Join me, co-author Martin Kihn and our friend Art Sebastian, head of digital for Casey’s discuss CDPs and their impact on personalization.
I jumped into my friend’s amazing blog to write about the “five Vs” that every CDP needs to be successful. Read the full article on Vala’s ZDNet blog!
The rise of the customer data platform has been interesting to watch. CDPs are an exciting new software category, and most progressive organizations are looking at them as a way of solving some fundamental business challenges — how do you get a “single source of truth” for customer data, when customers create so much of them? Data, that is.
Endless advertising and martech software acquisitions, patched together through brittle “data extensions” and manual integrations lead to many differing views of customers, mostly centered on what channel they are engaging on. Companies tend to have a “marketing” customer they can understand through interactions in e-mail, an “advertising” customer they know through pseudonymous online interactions, and “sales” customers they understand by their profile in a CRM system. Connecting those identities into a rich profile can unlock a lot of value.
Imagine if the call center employee, for example, could have access to a rich profile of every customer that included her recent purchases, loyalty status and points, marketing interactions, and lifetime value score? You might be able to have a real, personalized interaction rather than reading from a canned call script. Imagine further, if the system was smart enough to assign an inbound call priority based on those data attributes, such that a “Platinum” loyalty member got routed to the local call center, rather than the overseas location? Better, more personalized, service. Less customer churn. The possibilities are endless!
The good news is that this is happening today. Large enterprises with sophisticated IT departments, in-house developers, and large software budgets are connecting these systems together to create such results. The bad news is that it’s very expensive, requires constant vigilance and development to keep it working, and its dependent upon licensing solutions from dozens of software vendors for data ingestion to data activation, and everything in between.
The other problem is that this innovation seems to be aimed solely at marketing use cases today. Despite the fact that 80% of companies we surveyed in our State of Marketing Report say they have already begun to connect their marketing and service systems, today’s CDPs seem to be narrowly focused on marketing, advertising, and personalization use cases. But why stop data management there?
If you are embarking on a true data management journey and want some guideposts for building a system that can truly connect your entire enterprise at the data platform layer (where it counts), there are five critical things to think about:
Your systems need to manage a high volume of data, coming in at various speeds. Some data, such as CRM and legacy enterprise system data is slower moving, and generally comes in via batch mode, in the form of tables. These are things like customer records, purchase history data, and the like. But there’s a lot of data that needs to some into the system in real time. A online customer looking for a local store where they can apply an offer they received is information happening in real time that can be applied to real world use cases. Unless you can read and react to that signal quickly, they are likely find the nearest competitor. So having a system that can handle data at many different speeds is a requirement, especially as more and more signals are created from real time and real life interactions.
You then need to map first-party data into a single information model. Data silos, as discussed above, are just the tip of the iceberg. It’s obvious that connecting marketing, advertising, and CRM systems can create new use cases that drive business value, but the true underlying issue isn’t the systems themselves, but how they store data. One system labels a first name as “First_Name” and another as “FirstName.” It seems trivial, but every system has a slightly different main identifier or “source of truth,” and the goal is to have one. This starts with being able to provision a universal information model, or schema, which can organize all of the differently labeled data into a
common taxonomy. Companies are starting to organize around a Common Information Model (The “Cloud” Information Model for companies like Google, Amazon, and Salesforce) as a way of creating a Rosetta Stone for data.
Companies must ensure they can provision a single, persistent profile for every customer or account. Social media systems think of your social “handle” as your primary identifier. E-mail systems use the e-mail address. DMPs usually see people as cookies. Every system is somewhat different. How do you get a “single source of truth” for people data? All of these identity types need to roll up to a rich profile or universal ID. This gets resolved in “known” PII data by making sure one person is the same among many different e-mail and postal addresses, as an example. In the digital world, where people tend to have dozens of cookies and device IDs, these identifiers also need to be mapped to the universal ID. It’s a hard problem to solve, but a system that has a strong identity spine is the only way to get there.
Once you manage to resolve and identify data from many different sources and systems, you end up with…a lot of data. It has been theorized that, in 2020, 1.7MB of data was created every second for every person on earth. That’s hard to fathom, but it’s a problem that is not going away in a world that increasingly values every click, call, and video view. If you want to use those interactions to form the basis of your digital engagement strategy, you have to store them somewhere. That necessitates a system that can handle billions of data attributes, millions of rows, and thousands of interconnected tables. Machine learning works best when pointed at petabytes of analytic data. Your system needs to be built for a world in which more data is created every day, and there are more systems that require them to work well.
