The holiday shopping season sent a clear message to marketers: if you don't have a holistic, data-driven view of your customers, you'll be left behind.
Online and in-store boundaries are blurring. The season sounded a death knell to marketing strategies that lacked a mobile component. Mobile sales rose to almost a third of the $3.3 billion of Black Friday’s online sales.
Given this fast-paced marketplace, it’s not surprising that the wave of holiday buying numbers was accompanied by buzz about a new technology: the customer data platform (CDP).
What makes this platform so hot? And why did Gartner Research call it an “innovation trigger” when it added the CDP to its Hype Cycle for Digital Marketing and Advertising, 2016?
Customer Data Platforms Gain Steam
Technologist David Raab, founder of the new vendor-based Customer Data Platform (CDP) Institute, argues that the CDP is “one of the few fundamental changes in marketing technology in the past decade, because it shifts control of the customer database from IT to marketers."
(Disclosure: Ensighten is one of the founding sponsors of the Institute.)
Gartner released a research note on the platform in November 2016, Insight for Understanding Customer Data Platforms. Gartner analyst Christi Eubanks wrote that the marketing-controlled CDP, which serves as a data hub for all customer data, puts forward, “a compelling promise — providing a holistic view of the customer to help execute and optimize personalized journeys.”
Clearly, the CDP is gaining traction, but why? Other data platforms serve as data hubs, including tag management systems and data management platforms (DMP). What void does it fill in the market that other marketing data platforms do not address?
What's Different About Customer Data Platforms?
Among marketing data platforms, the CDP has the most comprehensive capabilities in integrating customer data and making it actionable. Or as Gartner’s Eubanks puts it,
“For marketers using multiple point execution tools, the CDP provides the connective tissue between and among them to integrate the marketing stack and enable orchestration across the web, mobile, email, social and so forth.”
In contrast, the DMP emerged as an ad-focused platform, which primarily uses third-party data to build audience segments for digital ad campaigns, enabling advertisers to target segments based on demographics, interests and other attributes. The CDP can accelerate DMP rollout and help build smarter, cross-channel audiences. Both are important to an enterprise.
The variety of vendors supporting the new CDP Institute demonstrate the different approaches to a CDP. In our view, a CDP benefits greatly from a tight integration with an enterprise tag management system (more on this later), helping it solve the following challenges:
- First-Party Data Collection and Ownership: The platform unifies data from onsite domains (web, mobile apps, etc.); offsite, including all display ads, email and IoT devices; and offline systems like the CMS and POS. Enterprise tag management at the platform’s core unifies data in a customer data layer that is first party to the brand
- A Single View of the Customer: The CDP provides a single view across all channels and devices, as well as offline touch points. In this way, it supports one of the most sought-after marketing capabilities. In effect, the platform allows markers to connect the dots across the customer journey
- Persistent Customer Profiles: Data can be unified in persistent customer profiles, which track all customer interactions and ad impressions, in the process building a continuously updated history of unique individuals. If a consumer moves to a new device, the profile remains intact and accurate when profile stitching is triggered
- Cross-Device Stitching: The platform overcomes problems associated with collecting data using third-party cookies, which make it impossible to distinguish a unique individual as he or she switches from one device to the next. A state-of-the art CDP will provide the technology to stitch data, identifying a user across different touch points by unique keys or identifiers
- Real-Time Decisioning: Decisions required to optimize marketing and advertising require near real-time data collection and distribution of insight to optimize marketing campaigns, re-target, optimize the conversion funnel, support feed call center work flows, to name just as few
- Deepest Integration with the Digital Eco-System: Most enterprise tag management vendors have extensive, pre-built integrations with the larger digital marketing eco-system. This enables the CDP to bridge more technology and first-party data sources on a comprehensive scale
- Privacy and Data Governance: A state-of-the art CDP guards the privacy of the customer data, identifying and preventing data leakage, and providing flexible opt-out solutions for consumers. In addition, it provides standards for governing data use and makes it possible to curtail data leakage.
Getting Started with CDP
Many enterprises now routinely embrace tag management to collect, own and integrate data from across the digital ecosystem. As a result, tag management is the perfect place to start in building a CDP.
Tag management lives on every page of the company’s digital ecosystem and, thus, reveals all user behaviors. Organizations also deploy marketing technologies using the tag management system, and these tools also exist on those pages along with the data they generate. Plus, enterprise tag management now enables integration with offsite systems like the CRM, POS and call centers.
In essence, tag management shines a light on all the information that's critical for the CDP to function as a single source of truth about customers. Tag management, as the center of user data, is naturally the center of a CDP going forward.
Think of it this way: If you've implemented a tag management system, you already have the foundation required to get the CDP off the ground. Begin there to create a CDP with the potential to become a force multiplier, fueling your entire marketing program with customer intelligence and making it possible to optimize engagement with consumers wherever they are and however they want to buy.