At a recent industry event, we heard a lot about the upcoming year in marketing, and how data and identity will play a key role in driving marketing success.
As a means to master identity, some companies have heralded the idea of the customer data platform (CDP), but the category is still largely undefined. For example, many Salesforce customers believe that they already have a CDP. The reason? They have several different ways of segmenting known and unknown audiences between a data management platform (DMP) and CRM platform.
In an article I wrote here last year, I introduced a simple “layer cake” marchitecture, describing the three core competencies for effective modern marketing. In such a fast moving and evolving industry, I have since refined it to the core pillars of identity, orchestration and intelligence:
With this new marchitecture, brands have the ability to know consumers, engage with them through each touchpoint and use artificial intelligence to personalize each experience.
Mastering each layer of complexity is difficult, requiring an investment in time, technology and people. Lets focus on perhaps the most important – the data management layer where the new CDP category is trying to take hold.
The next wave of data management
By now, it’s safe to say marketers have mastered managing known data. A few years ago, when I was working for a software company that also managed postal mailing lists, I was astonished at the rich and granular data attached to mailing lists. There is a reason direct mail companies can justify $300 CPMs – it works, because direct marketers truly know their customers.
After joining Salesforce, I was similarly awed by the power to carefully segment CRM data, and provision journeys for known customers spanning email, mobile, Google and Facebook, customer service interactions and even community websites.
How can we get to this level of precision in the world of unknown (anonymous) consumer data?
As marketing technology and advertising technology converge, so must the identity infrastructure that underlies both. Put more simply, tomorrow’s systems need a single, federated ID that is trust-based. Companies must have a single source of truth for each person, the ability to attach various keys and IDs to that unified identity, as well as have a reliable and verifiable way to opt people out of targeting.
Let’s take a look at what that might look like:
This oversimplification looks at the various identity keys used for each system and the channels they operate in. Today, the CRM is the system of record for engaging consumers directly in channels like direct mail, email campaigns and service call centers. The DMP, on the other hand, is the system of record for more passive, anonymous engagement in channels like display, video and mobile.
When consumers make themselves known, they “pull” engagement from their favorite brands by requesting more information and opting into messaging. At the top of the funnel, we “push” engagements to them via display ads and social channels.
As a marketer, if you have the right technologies in place, you can seamlessly connect the two worlds of data for more precise consumer engagement. The good news is that, martech and adtech have already converged. Recent research from Salesforce shows that 94% of marketers use CRM data to better engage with consumers through digital advertising, and over 91% either already own or plan to adopt DMP over the next year.
So, if mastering consumer identity is the most important element in building tomorrow’s data platform then what, exactly, are the capabilities that need to be addressed? There are three:
1. A single data segmentation engine
Currently, marketers don’t have a single source of truth about their consumers.
Here’s why: Brands build direct mail lists and email lists in their CRM. Separately, they build digital lists of consumers in a DMP tool. Then, they have lists of social handles for followers in various platforms like Facebook and Twitter. Consumer behaviors like browsing and buying that happen on the ecommerce platforms are often not integrated into a master data record. And distributed marketing presents a challenge because a big mobile company or auto manufacturer may have thousands of franchised locations with their own, individual databases.
Segmentation is all over the place. Tomorrow, there must be a single place to build consumer profiles with rich attribute data, and provisioned to the systems of engagement where that consumer spends their time.
2. Data pipelining and governance capabilities
This identity layer must also have the ability to provision data, based on privacy and usage restrictions, to systems of engagement.
For example, when a consumer buys shoes, they should be suppressed from promotions for that product across all channels. When a consumer logs a complaint on a social channel, a ticket needs to be opened in the call center’s system for better customer service. When a person opts out and chooses to be “forgotten,” the system needs to have the ability to delete not only email addresses, but hundreds of cookies, platform IDs and other addressable IDs in order to meet compliance standards with increasingly restrictive privacy laws and, more importantly, giving consumers control over their own data.
Finally, marketers need the ability to ingest valuable DMP data back into their own data environments to enrich user profiles, perform user scoring, as well as build propensity models and lifetime value scores. This requires granular data storage, fast processing speeds and smart pipelines to provision that data.
3. Leaping from DMPs to holistic data management
Ad technology folks are guilty of thinking of cross-device identity (CDIM) as the definition of identity management. Both deterministic and predictive cross-device approaches are more important than ever, but in a world where martech and adtech are operating on the same budgets and platform, today’s practitioner must think more broadly.
Marketers can no longer depend solely on another party’s match table to bridge the divide between CRM and DMP data. A more durable, and privacy-led connector between known and unknown ID types is required. Moreover, when they can, marketers need the ability to enrich email lists with anonymous DMP attributes to drive more performance in known channels—now only possible when a single party manages the relationship.
These three tenets of identity are the starting point for building the data platform of the future. The interest and excitement around CDPs is well placed, and a positive sign that we are evolving our understanding of identity as the driving force behind the changes in marketing.
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The other point I would flag within your data pipelining section is that at the moment despite a wide range of companies now implementing DMPs, there isn’t the real time connectivity between systems to ensure that when something about a user changes, that data can be passed to all other parts in real time to ensure the user’s experience is aligned. I’ve no doubt that this will change in the coming months but it feels like it’s an aspect that for now is very much lagging behind.
Thanks for the comment, Matt. You are 100% right. It’s most certainly on the way, but challenging due to the fact that–even if your DMP can process and “pitch” the data in near real time, the systems on the other side have to “catch” it, and many are built on legacy technology that are still being updated.
Matt, I think you’ve got it spot on. Real-time bi-directional connectivity hydrating data into every endpoint is the only way to achieve situational context – and context is king. You need a CDP that enables ALL data to be eligible and free to participate.
On the point of marketers have mastered known data, I’m not sure this is the case. Once upon a time, this was true, but the web era has perhaps created a reliance on ad-tech which has left first party data by the wayside in many ways.
Mobile and GDPR have and will fundamentally change that. Mobile creates vastly more complex and rich data points that feed situational context, and GDPR will force marketers to sharpen the saw and create better value-exchanges to unlock consent for this data.
I’m excited for the new era of better customer experiences, but it will require businesses to invest in the very best marketing technology for the connected era. The CDP space is set to get very exciting – it also opens up great opportunities to build a best of breed stack of the most modern marketing tech out there, with east and flexibility. The marketing ecosystem looks very different now, as consumers gravitate towards mobile and resulting connected experiences that are unfolding.
Great article, we have felt strongly about this for almost 5 years. We’ve been building a platform called PeopleVine which provides marketers with the tools to engage across multiple channels (not just social and email, but live interactions and more). We are still young, but our platform is exactly what you’re looking speaking about.
Would love to chat, reach out at PeopleVine.com.