The Technology Layer Cake

 

This cake doesn’t look all that appealing, but thinking of your marketing stack in such a way is helpful. Think of the cream filling as helpful client success personnel should you want to extend the metaphor.

I saw a great presentation at this year’s Industry Preview where Brian Anderson of LUMA Partners presented on the future of marketing clouds. His unifying marketechture drawings looked like an amalgamation of various whiteboarding sessions I have had recently with big enterprise marketers, many of whom are building the components of their marketing “stacks.” Marketers are feverishly licensing offerings from all kinds of big software companies and smaller adtech and martech players to build a vision that can be summed up like this:

 

The Data Management Layer

Today’s “stack” really consists of three individual layers when you break it down. The first layer, Data Management (DM), contains all of the “pipes” used to connect people identity together. Every cloud needs to take data in from all kinds of sources, such as internet cookies, mobile IDs, hashed e-mail identity keys, purchase data, and the like. Every signal we can collect results in a richer understanding of the customer, and the DM layer needs access to rich sets of first, second, and third-party data to paint the clearest picture.

The DM layer also needs to tie every single ID and attribute collected to an individual, so all the signals collected can be leveraged to understand their wants and desires. This identity infrastructure is critical for the enterprise; knowing that you are the same guy who saw the display ad for the family minivan, and visited the “March Madness Deals” page on the mobile app goes a long way to attribution. But the DM layer cannot be constrained by anonymous data. Today’s marketing stacks must leverage DMPs to understand pseudonymous identity, but must find trusted ways to mix PII-based data from e-mail and CRM systems. This latter notion has created a new category—the “Customer Data Platform” (CDP), and also resulted in the rush to build data lakes as a method of collecting a variety of differentiated data for analytics purposes.

Finally, the DM layer must be able to seamlessly connect the data out to all kinds of activation channels, whether they are e-mail, programmatic, social, mobile, OTT, or IOT-based. Just as people have many different ID keys, people have different IDs inside of Google, Facebook, Pinterest, and the Wall Street Journal. Connecting those partner IDs to an enterprises’ universal ID solves problems with frequency management, attribution, and offers the ability to sequence messages across various addressable channels.

You can’t have a marketing cloud without data management. This layer is the “who” of the marketing cloud—who are these people and what are they like?

The Orchestration Layer

The next thing marketers need to have (and they often build it first, in pieces) is an orchestration layer. This is the “When, Where, and How” of the stack. E-mail systems can determine when to send that critical e-mail; marketing automation software can decide whether to put someone in a “nurture” campaign, or have a salesperson call them right away; DSPs decide when to bid on a likely internet surfer, and social management platforms can tell us when to Tweet or Snap. Content management systems and site-side personalization vendors orchestrate the perfect content experience on a web page, and dynamic creative optimization systems have gotten pretty good at guessing which ad will perform better for certain segments (show the women the high-heeled shoe ad, please).

The “when” layer is critical for building smart customer journeys. If you get enough systems connected, you start to realize the potential for executing on the “right person, right message, right time” dynamic that has been promised for many years, but never quite delivered at scale. Adtech has been busy nailing the orchestration of display and mobile messages, and the big social platforms have been leveraging their rich people data to deliver relevant messages. However, with lots of marketing money and attention still focused on e-mail and broadcast, there is plenty of work to be done before marketers can build journeys that feature every touchpoint their customers are exposed to.

Marketers today are busy building connectors to their various systems and getting them to talk to each other to figure out the “when, where, and how” of marketing.

The Artificial Intelligence Layer

When every single marketer and big media company owns a DMP,and has figured out how to string their various orchestration platforms together, it is clear that the key point of differentiation will reside in the AI layer. Artificial intelligence represents the “why” problem in marketing—why am I e-mailing this person instead of calling her? Should I be targeting this segment at all? Why does this guy score highly for a new car purchase, and this other guy who looks similar doesn’t? What is the lifetime value of this new business traveler I just acquired?

While the stacks have tons of identity data, advertising data, and sales data, they need a brain to analyze all of that data and decide how to use it most effectively. As marketing systems become more real-time and more connected to on-the-go customers than ever before, artificial intelligence must drive millions of decisions quickly, gleaned from billions of individual data points. How does the soda company know when to deliver an ad for water instead of diet soda? It requires understanding location, the weather, the person, and what they are doing in the moment. AI systems are rapidly building their machine learning capabilities and connecting into orchestration systems to help with decisioning.

All Together Now

The layer cake is a convenient way to look at what is happening today. The vision for tomorrow is to squish the layer cake together in such a way that enterprises get all of that functionality in a single cake. In four or five years, every marketing orchestration system will have some kind of built-in DMP—or seamless connections to any number of them. We see this today with large DSPs; they all need an internal data management system for segmentation. Tomorrow’s orchestration systems will all have built-in artificial intelligence as a means for differentiation. Look at e-mail orchestration today. It is not sold on its ability to deliver messages to inboxes, but rather on its ability to provide that service in a smarter package to increase open rates and provide richer analytics.

