Understanding Marketing Data Platforms

With the emergence of Customer Data Platforms (CDP), marketers are becoming even more confused about the marketing data management space. In this article Peter Rogers, Vice President of Technology at Merkle, defines, the landscape, articulate the differences in the tools and make the case that brands need a DMP, CDP and a marketing database 

It’s a universal truth in marketing: you must have good consumer data to fuel successful campaigns, precise analytics, and accurate reporting. However, the technology that drives data enablement has become very complex and leads to confusion for many marketers. In addition to the core marketing database, marketers today need a data management platform (DMP) and a customer data platform (CDP) to properly manage their data requirements. Each has important functionality and should be architected to work together to create a powerful data-driven martech stack.

Marketing Database

The most mature of the data platforms is the marketing database. Brands have been using marketing databases to drive direct mail and email campaigns for decades. Large direct marketers have always understood the value in having a single 360° view of their customers for reporting and analytics. A traditional marketing database is often viewed by modern marketers as legacy technology, even obsolete and unnecessary. While there are newer technologies available that improve the effectiveness and efficiency of a well-rounded marketing plan, a single source of data is vital to the process.

The marketing database provides a few key functions that aren’t provided by the other platforms.  Those include offline ID management, data hygiene, big data analytics, and potentially real-time interaction support. 

Data Management Platform (DMP)

DMPs are vital for managing cookie audiences across paid and owned media. By collecting real-time cookie data from display, site, mobile, etc., brands can gain true visibility into impressions from the audience to audience, providing great personalized, relevant experiences. DMPs are also a gateway to second- and third-party data. Brands use this platform to buy third-party data or partner with other organizations to share second-party data. The greatest value from the DMP comes when audience data have been used to personalize the site experience. 

The biggest drawback of the DMP is the lack of personally identifiable information (PII). 

Customer Data Platform (CDP)

The new player in the marketing data landscape is the customer data platform (CDP). This is the area that is the most confusing for people, due to the overlap it introduces among the three technology capabilities – or worse, the illusion of overlap. Some features sound like they are the same, but when you get into deployment, you realize they are not.  Adding this third option has multiplied the complexity of technology decisions. 

CDP’s provide two very valuable functions not provided in the prior two data solutions. The first is real-time, PII-based audience management. Using signals collected from your site or other owned media, you can create audiences based on real people and use that for personalized offers or experiences. CDPs also provide real-time identity resolution. Most brands have nailed offline ID management to connect consumers through customer data integration (CDI), but very few have efficiently nailed the management of digital data integration, and more importantly, connecting these digital interactions to the offline CDI side. This is a key part of the understanding of consumers’ interaction points across media and channel. It is also needed for accurate fractional attribution.

What does this mean for you?

For larger organizations, all these tools are vital to a robust martech capability. They need to centralize all the data and gain insights in the marketing database; manage large media spend across DSPs; use third-party data with the DMP; and finally, use the CDP to connect the audiences between the other two platforms with real-time ID management. For small organizations with very little martech in place, a CDP is a good place to start. They have many audience management functions that are typically seen in campaign automation tools but at a fraction of the licensing and deployment costs. 

Many vendors promise a magical data solution that can solve all your data needs in the cloud.  Remember, collecting data from disparate sources is still messy work that requires a database or data platform. This should be the place for doing raw analysis and data hygiene. Every organization will have a “right” combination of the three tools that will be best suited for them. Organizations should work hard to understand where they are and where they are going as a business, so they can confidently determine what the combination of tools looks like for them.