Tag Archives: First-Party Data

The Difference Between Data Management Platform (DMP) and a Customer Management Platform (CDP)

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A data management platform works as a warehouse, collecting, organizing and activating third-party data in a single place. Keep up and find out how to benefit from it!

Data is a crucial resource in this business era. However, it can be useless if the company doesn’t know how to professionally manage all that amount of information, wasting thousands of dollars advertising to an incomplete or insufficient database usage.

In a digital world of first, second and third-party information, a Data Management Platform, also known as DMP, can transform piles of databases into profitable resources. Take a look!

What is a Data Management Platform (DMP)

Customer experience is not a linear walk. They will leave crumbs of information all the way along their relationship journey with a company. That process results in the accumulation millions of data throughout the years from multiple sources.

Most times, those data can seem random, incoherent or fragmented. That may happen when there is no right management of it.

Then, some questions become trivial:

  1. Who are the visitors on my website?
  2. What are they looking for?
  3. How can you have direct contact with them?
  4. Why they are not making deals with me?

A data management platform (DMP) is a tool to filter all those pieces of information into organized profiles for audience segmentation or insights for decision-making.

After that, your company will know exactly who they supposed to talk to; how these audiences behave; what is the best approach along the sales funnel to them; if the investment made in advertisement campaigns has the appropriate segment and more.

You can even create cross-media analysis, which is when multiple platforms, on and offline, can support the same campaign.

How Does a DMP Work?

Operating as a central intelligence system for digital marketing, a DMP creates a perfect definition of your ideal customer by organizing millions of information into demographic, consuming habits, interests and so on.

You can obtain new forms of segmentation through DMP, such as a non-dependent on the context or content one. This new segment is now based on the profile of the audience, regardless of the advertisement subject or the platform displayed.

To function, a data management platform operates in four steps:

Collect

It all begins with data collection, third-party information acquired by relevant partners with similar or identical market spaces. These data can be provided from CRMs, customers’ registration, e-mails, website data, previous purchases and whatever more relevant material is available.

Even though DMP is made to operate third-party data, it also supports some first-party data to improve the information given.

Organize

In this step, the DMP classify the info into categories, grouping them as clusters. Clusters are a type of audience segmentation that combines customers with similar marketing sales behaviors in one file.

For example, it is possible to create a group of customers who has made most of their purchases by ad clicks, or those who spent a certain amount of money in a product or service related to yours, who has more visits in a specific category in a website that might fit your business, etc.

Activate

Now, it is crucial that the data management platform used is agnostic, which means it will be compatible with any digital platform. So, if the company wants to run a campaign for the brand in social media, websites, search engines, etc, it will be just fine. The activation itself happens when the campaign is on.

Learn

By analyzing the return over the investments made on the ads, it will be possible to understand the depth of cluster segmentation. The company will have more domain over the results acquired since the data is much more precise than any other type.

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What Can You Do With a Data Management Platform?

One of the main benefits a DMP provides is the cluster: high-detailed information about customers so you can create hyper-targeted ad campaigns, delivering more conversion rates and increasing the ROI of your company.

Using a DMP, you’ll be able to create accurate segmentation, making the proper usage of your third-party data by giving your audience the right message.

Practical Example

Imagine you run a dental clinic and want to expand your qualified leads base for a specific segment, let’s say dental implants. That is one of the most expensive procedures you have and it is not salable to any type of customer.

Typically, you would create a campaign based on people interested in dentistry or dental implants in a wide range, fitted in average age, near your clinic.

With a DMP, the depth of your segmentation reaches this: men and women, from 40 to 70 years old, who have downloaded some white papers about dental implants, researched a number of keywords that demonstrate the need for professional information and live within 5 km of the clinic.