The real question is, how do you make data actionable in every channel — marketing, sales, service, commerce, and analytics — and get tangible value from them? Once you have a clean, unified set of scaled data there are many ways to derive value from it. Segmentation tools can pull data from any source and stitch it into scaled groups of addressable customers. Analytics tools get more powerful when analyzing a robust and comprehensive dataset whether for BI or for media analytics. The best part? AI systems get more powerful. Success in machine learning is not about the algorithms — it’s about giving them the ability to run across a highly scaled, true, set of data that creates results.
If you are thinking about starting your company’s digital transformation journey with a CDP or an enterprise data management system, the five Vs are a great framework for success.
I joined hosts Martin Kihn and Tina Rozul to discuss all things CDP (Customer Data Platform) on the popular Marketing Cloud podcast.
The authors of Customer Data Platforms join my friend Russ Artzt, co-founder of Computer Associates, to talk about CDPs and the new book on the Datavana podcast, hosted by Jaime Muirhead
Great conversation about CDPs with Vala Afshar and Ray Wang, hosts of DisrupTV on CDPs with my co-author Martin Kihn (starts at 22:33).
I’m very excited to announce a new book I have written with Martin Kihn, which is the first book on the customer data platform (CDP) category, a very hot topic in advertising and marketing technology right now! Look for it in November 2020, from Wiley. Pre-order the hardcopy here.
Marketers are faced with a stark and challenging dilemma: customers demand deep personalization, but they are increasingly leery of offering the type of personal data required to make it happen. As a solution to this problem, Customer Data Platforms have come to the fore, offering companies way to capture, unify, activate, and analyze customer data. CDPs are the hottest marketing technology around today, but are they worthy of the hype? Customer Data Platforms takes a deep dive into everything CDP so you can learn how to steer your firm toward the future of personalization.
Over the years, many of us have built byzantine “stacks” of various marketing and advertising technology in an attempt to deliver the fabled “right person, right message, right time” experience. This can lead to siloed systems, disconnected processes, and legacy technical debt. CDPs offer a way to clear out the cobwebs and easily solve for a balanced and engaging customer experience. Customer Data Platforms breaks down the fundamentals, including how to:
Understand the problems of managing customer data
Understand what CDPs are and what they do (and don’t do)
Organize and harmonize customer data for use in marketing
Build a safe, compliant first-party data asset that your brand can use as fuel
Create a data-driven culture that puts customers at the center of everything you do
Understand how to leverage AI and machine learning to drive the future of personalization
Orchestrate modern customer journeys that react to customers in real-time
Power analytics with customer data to get closer to true attribution
In this book, you’ll discover how to build 1:1 engagement that scales at the speed of today’s customers.
According to Blue Kai, I’m a tech-savvy, social media-using bookworm in the New York DMA, currently in the market for “entertainment.” At least that’s what my cookie says about me. Simply by going to the Blue Kai data exchange’s registry page, you can find out what data companies and resellers know about you, and your online behavior and intent.
In this brave new world of data-supported audience buying, every individual with an addressable electronic device has been stripped down to an anonymous cookie and is for sale. My cookie, when bounced off various data providers, also reveals that I’m male (Acxiom), have a competitive income (IXI), three children in my family (V12), a propensity for buying online (Targusinfo) and am in mid-management of a small business (Bizo). I’m also in-market for a car (Exelate) and considered to be a “Country Squire,” according to Nieslen’s Prizm, which is essentially a boring white guy from the suburbs who “enjoys country sports like golf and tennis.” Well, I’m horrible at tennis, but everything else seems to be accurate.
As a marketer, you now have an interesting choice. Instead of finding “Country Squire” or “Suburban Pioneer” on content-specific sites they’re known to visit, now I can simply buy several million of these people, and find them wherever they may be lurking on the Web. This explains why you suddenly see ads for BMWs above your Hotmail messages right after you looked at that nice diesel station wagon on the VW.com Web site.
Today’s real-time marketing ecosystem works fast and works smart. But, how do you decide whether to buy the cookie or the site?
