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Ideas Data Strategy

CDPs and the changing power dynamics of data IDs

Derwin Brennan

New kids on the block

As sources of data have proliferated, so have the companies seeking to organize and operationalize that data for marketers. Data management platforms (DMPs) were offered as the key to the collection, organization, and deployment of marketing data, but data privacy regulations have made their reliance on third-party data untenable. With the deprecation of cookies, marketers are re-examining the best ways to find and engage with current and prospective customers - using both first-party and third-party data. This introduces new power dynamics into the equation with customer relationship management (CRM) providers like Oracle and Salesforce launching new customer data platforms (CDPs) as a substitute for DMPs.

A CDP uses persistent customer IDs rather than cookies as their foundation, and can be appended with other first party data including from point-of-sale or email marketing sources. Their rising popularity has led to confusion about what is and isn’t a true CDP, and it can be tough for marketers to assess bold claims.

CDPs have passed peak hype cycle

Mission impossible

Specialist CDP Tealium says their platform will “collect, enrich, and activate customer data in every channel,” touting integrations with DSPs as well as Facebook and Twitter.

What they can’t do is create the so-called customer single-source-of-truth (SSOT). Neither can DMPs or any other platform for that matter. While the CDP can send customer lists out into those DSPs for media activation, look-alike modeling, etc, they cannot extract data records to match reach and frequency across major digital platforms.

Facebook, Amazon and Google all maintain data clean rooms to enable this within their own ecosystems. These allow for analysis of campaigns run on their platform in an anonymized environment which protects the data privacy and identifiability of their billions of users. Obviously marketers aren’t able to take records from one clean room and export them to another, or any third party CDP.

In his Dreamforce keynote last month, Marc Benioff spoke about the SSOT provided by Customer 360, the Salesforce CRM product. The company’s CDP, launching in 2020, will be an extension of the 360 product, and points to one view of the future of martech, one based on 1st party data.

Even linked to a robust CRM, the Salesforce CDP won’t truly be able to create a single source of truth that integrates every customer service call, every purchase, and every ad impression across online properties, let alone offline.

One way or another

CDPs will likely continue to grow in reach and adoption as the use of cookies wanes. To the extent that they can provide marketers with information beyond that available in many CRMs (often limited to generic info like use of broadband or device type), or make it easier to overlay data simply (as with audience segments), CDPs will offer real value. However, if regulation or other policy challenges impede the ability of CDPs to match customers using email or phone number identifiers, they are likely to suffer the same fate as DMPs and cookie-based advertising. It remains to be seen which strategy for organizing and activating marketing data will win out - whether email marketing services eat up DMPs (e.g. Salesforce eats Krux) or whether DMPs absorb emails and other identifiers as part of the D in DMP, and look more like existing CDPs (Krux shapes the future of Salesforce for advertising).

This article was co-authored by Kate Scott-Dawkins