Here are some possibilities your company can reach with this type of segmentation:

  • Retargeting: easily implement personalized retargeting campaigns based on specific activities and behaviors online.
  • Prospecting: integrate with third-party data sources for the acquisition of anonymous data, achieving greater precision and scale in online campaigns.
  • Website optimization: use your own or third-party data to provide customized content to different consumers when they come to your page.
  • Audience intelligence: cross your first-party data with other third-party to learn more about your audience and reach the people most likely to convert.
  • Better ROI: use an analytics tool that centralizes online campaign performance data to determine which audience segment performed best and where to focus your efforts in the future.
  • Productivity increase: eliminate the bottleneck of needing IT to reach out for your data and have all your teams able to take them out, ready to use.

DMP Benefits for Companies

So far, we have seen in order to escalate your business, having the right audience to talk to is fundamental. This is market intelligence. Your company can no longer have a vague idea of who their customer is. It is necessary to personalize and amplify to get the following benefits:

Cost-Effective Advertising Campaigns

When you have this level of audience segmentation, you can spend every dollar of your budget on better-targeted prospects. Get the return on the investment you need to.

Lower Technology Investments

To run a DMP, you won’t need an extra support. Your whole team, from customer success to follow-up sales, can easily operate the system. As we mentioned before, there is no need for IT.

First, Second, and Third-Party Data Combined

No data is left behind. Even a messy pile of customer information can turn into gold here. As this platform gathers and organizes party data, every piece of a database is important, nothing is wasted.

No Data, No Success

Regardless of the type of industry you are in, uncountable amounts of information are huddled and enter your company through different doors: billing spreadsheets, sales reports, feedback offered by different media, social networks, loss or conquest of new markets, CRM, etc.

Such a thing must be used to leverage business marketing strategies. That is the reason why it is so important to generate an efficient information collection, organization and analysis on a daily basis of a company, as DMP does.

From this, a strategy can be developed over decisions based on information, including those related to strategic and operational marketing. That is the Data-Driven Marketing.

Data-Driven Marketing

Data-Driven Marketing helps, for example, to create a guideline for campaigns using DMP clusters. Besides highlighting the features/benefits/quality/etc of a product or service, it enables a work of relevant engagement with your consumers, delivering exactly what they want.

As a result, communication is enhanced by user experience and becomes more aligned with the needs of its audience.

Strategies will be able to still cohesive and aligned even when using a larger number of channels. Marketing campaigns have been running more frequently in social networks, which is the place where interaction has a leading role.

It keeps getting more essential to own proper knowledge of the market slice you are in. Its audience and characteristics indicate the way your company should brand, advertise and sell their product.

Big Data

When we reach for the definition of Big Data, we find a true technological revolution, making more possible to qualify the results obtained. Big data is a master process of analyzing and interpreting a great volume of data stored somewhere remotely.

Information is available everywhere online in a non-confidential way. No matter how large the amount of information is, Big Data can reach and group them according to interests.

Big data can be used in several business routines. However, to use it properly, it is mandatory to have not only knowledge about the technology, but also to identify which are the touchpoints in your company that will be impacted by its implementation.

By that, it will be possible to make a more efficient allocation of resources and increase the return over the investment in those data analysis solutions. And that is how a Data Driven culture is established.

Thus, the company must act so all teams understand the importance of data integration in the definition of strategies and work based on that!

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How a DMP Can Boost Marketing and Sales Results

Marketing and sales work as the core of the data management platform. This is where it starts, through hyper-segmented audiences. One of the biggest mistakes –– and frequent too! –– of digital marketing campaigns is having an incorrect or too wide segmentation.

Besides impacting those who are not part of your true audience –– and might cause a bad reputation for you ––, there is going to be a significant waste of your marketing budget that may harm your ROI.

Every click or scroll on the screen can generate data. When your marketing strategy is aligned to DMP guidance, you hand over to sales team customers ready to spend their money.

DMP and Sales

At this stage, sales have a unified perspective over the data and better cards to play, such as real-time interactions.

This is a priority in marketing and sales now. A high-performance sales team, which are those with the upper sales amount, increase the chances of achieving their mark by real-time interactions with the customer.