Most marketers insist that audience buying is meant for performance campaigns. This is largely a pricing consideration. Obviously, if I want to sell sneakers to young men, it makes sense to buy data and find 18-35-year old males who are “sneaker intenders” based on their online behavior and profile, and reach them at scale across the ad exchanges. Combined data and media will likely be under a $4 CPM, and probably less since both the data and media can be bid upon in real time. For most campaigns with a CPA south of $20, you need to buy “cheap and deep” to optimize into that type of performance. It sounds pretty good on paper. There are a few problems with this, however:
What are they doing when you find them?
OK, so you found one of your carefully selected audience members and you know he’s been shopping for shoes. Maybe you even retargeted him after he abandoned his shopping cart at footlocker.com and dynamically presented him with an ad featuring the very sneakers he wanted to buy, and you did it all for a fraction of a cent. The problem is that you reached him on Hotmail and he’s engaged in composing an e-mail. What are the chances that he’s going to break task and get back into the mind-set of purchasing a pair of sneakers? Also, what kind of e-mail is he composing? Work? A consolation note to a friend who has lost a loved one? Obviously, you don’t know.
Maybe you reached that user on a less than savory site, or perhaps on a social media site where he’s engaged in a live chat session with a friend. In any case, you have targeted that user perfectly—and at just the wrong time. This type of “interruption” marketing is exactly what digital has promised us it wouldn’t be.
Perhaps a better conversion rate can be found on ESPN.com, or a content page about basketball, where that user is engaged in content appropriate to the brand.
How do you know where the conversion came from?
Depending on your level of sophistication and your digital analytics tool set, you may not be in the best position to understand exactly where your online sales are coming from. If you’re depending on click-based metrics, that is even more true. As a recent comScore article points out, the click is a somewhat misleading metric. Put simply, clicks on display ads don’t take branding or other Web behavior into account when measuring success.
Personally, I haven’t clicked on a display ad in years, but seeing them still drives me to act. Comparing offline sales life over a four-week period, comScore reports that pure display advertising provides average lift of 16 percent and pure SEM provides lift of 82 percent—but search and display combined provide sales lift of 119 percent. So you simply can’t look at display alone when judging performance—and you have to question whether you’re seeing performance lift because you’re targeting, or because your buyer has been exposed to a display ad multiple times. If it’s the latter, you may be inclined to save the cost of data and go even more “cheap and deep” to get reach and frequency.
How do you value an impression?
Obviously, the metric we all use is CPM, but sometimes the $30 CPM impression on ESPN.com is less expensive than the $2 RTB impression from AdX. Naturally, your analytics tools will tell you which ad and publisher produced the most conversions. Additionally, deep conversion path analysis can also tell you that “last impression” conversion made at Hotmail might have started on ESPN.com, so you know where to assign value.
But, in the absence of meaningful data, how do we really know how effective our campaign has been? I believe that display creates performance by driving brand value higher, and some good ways to measure that can now be found using rich media. When consumers engage within a creative unit, or spend time watching video content about your brand, they’re making a personal choice to spend time with your message. There’s nothing more powerful than that, and that activity not only drives sales, but helps create lifetime customers.
For today’s digital marketer, great campaigns happen when you understand your customer, find them both across the Web and on the sites for which they have an affinity—and find them when they are engaged in content that’s complementary to your brand message. Hmmm . . . that kind of sounds like what we used to do with print advertising and direct mail. And maybe it really is that simple after all.
Chris O’Hara is svp of sales and marketing for Traffiq. He may be reached through his blog at Chrisohara.com.
Today’s consumers are highly demanding. They expect curated movie recommendations from Netflix, one-click restaurant reservations from OpenTable, on-demand limousine service from Uber, limitless housing options from AirBnB and the world of commerce available 24/7 from Amazon Prime. It’s a great time to be alive for a consumer, but perhaps the worst possible time for the CMO of any other company. Just think, Uber doesn’t own cars. They are a technology company built from the ground up to deliver personalized service at scale to consumers—that’s what today’s marketing is all about.
Only a few short years ago, CMOs had a difficult, but simpler, remit: build the brand and the consumers follow. Absolut vodka was about as undifferentiated a product as anything on the market, but great packaging and a clever ad campaign made it a power brand. It thrived because the world still worked on the principles of How Brands Grow, Byron Sharp’s 2010 book. Sharp posited that a marketer needed two things to succeed: availability in the consumer’s mind and availability of the product at the shelf. Brands like P&G’s Tide control lots of mindshare with mass media budgets, and P&G ensures it is widely available at every supermarket so a consumer can easily choose between it and Wisk at the “moment of truth.”
