[Tech Talks] Why do customer data platforms matter in the new age of marketing?
Updated: Aug 31, 2020
Customer Data Platforms are one of the most popular buzzwords in marketing these days.
We live in a customer-driven world where businesses sell experiences, not just products. Consumer expectations are very high and the amount of data generated by customers at various touchpoints in a complex environment gives brands & marketers the ability to drive marketing through intelligence.
Gaurav Kumar, Senior Solutions Consultant, SEA - Experience Cloud at Adobe explains what customer data platforms (CDPs) are and how they can be used to achieve intelligence-led experience management.
What is a Customer Data Platform (CDP) and why does it matter in the new age of marketing?
One of the biggest hurdles in achieving intelligence-led experience management has been fragmentation – fragmentation of technology, data and fragmentation of consumer journeys. CDP is the solution that solves this.
Customer Data Platforms are packaged enterprise systems that collect, unify and govern customers’ data across touchpoints, in order to build a single view of the customer , for complete visibility and actionability throughout the customer journeys.
CDPs are not CRMs. CRMs (Customer relationship management systems) traditionally have been systems of records and only ensure collection and storage of data whereas CDPs are a system of intelligence that collects and integrates data, in order to execute multiple use cases across personalization, advertising and insights.
CDPs are also not DMPs. DMPs, or data management platforms, are largely advertising-driven and host a lot of third-party and unknown data, only with the intent of activating advertising. DMPs are a Martech stack and CDPs are an Enterprise Information stack.
CDPs are first-party data-driven and the core purpose is to collect, integrate and consume first-party data for various data-driven marketing purposes. However, CDPs and DMPs can complement each other.
What are the key components of a CDP?
Data Collection & Management – CDPs should be able to collect and manage data from various sources and in varied formats such as batch data, real-time streaming, transaction, behavioural, loyalty etc.
Integration – This is all about stitching the identities of consumers in order to get unified profiles, with the aim of being more and more accurate and non-redundant and getting closer to knowing customers as “people”.
Data Augmentation – This encapsulates bringing second-party and third-party data to enrich the unified profile.
Data delivery – This is the mechanism that needs to be built to deliver the data for various purposes such as advertising, analytics and data science or personalization.
Data Privacy – Consent management is also a vital part of the CDP implementation.
Benefits and usage of CDPs
CDPs have become the source of intelligence with first-party data and integration of that data in advertising, leading to ad optimisation, customer lookalike-based acquisition and retargeting.
CDPs are also drivers for personalization across different channels, first-party intelligence provides the right insights into the customer journey, in order to create personalized experiences.
Last but not least, CDPs are the core system for analysis and insights around customers’ 360-degree behaviour.
In nutshell, CDPs have become the most important piece in solving the customer-centricity puzzle and more and more brands are rushing to adopt and build customer data platforms.
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