But we are not talking about aggressive and unprepared approaches here. Sales’ strategy must contemplate the best ways to do it based on who is the audience. By that, the integration of the DMP with marketing and sales is crucial for higher performances.

The Main Differences Between DMP and CDP

There are a lot of similarities between Data Management Platform (DMP) and Customer Data Platform (CDP). But there are also some very specific characteristics we need to keep them well established. Here they are:

Data Collection

One of the main differences between CDP and DMP is that DMP uses cookies to track users’ movement and target marketing strategies more efficiently. DMP was developed to search for data on advertising networks.

On the other side, CDP is a technological advance that gathers customer data from different sources and use it to generate more appropriate content, email marketing or offers.

Objective

DMP was designed to create deeper segmentations for the marketing strategy. CDP focuses on improving conversion rates and customer engagement, creating a richer consumer profile with more information.

CDP is also able to capture information from different channels and devices, in an automated way.

Therefore, investing in a CDP or DMP allows you to transform your company, employing more resources and intelligence to the business, and promoting your brand to a great and higher level of reference and success in the market.

How about starting now? Arena has a Customer Data Platform solution for your company. Build your clusters, make better advertisements, and talk straight forward to the audience you need. Click here and visit Arena’s CDP page!

20 Ways to Boost Results with CDP

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From personalized advertising campaigns to attribution modeling, CDPs can help you extract the best out of your organization’s data

“Data is the new oil”, says the business cliché. No matter the sector your company operates, it certainly collects data from a number of sources – from unstructured qualitative data (from social media and call centers) to quantitative insights on paid campaign efforts and sales channels.

Marketing executives have increasingly more customer interactions to be aware of and are required to get a broad, deep picture of the audience’s needs and pain points.

A few years ago, it would have been enough just to have a DMP and CRM tool to manage customer data. They are still important today but hold limitations in capturing users’ journeys and profiles as standalone platforms.

A 2018 survey made by Forbes with 400 marketing leaders showed that most of them saw a gap in data management in their organizations, which is still true today. Only 19% reported having a robust set of analytics and technology tools to support customer-data-driven decisions. Besides, sometimes it can be challenging to make data accessible (and actionable) for marketing teams.

That is where customer data platforms come to play, with the purpose of connecting the dots between different data sources. Last year, the Gartner Institute pointed customer data platform as one of the four main emerging trends for marketers in 2020, along with blockchain, AI, and real-time marketing.

But what exactly is a CDP (Customer Data Platform)?

A Customer Data Platform is a software capable of unifying customer data from various sources, gathering quantitative and qualitative customer information across multiple touchpoints. It aggregates first, second and third-party data, as well as information collected from multiple channels, systems, and devices. 

If you lead marketing at a large company, you know how difficult it can be to connect user’s data, once the customer’s journey has become more complex with so many devices and channels available. 

With that in mind, we have prepared a list of 20 ways customer data platforms (CDPs) can improve your marketing strategy and results. 

1) Generating accurate customer profiles

CDPs can basically spot who your customers are – almost literally. They are able to filter all collected data through algorithms to determine unified customer profiles. In a single platform, It compiles identity, descriptive and behavioral data that can give you context on current customers and prospects, making it easier for marketers to build accurate personas. 

The type of data your team chooses to collect will vary according to your business and industry. If you work at a media company, for example, you’re probably more interested in customers’ preferred media channels than details about customer’s cars, information that would be crucial for car dealerships, on the other hand.

2) Accessing updates in real-time

Marketers know that customers’ preferences evolve over time, but most data management tools can’t always spot those changes. In CDPs, the processing of data happens in real-time, which makes it possible to spot changes in customer behavior in both the short and long-term. 

If a prospect stops using YouTube and migrates to Twitch, for instance, your team can quickly detect it and redirect campaigns.  

The long-term approach is also possible because CDPs can hold data for long periods of time, unlike data management platforms (DMPs), which usually hold data up to only 90 days (a cookie lifetime).

