Marketers Need Outcomes, Not More Tools

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 Ric Elert, president at Conversant

A problem that haunts the industry is too much of an emphasis is still being placed on technology and not enough focus is placed on driving outcomes that address client challenges.

Customer data platforms (CDPs) are the latest example of this tendency. The category seemed new and fresh, offering CMOs a level of identity resolution and people-based marketing they had yet to achieve. For that reason, CDPs quickly established themselves as this year’s top must-have technology, despite anyone being able to agree on a single definition, let alone common features.

The truth is, however, that CDPs are just another tool to collect data and they fail to deliver true people-based marketing for a few reasons.

For starters, CDPs lack third-party data, which is key to identity resolution. You’re missing out on important pieces of information if you only know an individual based on their activity with your brand. First- and third-party data are a must for accurate identity. For example, if a mother buys items from a beauty site she and her daughter both visit, it’s important to be able to distinguish the mother’s path to purchase from the daughter’s. The insights from live third-party data can provide the additional information needed to do so.

Second, while CDPs give marketers the ability to collect and organize their first-party data, they don’t provide person-level execution or measurement. Without these core capabilities, CDPs are nothing more than another place to store your data. This means marketers must worry about data leakage as they pass data from their CDP to a media partner. And the lack of measurement in a CDP hinders the ability for customer profiles to grow over time as more insights are ingested into the platform. The absence of one or both can impact a brand’s long-term performance.

We’ve been down this road before with other platforms.  We have to move beyond using tools that only collect data and focus on all three elements – data, execution and measurement – if we’re going to deliver people-based solutions that have a true impact.

Here’s one way to think about it. I recently spoke to students at the University of Wisconsin. If I told you I was going to learn everything I could about each student before the presentation and ensure the content was relevant to each of them but then delivered one message to them as a broad segment, you’d likely say my pre-event research was a waste of time. That’s a CDP in a nutshell.

“Unfortunately for CDPs, they’ve identified a legitimate problem but don’t have the right technology or services to solve it,” Forrester analysts Joe Stanhope and Stephanie Liu wrote in a recent report. “Tellingly, much of the CDP hype seems to come from vendors.”

People-based marketing and identity resolution require us to refine the technology we currently have in place, not create new tools that do the same thing with slightly different window dressing. Identity resolution takes time and is never quite done. It’s a perpetual process that demands us to strive for consistent improvement, even if it’s just a little bit, every day. That constant optimization adds up.

In CDPs, companies aren’t selling clients an outcome; they’re selling the dream of an outcome. And unfortunately, executives are paying a ton of money for a technology that will have marginal impact. It won’t be until two to three years down the line that they’re going to realize it, at which point, I would expect the latest tool to be hitting the market.

Follow Conversant (@conversant) and AdExchanger (@adexchanger) on Twitter.

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1 Comment

  1. Just spoke about this yesterday at the Forrester Data Strategy & Insights conference.

    CDP identity and data unification serve a purpose, but don’t confuse that with the ability to provide actual customer insights that might drive a more intelligent strategy. Same mistake made with the DMPs, that have them now in the Trough of Disillusionment.