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Data is the fuel of digital marketing: without it, your advertising engine won't run. As privacy regulations and consumer expectations evolve, some data signals are fading away. This means advertisers need to use their first-party data more efficiently to target audiences effectively. Three technologies that help transform raw data into actionable campaign fuel are data management platforms (DMPs), customer data platforms (CDPs), and data clean rooms (DCRs).
Whether you're new to an agency or a veteran marketer, you may want a refresher on how these data technologies work, the differences between CDPs and DMPs, use cases, and more. Read on for the lowdown on what you need to know about DMPs, CDPs, and data clean rooms.
DMP stands for data management platform. A DMP is the central command center for your customer data. Think of them like a headquarters where all the data on your target audience is collected from your various sources and ultimately organized into audience segments so that you, the marketer, can make better decisions on your campaigns.
To effectively market their products or services, brands rely on data about their customers and target audience. The DMP organizes and presents this data in digestible ways so that marketers can properly segment audiences for advertising that's tailored to the interests or behaviors of each segment.
We can break down how DMPs work into three steps: data collection, data normalization and enrichment, and segmentation.
A data management platform's first job is to collect data from all the various sources your brand uses ' everything from your own first-party data to second and third party data (which is becoming rarer and more difficult to acquire with recent developments in privacy). To bring all this data together, DMPs typically integrate with other adtech and martech platforms, such as a demand-side platform (DSP), an ad exchange, and a supply-side platform (SSP). DMPs may also connect to a customer relationship management (CRM) system like Hubspot or Salesforce.
What good are tons of data sets if you're comparing apples against oranges, bananas, papayas, and kiwis? After data collection, a DMP normalizes the data so we can analyze apples with other apples. Then the DMP enriches this data with additional signals such as device type, device location, browser version, and operating system.
After data enrichment, it's ready for segmentation. This is where the DMP groups together data with similar attributes into categories (also called data taxonomies). These classifications make it easier for a marketer to build unique user profiles and create audience segments ' groups of individuals with similarities. For example, a DMP can help build an audience segment of women aged 18-34 who have streamed Taylor Swift in the last 12 months.
Customer data platforms, or CDPs, are quite similar to DMPs in that they also collect customer data and present it for easier decision-making. But unlike DMPs that focus on audience segmentation, CDPs focus on individual customers.
The entire point of the CDP is the unified customer profile, which paints a clearer picture of who your customer really is based on their purchase history, their in-app behavior or website behavior, their preferences, and much more. If you can understand what they like, how they make decisions, and what triggers them to make a purchase, you have the power to influence their actions.
DMPs are typically used to build profiles for anonymous (often, target) users. The most useful outcome from a DMP are audience segments that you can use to market to groups with similar tastes and characteristics.
If you want to learn more, please visit our website clean room specifications.
CDPs are typically used with customers you already have. The most useful outcome here is a complete customer profile that allows you to tailor campaigns to an individual's behaviors or demographics.
Data clean rooms are tightly controlled environments where multiple organizations (typically an advertiser and a publisher) can safely pool together their customer data, allowing both parties to analyze the combined datasets for insights they couldn't get otherwise.
This relatively new idea in marketing analytics only works because user privacy is prioritized. In place of personally identifiable information (PII), advanced techniques are used to anonymize the data across datasets. In short, one participant can never see the raw data from another participant.
Note that data clean rooms will never replace a DMP or a CDP. Instead, they complement the work that your DMPs do to build your audience segments, and the work that your CDP does to create unified customer profiles. By enabling you to securely collaborate on combined datasets, data clean rooms allow you to arrive at better insights.
When it comes to DMPs vs. CDPs vs. data clean rooms, these aren't rival technologies. They're complementary tools that allow the modern marketers to better understand their target audiences. The best choice for you depends on your needs:
As cookies and identifiers fade away, advertising strategies and ways of using data are evolving. Here at Verve, we're helping lead the charge with privacy-first advertising solutions that deliver better outcomes with responsible media. To learn more, don't hesitate to reach out to our team.