3) Avoiding data silos

Much of the data from an organization is generated and stored in different systems and departments, which makes it rarely accessible to other parts of the company. The result? A less collaborative corporate environment, less productivity, and less accurate customer profiles.

With CDPs, a great deal of a company’s data can be stored in a single, user-friendly interface. 

4) Giving marketers control over data management

For marketers, relying on other departments for reports and insights can be time-consuming and unproductive, since not everyone is on the same page about marketing needs. In that sense, CDPs also optimize the work of marketing professionals, because they can be managed by marketing teams instead of adjacent teams (like sales) or third-parties. 

Yes, CDPs should be useful to a variety of departments within a company, but every team can adapt their use according to specific goals while having access to all kinds of company data. That way, teams can also quickly scale marketing efforts and get new processes started in days, not months.

5) Understanding customers’ motivations

These days, brands don’t want to know just how a customer relates to their brand and category, but also what are his or her life aspirations and beliefs. Beyond customer profiles, CDPs can provide personality and behavioral data about customers, helping you understand their inner motivations as people, not just as customers. 

Almost like a social listening tool, you can find out the subjects they are discussing, topics they search for, preferences on content, politics, or products.

6) Connecting online and offline touchpoints

In a recent report, PWC found that the number of companies investing in omnichannel experiences has grown from 20% to more than 80% in recent years. While some marketers still struggle to be truly “omnichannel”, CDPs are able to track both online and offline customer data. 

A good CDP can combine information from various online and offline tracking applications, to get a full picture of where customers go, what products they search for, what they watch, read, or buy. A regular CRM tool, as a counterpoint, cannot pick up on offline data unless it’s manually setup.

7) Tracking interactions across different devices

Connecting interactions across multiple devices is also crucial for marketers who wish to provide seamless experiences to the audience. The CDP can connect interactions from a single person across different interfaces. 

The platform captures information such as time spent on the page, email and cookies used. If a customer accessed your page through different browsers at a desktop, and then accessed again through phone, a few days later,  you’ll know it. 

8) Optimizing targeted advertising campaigns

A CDP can automate the usually manual process of creating advertising audience clusters. From there, your team can use data to drive campaigns and promotions across multiple touchpoints, creating highly targeted, personalized advertising campaigns (CDPs can be integrated to Facebook pixels and Google Ads, for example).

Without a CDP, building these campaigns for complex audiences would take a lot more time and effort. The CDP lets you access clusters of customers and acknowledge what products they show interest in,  as well as their purchase intent and how likely they are to churn. 

9) Attracting Marketing Qualified Leads (MQLs)

A CDP is where Marketing, Sales Customer Experience and Customer Success meet. By centralizing information from these areas in a single platform, companies can optimize their marketing resources and efforts. If marketers can find out exactly where are the friction points in customers’ journeys, it’s more likely they will come up with the right messages and campaigns for every stage in the conversion funnel.

Ultimately, CDPs can support marketers in attracting more qualified leads. A study by Forbes shows that 53% of marketing executives are using CDPs to engage with existing customers’ needs, increasing the likelihood that they will become recurring clients.

10) Reducing operational costs and improving ROI

As customer data platforms can be considerably automated, they bolster efficiency and reduce operational costs. After all, if you know exactly who your customers are and can streamline the targeting process, it’s likely you’ll impact the right customers at the right moment with the right formats.

As a result, you can optimize Costs per Click (CPC), Costs per Impression (CPM), and Customer Acquisition Costs (CAC).

11) Tracking customer engagement (or disengagement)

In the myriad of data collected by CDPs, there are also quantitative and transactional data that reveal how your customer relates to your company. From buying history to abandoned carts, email click rates and responses, website visits, product views and social media engagement, your team can get a better sense of how’s the relationship between your audience and your company – and then manage it effectively.

12) Improving overall customer experience

A Walker study discovered that, by the end of 2020, customer experience will overtake price and product as the main brand differentiator among customers. When we talk about big companies and huge data sets, the lack of a CDP can actually result in poor customer experience.