It will be fun to watch as these individual components come together to form the marketing clouds of the future. It’s a great time to be a data-driven marketer!

[This post was originally published April 4, 2017 on Econsultancy blog

Deepening The Data Lake: How Second-Party Data Increases AI For Enterprises

I have been hearing a lot about data lakes lately. Progressive marketers and some large enterprise publishers have been breaking out of traditional data warehouses, mostly used to store structured data, and investing in infrastructure so they can store tons of their first-party data and query it for analytics purposes.

“A data lake is a storage repository that holds a vast amount of raw data in its native format until it is needed,” according to Amazon Web Services. “While a hierarchical data warehouse stores data in files or folders, a data lake uses a flat architecture to store data.”A few years ago, data lakes were thought to be limited to Hadoop applications (object storage), but the term is now more broadly applied to an environment in which an enterprise can store both structured and unstructured data and have it organized for fast query processing. In the ad tech and mar tech world, this is almost universally about first-party data. For example, a big airline might want to store transactional data from ecommerce alongside beacon pings to understand how often online ticket buyers in its loyalty program use a certain airport lounge.

However, as we discussed earlier this year, there are many marketers with surprisingly sparse data, like the food marketer who does not get many website visitors or authenticated customers downloading coupons. Today, those marketers face a situation where they want to use data science to do user scoring and modeling but, because they only have enough of their own data to fill a shallow lake, they have trouble justifying the costs of scaling the approach in a way that moves the sales needle.

Figure 1: Marketers with sparse data often do not have enough raw data to create measureable outcomes in audience targeting through modeling. Source: Chris O’Hara.

In the example above, we can think of the marketer’s first-party data – media exposure data, email marketing data, website analytics data, etc. – being the water that fills a data lake. That data is pumped into a data management platform (pictured here as a hydroelectric dam), pumped like electricity through ad tech pipes (demand-side platforms, supply-side platforms and ad servers) and finally delivered to places where it is activated (in the town, where people live).As becomes apparent, this infrastructure can exist with even a tiny bit of water but, at the end of the cycle, not enough electricity will be generated to create decent outcomes and sustain a data-driven approach to marketing. This is a long way of saying that the data itself, both in quality and quantity, is needed in ever-larger amounts to create the potential for better targeting and analytics.

Most marketers today – even those with lots of data – find themselves overly reliant on third-party data to fill in these gaps. However, even if they have the rights to model it in their own environment, there are loads of restrictions on using it for targeting. It is also highly commoditized and can be of questionable provenance. (Is my Ferrari-browsing son really an “auto intender”?) While third-party data can be highly valuable, it would be akin to adding sediment to a data lake, creating murky visibility when trying to peer into the bottom for deep insights.So, how can marketers fill data lakes with large amounts of high-quality data that can be used for modeling? I am starting to see the emergence of peer-to-peer data-sharing agreements that help marketers fill their lakes, deepen their ability to leverage data science and add layers of artificial intelligence through machine learning to their stacks.

Figure 2: Second-party data is simply someone else’s first-party data. When relevant data is added to a data lake, the result is a more robust environment for deeper data-led insights

for both targeting and analytics. Source: Chris O’Hara.

In the above example (Figure 2), second-party data deepens the marketer’s data lake, powering the DMP with more rich data that can be used for modeling, activation and analytics. Imagine a huge beer company that was launching a country music promotion for its flagship brand. As a CPG company with relatively sparse amounts of first-party data, the traditional approach would be to seek out music fans of a certain location and demographic through third-party sources and apply those third-party segments to a programmatic campaign.But what if the beer manufacturer teamed up with a big online ticket seller and arranged a data subscription for “all viewers or buyers of a Garth Brooks ticket in the last 180 days”?

Those are exactly the people I would want to target, and they are unavailable anywhere in the third-party data ecosystem.The data is also of extremely high provenance, and I would also be able to use that data in my own environment, where I could model it against my first-party data, such as site visitors or mobile IDs I gathered when I sponsored free Wi-Fi at the last Country Music Awards. The ability to gather and license those specific data sets and use them for modeling in a data lake is going to create massive outcomes in my addressable campaigns and give me an edge I cannot get using traditional ad network approaches with third-party segments.Moreover, the flexibility around data capture enables marketers to use highly disparate data sets, combine and normalize them with metadata – and not have to worry about mapping them to a predefined schema. The associative work happens after the query takes place. That means I don’t need a predefined schema in place for that data to become valuable – a way of saying that the inherent observational bias in traditional approaches (“country music fans love mainstream beer, so I’d better capture that”) never hinders the ability to activate against unforeseen insights.Large, sophisticated marketers and publishers are just starting to get their lakes built and begin gathering the data assets to deepen them, so we will likely see a great many examples of this approach over the coming months.

It’s a great time to be a data-driven marketer..