“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Kelly O’Hara, senior director of technology strategy at Merkle.
As brands continue to explore what customer data platforms (CDPs) are and how best to use them, the introduction of reverse ETL tools and deconstructed CDPs have only further muddied the water.
Reverse ETLs copy data from a central data warehouse into SaaS tools that business teams use for growth, marketing, sales, and support. And with the emergence of this technology, marketers are left wondering whether CDPs are still relevant.
The truth is that harnessing customer data to use across the business is a complex challenge with numerous solutions. The “right” solution for any given organization depends on several factors, including data cleanliness, identity resolution maturity, organizational readiness, priority use cases and existing tool investments.
No matter which combination of solutions businesses choose for data, identity and audience management, there are several foundational concepts to consider to maximize investments and ensure long-term success:
1. Start with the foundation
Regardless of whether CDPs are obsolete today, the need for brands to own, expand and effectively use their first-party data remains.
The first question brands should ask themselves is not whether they need a CDP. It’s whether they are creating a value exchange that captures data to power the experiences their customers and prospects want. The second question is whether this data is securely and readily accessible to everyone in the organization who can create value from it.
Brands should prepare for the future by housing these consumer profiles in an owned environment that is not beholden to any particular software solution. They need a tool that can easily take their owned consumer profiles, build on those profiles with additional data and manage when and how the resulting profiles are used across channel-specific platforms.
2. There are still too many environments with too many owners
Brands need an owned source of truth, paired with their own data governance, that enables them to use data across, and outside of, the organization. This requires documenting or cataloging how consumer data will come together into a profile that updates as new data is collected.
To make this happen, siloed pieces of the organization must work together. Brands must understand who owns the consumer profile and ensure those owners have the business and technical perspectives to reach across divides through technologies like a CDP or reverse ETL.
These solutions are often launched within the confines of a single piece of the organization, rather than holistically across the enterprise. Marketing and CX leaders who act in silos miss opportunities to move the needle on the customer experience.
3. Where do partners make sense?
An ideal partner will help build the consumer profile in the brand’s environment using identity platforms, data warehousing technologies, CDPs, reverse ETL and others to unlock key use cases for data. The partner will also assist in building a governance model that ensures privacy-safe and efficient profile access to teams who need it, while building and training the brand to own, manage and continue to build on this profile for the future.
Tools to trust
As CDPs and alternatives like reverse ETL continue to evolve and new software enters the hype cycle, consider the long game. Explore a solution that will allow your organization to truly own its data as a foundation. Then, take advantage of vendor innovations on top of that foundation both now and in the future.
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