At this point, you’ve heard it so much that you know it in your bones—to build a brand, customer data is paramount. But, having a giant pile of data and knowing what to do with it are two very different things. In fact, the sheer amount of data is often overwhelming. According to Northwestern University, 2.5 exabytes of new data are created every day, and by 2020, the total amount of data will rise to 44 zettabytes. How does all this data get processed, categorized, and most importantly, utilized? A data platform. But, how do you know which is the right fit? To answer that question, you need to know the difference between data management platforms, customer data platforms and data orchestration.
Data Management Platforms
DMP (Data Management Platform) is software that holds audience data from a variety of information sources, but with an emphasis on third-party data. Marketers most often use DMPs to manage cookie IDs and generate audience segments for ad targeting. Though DMPs are capable of integrating first-party data, it is most often anonymized, with no personally identifiable information (PII). There are a few obvious drawbacks to using DMPs.
First, the data that is purchased for DMP usage comes from third-parties. This means that this same data is most likely also available to your competitors, offering no differentiating edge. Second, because the data does not come internally, things naturally become nebulous. There is not always clarity on where the data came from, in what way it was collected, and the overall accuracy. Lastly, popular sources for data, such as Google and Facebook, have severely curtailed their sharing of data, making DMPs that rely on these tech giants much less viable.
Marketers are becoming more sensitive to consumer attitudes around sharing data through third parties. According to recent eMarketer survey, 80.1% of respondents (North American consumers) said they would be comfortable sharing personal information directly with a brand for personalizing marketing messages. But, just 16.7% said they would be ok with sharing this type of information through third parties. So, marketers are looking for data platforms with a strong capability for managing first-party data.
Customer Data Platforms
CDPs (short for Customer Data Platforms) is software that houses customer data, such as name, location, website visits, email responses, purchase orders, and social media interactions. It is supposed to create a comprehensive view of individual customers by linking data and tracking behavior. Some of this customer data is known as personally identifiable information. It should be noted that CDPs are designed to manage information of this nature while DMPs are not.
CDPs are made for marketers to create targeted messaging and to track the results. But, as the Vice President and Principal Analyst of Forrester, Joe Stanhope states that generally “CDPs lack the critical capabilities needed to adequately help marketers: Their identity resolution capabilities are nascent; their functionality is often less sophisticated than existing tools in marketers’ tech stacks; and CDP users report having to do more legwork than expected to stand up their implementations.” In other words, while the concept of CDPs is a good one, they tend to under-deliver. Specifically because while CDPs make it easier for companies to identify their customer profile quicker, and provide in-depth analysis to create more relevant marketing strategies, a CDP can’t help activate that data in your campaigns.
Data Orchestration Platforms
Data Orchestration platforms combine the best features of both DMPs and CDPs. It emphasises PII data (like a CDP), but combines it with anonymous third-party data (like a DMP) to give clearer, more holistic customer insights. It is a centralized hub of your data sources, which can be monitored, segmented, and activated seamlessly. As Lineate states in its white paper on data orchestration,
The only way to garner a true 360° view of your customer is by resolving a user’s identity into a singular profile no matter what devices they use to interact with your brand—be it browsing the web, buying a product via Instagram, or opening an email.
Data orchestration does this, with the added benefit of consolidating data and reports throughout your business, allowing for better communication and workflow across departments, and decreasing time spent doing manual reporting.
Another data orchestration differentiator? Greater control over first-party data. All companies run campaigns to acquire new customers through third-party platforms like Facebook or Google Ads. But, when you upload first-party data to third-party platforms they receive granular information about your audience: names, past purchases, and more. While third-parties don't use that information from the get-go, they can use it once people from the lists you’ve uploaded take action on those channels. The platforms then have your data in their own segments which are, in turn, used by companies (and competitors) who run campaigns on those platforms.
Your audience data should be a major competitive differentiator. But, data becomes less valuable when it’s used to inform third-party segments. When you run campaigns through an in-house data orchestration platform, however, it ensures that you only provide third-party platforms with audience ID numbers—not granular audience information. The result? An ability to take control of your first-party data to create valuable information that only your company can fully access to target the right people across all channels and devices. Plus, data orchestration allows for cross-channel campaign activation in-platform, feeding any audience data directly back into the system for continually optimized performance.
By combining the strengths of DMPs and CDPs, data orchestration is clearly the best way to tackle and utilize the deluge of customer information we receive. If you would like to schedule a demo with Lineate’s own Data Orchestration tool, DataSwitch, reach out on our contact us page.