That system is dying rapidly, as mass media channels become fragmented into thousands of websites, apps, streaming media channels and experiences we don’t even understand yet. As a marketer, you can’t “buy eyeballs” today like you used to. This paradigm is largely responsible for the ever-shrinking average CMO tenure (from 44 months last year to only 42 months today). CMO’s must be prepared to insert themselves along steps of the consumer journey that move from channel to channel, and also have the ability to capture each tiny piece of digital exhaust that consumers’ gadgets and gizmos throw off, helping to inform their understanding of how they engage with a brand.
To make it clear, here’s a chart:
|OLD CMO||NEW CMO|
|Rents access to people||Owns people data|
|One-to-many marketing||One-to-one engagement|
|Big bets on limited channels||Small bets on dozens of channels|
|One “big tent” message for many||Dozens of messages for segments|
|Panel-based attribution||Real-time feedback|
|Agency defines strategy||Marketer owns strategy, agency executes|
Yesterday’s CMO would “buy eyeballs” with big TV and print campaigns, and use subscriber information as a proxy for targeted reach. Today’s CMO wants to own cookies and mobile keys so they can have a one-to-one conversation. Yesterday’s CMO looked at the performance at the end of a campaign, and optimized for the next one based on results from a survey. Today’s CMOs crave access to real-time performance data so they can optimize at run time. Things couldn’t be more different.
In this new norm, what should CMOs do to ensure they stay ahead of the curve? They have to change the way they think about consumer identity and how that impacts their work as marketers–and redefine the way they think about “marketing” in general.
Identity beyond IDs
A few months ago, I wrote that “identity is the new basis of competition” in marketing. That’s still true—you can’t build meaningful cross-channel experiences if you can’t tie people together with their devices. To that end, I recently was invited to an internal town hall with marketers from a large beauty company where the CMO announced that they just now eclipsed over 500 million addressable IDs in their data management platform. Her staff started clapping. Why? Because these weren’t known buyers, just cookies and mobile IDs—but they represented the ability for marketers to connect and build experiences for anonymous people who interacted with their website, mobile app or an ad. That has real, tangible value.
But, devices don’t buy things, people do. Just because you have a good device graph with billions of cookies, e-mail addresses and mobile keys doesn’t mean you have a good view of the people behind that information. Identity data must be augmented with data from systems of engagement to formulate a true view of the consumer. Every click, download, article read, and video view throws off digital exhaust that is filled with scraps of information that machines can use to paint a truer picture of a consumer’s identity. When marketers start valuing all data as a financial asset, they are starting the process of turning IDs into people.
For those of us in the industry, we can be forgiven if we think the world revolves around display, social, mobile and video advertising. We’ve gotten really good at delivering personalized digital experiences in real time, and we have a Lumascape full of clever technologies that are moving the needle for brands that are trying to reach connected consumers. CMOs must think outside the Lumascape, and connect these important addressable touchpoints to mass channels like TV, radio and print in order to deliver personalized experiences at scale.
More than Marketing
The problem is that our definition of marketing often misses the concept of touch points that can exist separately from marketing. These touch points can include interactions between salespeople and potential customers, what happens when a product is returned, conversations on community sites and forums where customers talk to each other about a brand, and also within the e-commerce experience when a consumer is making a purchase. These are arguably more valuable interactions with consumers than a digital banner ad or email because these are either people that are existing customers or those about to buy. They’re incredibly valuable to a brand and don’t involve the traditional notion of “marketing” whatsoever.
Let’s take a look at an example. I fly Delta because I love their app, and they reward my loyalty with special phone numbers so I can reach someone no matter how hairy things get throughout my travel experience. Every time I interact with their website, app and service representative is an opportunity for Delta to market to me—and also an opportunity for the brand to learn more about the way I fly and what matters most to me as a consumer. Getting it consistently right keeps me loyal, but getting even slightly wrong brings me one step closer to tweeting #DeltaStinks. Not fair, but that’s representative of brand relationships today.
To be successful, CMOs must expand their definition of identity. “Identity” is more than just an ID. It’s what is formed after capturing every possible insight from every interaction. And “marketing” is not just about cross-channel messaging, it’s about creating great consumer experiences with every touchpoint that happens including sales, service, commerce and more.
It’s a great time to be a data-driven marketer.
[This article originally appeared in AdExchanger on 10.16.2017]