaching the wrong audiences. (That is uncomfortably close to being a coin-flip whether your ad reaches its target).

• The Association of National Advertisers states that 25% of programmatic ad dollars are wasted. While better than other methods, the 25% waste is a black box where no one seems to know where the money goes, which means you can’t optimize it.

No wonder CFOs are perpetually skeptical of marketers. One thing these figures show is that the traditional method of casting a wide net is no longer effective. Consumers are spread across thousands of channels, and many of the ads brands buy simply don’t reach the right audience. What’s worse, when consumers do see ads, they are often irrelevant or intrusive – appearing at the wrong time or wrong place – which breeds frustration rather than engagement. When you’re late for an appointment, a pop up ad on Waze that blocks the map may count as an impression for the platform and the marketer, but is just an annoyance for the consumer.

The Fragmentation of Media and the Decline of Mass Marketing

Over the last decade, the rise of digital platforms like Google, Meta, Amazon, and YouTube has shifted the advertising landscape. In 2015, digital advertising channels accounted for about 50% of total advertising spend. In 2024 it is around 60% and is projected to keep climbing with a 9.1% CAGR. Keep in mind that no one believes all billboards, radio and direct mail advertising will go away, so in terms of media consumption based advertising, these platforms now dominate consumer ad spend with a declining (and ever-older) residual demographic still consuming traditional television.
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One of the biggest changes that’s happened in marketing is the growing chasm between Brand Marketing and Performance Marketing. With the rise of Google, which now dominates nearly 90% of all internet searches, brands could at last measure marketing return on investment (MROI) for at least the bottom of their funnels. Performance marketers, who can show direct impacts to revenue from conducting marketing sprints have become the most credible members of the marketing team, while brand marketers are left with hazy metrics like “impressions” (a modern way of saying “reach and frequency”) without a clear line of attribution to revenue. This has all led to further skepticism of brand-building activities that everyone instinctively knows are important (PR, social media, sponsorships, etc.) but are difficult to explain to CFOs and CEOs who really want to be able to measure both the cost and return of brand investments in their financial models.

But perhaps the most significant shift has been in how consumers engage with brands. Today, consumers no longer expect a generic, one-size-fits-all approach. They want brands to know them on a personal level, recognize their needs, and cater to their unique preferences. Brands that fail to meet these expectations risk losing customer loyalty.

And one thing that can be measured is the value of a repeat, loyal customer versus a one-time customer.

The ‘Super-Consumer’ Drives Revenue - and Demands Personalization

According to McKinsey, 71 percent of consumers expect companies to deliver personalized interactions, and 76 percent become frustrated when this doesn’t happen. The need for personalization is not a passing trend—it’s a fundamental shift in consumer expectations.
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In fact, McKinsey’s research shows that 72 percent of consumers expect businesses to recognize them as individuals and understand their interests. Moreover, personalized communications have been shown to drive significant results, with 76 percent of consumers saying such content makes them more likely to consider a brand, and 78 percent saying it increases their likelihood of repurchasing.
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The economic impact of personalization is also clear. McKinsey estimates that personalization can drive a 10 to 15 percent lift in revenue, with some companies achieving even greater results. 

Perhaps this is not a big surprise when brands have long known that a tiny percentage of their customers drive an outsized impact on their business. In fact, Nielsen found that typically just 10% of a brands customers – the “super-consumers” – drive “at least 30% of sales, 40% of growth and 50% of profits.” In short, brand loyalty pays off. Building brand loyalty offers by far the best MROI of any brand-building activity a consumer brand can invest in.

Personalization can drive a 10-15% lift in revenue, with some companies achieving even greater results. (McKinsey)

The Age of 1-1 Personalization at Scale

While personalization has always been the gold standard, it was historically expensive and impractical for many brands. Customizing each message for each consumer required enormous resources, and the technology didn’t exist to deliver the right message at the exact right moment.
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Today however, advancements in AI and data analytics have made it possible to deliver 1-1 personalization at scale. AI-driven platforms can analyze vast amounts of lived experience data—behavioral, moment-specific data that is powered by consumer interactions in real time. Tools like DashLX are leading the way in utilizing this data, combining 100% opted-in consumer wearable data with additional layers of information such as weather, topography, and zero-party brand data (like shopping and purchase history). This enables brands to send highly personalized messages based on individual behaviors, in real-time.

The Rise of Loyalty Programs as Brand Catalysts

One of the most exciting developments in this space is the growing role of loyalty programs. Brands such as Brooks Running, New Balance, Saucony, Lululemon, and Puma are increasingly using their loyalty programs to collect real-time wearable data (LX data) directly from customers. Customers opt in to share their data because they get a lot of value back from the brands. Beyond the discounts and rewards points that customers expect from loyalty programs, these brands also provide personalized fitness training advice, tailored product recommendations based on real-world activities (think “trail running in the rain on rocky terrain” rather than just “running”), and encouragement when members reach milestones that are important to them - such as fitness or race training goals. These loyalty programs experience 5x higher open rates and 3x higher engagement from their messages because messages are sent at the moment a participant finishes a workout, arrives at a new trail or walks past their store. These brands are fostering a deeper, more valuable relationship with their customers by making every interaction person-specific and relevant in the moment when customers are open to a message.

Contrast this with a customer’s typical experience of digital marketing from brands, where their data is harvested often without their knowledge to constantly interrupt them with ads for irrelevant products when they are trying to do something else. No wonder customers’ brand loyalty has precipitously dropped in the past two decades – brands themselves have made their relationship transactional and tone-deaf.

These loyalty members are not trading data for discounts; they are opting into ongoing, personalized engagement. For instance, Brooks Running Club members receive not only personalized product suggestions but also consultations on running technique and customized training plans. This isn’t just about selling more—it’s about providing real, ongoing value to customers that transcends the transactional nature of traditional marketing.

The New Definition of Brand Loyalty

In the past, “loyalty” was simply a measurement of the likelihood that a consumer would continue purchasing from a brand. Today, loyalty is becoming reciprocal. Consumers now expect brands to offer more than just products—they want brands to deliver value in ways that go beyond the point of sale.

‍76% of consumers say they are more likely to engage with a personalized offer tailored to their interests, and 91% of consumers are willing to trade personal data for loyalty rewards. This creates a dynamic where brand loyalty is no longer a transactional exchange, but an ongoing, personalized engagement. Brands must now consider loyalty as a two-way street—offering value through personalized experiences that create long-term relationships.

76% of consumers say they are more likely to engage with a personalized offer tailored to their interests.

As the digital advertising space continues to evolve, the need for personalized, 1-1 relationships between brands and consumers will only grow. The future of marketing will be defined by brands that can deliver tailored, relevant experiences at scale, powered by AI and enriched with real-time, lived experience data. For brands, the focus must shift from mass advertising to building deep, personalized connections with their customers—because in the future, it’s not just about selling products, but about cultivating lasting, meaningful relationships.

As consumers demand more from brands, the question is no longer whether to personalize marketing efforts, but how quickly brands can embrace this shift and turn personalization into a competitive advantage. The brands that get it right will build the strongest customer relationships and unlock the greatest potential for growth in the years to come.