A guest post from Sergio Giannone, Senior Content Manager at Decentriq
A few months ago, Zeotap and Decentriq, a Swiss enterprise SaaS platform providing the most secure and compliant data clean rooms, announced a partnership. Today, it's time to look a bit deeper into what exactly this partnership can enable and why it's an important use case for the future of marketing and advertising.
The collaboration between Decentriq and Zeotap allows companies to maximise their marketing efforts by leveraging the previously-unexplored potential of combining the customer data from a CDP (Customer Data Platform) like Zeotap into a DCR (Data Clean Room) for collaboration opportunities on first-party data.
Connecting a CDP and a DCR ' therefore having a DCR as an extension of a CDP ' is becoming more and more relevant as we move towards a cookieless world, one in which being able to collaborate on anonymised first-party data (while being complaint with privacy laws and regulations) will be crucial for organisations wanting to continue running effective marketing campaigns.
Before we get into the details, let's take a step back and quickly recap on what a CDP and a DCR actually are.
Let's start by saying what a CDP is not. A CDP is not a CRM, which only stores customer data such as transactions and interactions, without including any insight into the user behaviour.
Differently from a CRM, a CDP is a software that provides a persistent, unified customer database. In this database, the end-user (normally within the marketing department) has access to a comprehensive view of each customer thanks to data coming in from multiple external sources and systems. The CDP is able to link customer data from different sources to the same customer. This enables the possibility to track customer behaviour over time. The coolest part? This data can then be accessed by other systems as well ' including data clean rooms ' for further analysis.
A DCR is like a 'magic box' that serves as a common ground where data coming from different companies (for example, a publisher and a brand) can meet and merge in order to be jointly analysed.
What's the advantage of using a Data Clean Room? Simply put, it's simple and secure, and the data is fully encrypted and anonymised. In Decentriq's case, this means that not even the other party ' or Decentriq and the cloud provider ' will ever be able to see any PII (Personally Identifiable Information ' such as names and addresses) contained in your set of data. In addition, Decentriq's data clean rooms guarantee full data control by permitting only pre-approved analytics to run, and provide additional privacy filters on the output to ensure that no sensitive customer data is contained in the result.
Because of their different ' but complementary ' functionalities, the two technologies literally go hand in hand. While the CDP harmonises your first-party data, the DCR effectively acts as the natural next step in the data cycle by allowing you to action on it.
Combining a Customer Data Platform such as Zeotap with a Data Clean Room solution such as Decentriq is a choice that can contribute to higher levels of efficiency, allowing you to use the full potential of both. In fact, in order to be used efficiently in a DCR, first-party data needs to be harmonised, and there are no better tools to do this than a CDP.
By assigning an identifier to each customer ' which allows the platform to follow it across all channels ' the CDP effectively unifies your first-party data, therefore rendering it usable in a Data Clean Room. On the other hand, the DCR generates value from the first-party data, which is increasingly important in a world moving towards the absence of third-party cookies. What's equally important is that all of this is done in a GDPR-compliant way.
Let's have a look at how this translates into practice:
The combined use of a CDP and a DCR enables brands and media owners to securely collaborate on first-party data during the whole media cycle (planning, activation, and measurement), but let's use the activation phase as an example.
Let's assume that a brand wants to run an advertising campaign in which it wants to activate custom audiences based on first-party data. Both the brand and the media owner would need to share their first-party data with each other. Doing so while guaranteeing user privacy could be quite challenging, right?
This is where the powerful combination of CDP and DCR can really show its potential. Choosing to adopt a CDP allows both the brand and the media owner to collaborate on a rich, harmonised set of first-party data. This data is ready-to-use in a DCR, where it will be encrypted and uploaded, and then matched against PII (e.g. name, ) to create lookalike audiences from the aggregated intersections. The lookalike audience insights are then returned to the media owner. From there, activation can take place directly from the DCR.
As we've seen, a CDP is a crucial part of a first-party data strategy. It's where all your customer's data comes together, no matter the source, and gets unified into a single view. This is an important prerequisite to be able to efficiently leverage your first-party data in order to collaborate with external parties via a data clean room.
The partnership between Zeotap and Decentriq was built upon the goal of enabling organisations achieve just that. If you want to learn more about how Zeotap and Decentriq can help you with your first-party data strategy, get in touch with us or with Decentriq through their website.
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