In 2016, a new category has been added to the marketing technology landscape by Scott Brinker: Customer Data Platforms. As if the overview wasn’t complex enough… However, this category does add something extra that wasn’t there previously. This becomes clear when we compare Customer Data Platforms with Data Management Platforms. This type of systems facilitates online advertising. They can handle large amounts of cookies, and can create audiences for advertising with similar traits or interests.
Due to privacy regulations, especially in Europe, it is not allowed to hold information that can be traced back to individual persons; you can only use these audiences in an anonymised way. This means a cookie is the only piece of information of people you show your ad to, you are allowed to hold. And obviously you don’t know the person behind the cookie.
For advertising, it is sufficient to define groups of people. and segment these groups based on similar characteristics. The depth of knowledge about these groups is very shallow. In most instances, they were assigned to several areas of interest, and that’s it.
Nowadays, with the awareness around the value of data growing, it becomes clear that most value is in the customer data a company owns. Internal systems, such as ERP systems, contain much more specific information than just a cookie or an ID, i.e. information on what a customer bought, the paths someone took on the website and the complaints reported at customer service. If you are able to comnone these different sources of customer information to a complete customer view, you can follow the entire customer journey. Being able to use this in campaigns will add much value.
This type of data is called first party data, and is generally seen as much more valuable than third party data, that is being used for advertising, simply because it gives you a much deeper understanding of your customers. You can follow all steps of the customer journey, and see what is important to them. This enables you to predict the type of things they will respond to in a favourable way.
Obviously, all this information can be traced back to individual persons, and this restricts companies in using the data. You have to be sure to comply with the consent a customer has given.
This is where a customer data platform can add tremendous value. It is the basis for your own, first party, customer data. The profiles you generate in a Customer Data Platform can be used in all systems of the MarTech stack; the email program, the dynamic content system for the website, call centers, and so on. It gives you a 360 profile of you customer at every touchpoint in the customer journey. This also applies to advertising. The more knowledge of your existing customers you put in, the more effective you will be in selecting the right audiences for campaigns. To enable this, data from the Customer Data Platform can be published to a Data Management Platform. Of course, audiences should then be anonymized, so the Data Management Platform does not know which individual customers are part of an audience. In this way, you can enrich audiences while still complying with privacy regulations.
If you would try this the other way around, and enrich a Data Management Platform with first party data, you will need to pay extra attention to privacy. If you create a foundation for the ownership of your own data, this allows you to share just those pieces of information needed for a campaign with other tooling, such as a Data Management System. Would you choose to transfer all important information into the Data Management Platform, you will have to anonymise the data all the time. This makes analysis on the level of an individual person impossible and leaves you with very little relevant data for analysis and reporting.
As advertising represents only a part of all marketing activities, it seems an illogical choice to transfer all customer data to a tool that is only being used for one channel.
So actually it is not a matter of choosing between a Customer Data Platform and a Data Management Platform. If you want to do it right, you need both. Each system is responsible for part of what you need in data driven marketing, together they will boost performance of the full marketing program.
2018: the year of the Customer Data Platform
2018 is the year of the Customer Data Platform. Well, finally. According to us, this should have been the case years ago, but we’re only happy it’s on the agenda now. Industry…
The Connected World theory is a new way to view the IT landscape. The pace of growth in technology is so fast, that the concept of one system for all problems no longer works. It is much more important to…