Not integrating data results in friction along the customer journey, no wonder customers often complain about emails suggesting a product they just bought, or say they were impacted by wrongful ads and recommendations. Nowadays, people simply expect your company to know about their journey across different channels, and CDPs can help you a lot with that.

13) Boosting predictive marketing

Predicting customer behavior and preferences is what built companies like Amazon and Netflix. Predictive marketing is now becoming increasingly used by all sorts of businesses. This marketing technique, which determines the probability of success of different marketing strategies, is essentially fueled by data. 

Armed with a CDP, data scientists and marketing analysts can gather data from several sources and apply predictive models with a great level of accuracy.

14) Improving attribution models

With so many touchpoints with the audience, It is often difficult for companies to build a proper attribution model. According to Google, almost 80% of all transaction value involves at least two marketing channel interactions.

The customer data platform can optimize the attribution framework since marketers can send attribution data to the CDP and have a more accurate view of campaign performance.

15) Helping set realistic KPIs

By having a more holistic approach towards data, marketing teams can use CDP to measure and adjust expectations about key performance indicators (KPIs). You could even find out that your team is not tracking the right indicators, and choose new ones according to your strategy. 

However, when it comes to KPIs, CDPs must be used thoughtfully: more metrics possibilities don’t necessarily mean you’ll understand your customer better, so beware of the data that actually informs your strategy.

16) Complementing and optimizing existing marketing software

At the end of the day, marketers want more control over events in their channels, and so CDPs allow companies to deploy customers’ profiles to other marketing tools. Customer data platforms can be integrated to “delivery platforms” or “engagement platforms” to enable the planning of campaigns and messages.

CDPs can integrate your company’s email marketing or marketing automation software, website or social media platforms, and also live chat, CRM, analytics, and SMS tools. The amount of tools companies connect to their CDPs has to do, again, with the specifics of their business. Large businesses are likely to connect more tools than small companies.

17) Complying with data privacy regulations

One of the challenges marketers face is to balance personalization with data privacy, considering emerging privacy regulations worldwide. At first sight, it might look like a CDP could worsen privacy problems, since it tracks all sorts of data. From a practical standpoint though, a customer data platform can actually help companies comply with data privacy laws. 

To start, it collects mostly first-party data, which is key to data privacy. Second, it offers privacy configurations that can enforce your privacy policies. And third, a CDP acts as a single access point for data, which is safer than having multiple access points.

18) Experimenting with lower risks

CDPs are also a key engine for experimenting with emerging technologies and services. Imagine your marketing team wants to test an integrated campaign with a voice assistant for smart devices. While voice-activated marketing is still limited and won’t bring you scale, for now, it is seen as a prominent marketing channel for the future. 

By knowing your customers’ profiles, you can spot promising channels and formats and test them out with a small cohort of consumers. While combining insights to A/B tests, you might also come up with new business solutions and even ideas for revenue streams.

19) Feeding content strategy

In the age of Netflix and Spotify, customers expect personalized content that matches their particular moment in the customer journey. In that scenario, marketers have the challenge of being relevant and timely in their advertising efforts.

CDPs can help brands discover the formats of content and notifications that are more appealing to each customer, as well as when they tend to be more receptive to brands’ communication. 

20) Getting insights for products and services

If you once needed full customer research in order to understand customers’ unique needs, CDPs can give you hints about their preferences and needs. Because CDP gathers loads of qualitative information, it can also guide your product strategy.

By checking users’ feedback regularly, you can prioritize your product and service offerings to more closely match with customers’ needs. Or, you can identify trends and come up with completely new products.

Interested in a CDP for your company?

That is a lot of information about customer data platforms, right? It’s a lot to take in, so take a deep breath. Now, If you plan to purchase a CDP for your company, the next step is to check out the platforms available in the market and consider which one is the best fit for your business goals.

You might want to check out the specifics of Arena’s CDP, one of the most robust tools in the market. Register to this link to talk to one of our consultants and find out how our CDP can help your business.