Marketers today have no choice but to become data-driven in order to keep up in a crowded and noisy landscape. Many of them have become down-right data dependent to be able to achieve their baseline KPIs. Here’s where an understanding of data platforms becomes an absolute must.
Achieving the right place, right time, and right message requires the right data.
To achieve marketing magic (right place, right time, right message), teams require vast amounts of data to inform their next moves. Gathering data is done with the intent of answering the big questions:
- Which users should I include in my outreach?
- Which consumers in my audience should I consider ‘high-value’ and worthy of higher bidding tactics?
- Which products from my suite are the best fit for which consumers?
- What marketing channel will work best for each audience?
- How will I know who is going to be in-market soon, who is in-market now, and who has already concluded their entire buying journey?
- How should I cross-sell to my existing customers?
There is no lack of data available to marketers
Many marketers have already begun collecting, analyzing, and acting on data about their target audience to fuel smarter communication. The data landscape is vast, but all consumer data can really be boiled down to the categories below:
Zero party data
This is data that your customers are sharing directly with your company deliberately to customize their experiences with you. For example, a consumer may share how frequently they would like email updates or language preferences. There is typically a value exchange in order to collect this data.
Unfortunately, most consumers just don’t see the value in sharing hundreds or even thousands of data points that could be useful in crafting a high-performing marketing campaign, so few companies could craft a strategy around this dataset alone.
First-party data
This is also data collected by your company, but it is not shared so deliberately by the consumer. As an example, when your customers visit your website and browse your products, you collect information directly about their visit. But they didn’t give you that data deliberately, they were just shopping.
First-party data includes data collected by the advertising brand directly, whether via on-site engagements, email and outreach data, or in-store engagements. Although this data is incredibly rich, it is only on your current customers. It doesn’t help directly with prospecting efforts. Some customer profiles may also be thin, with less data to take action from.
Second-party data
This is essentially someone else’s first-party data. A major use case we all see today is when credit card providers partner up with travel loyalty programs. They share data back and forth to improve marketing, and there is a larger partnership at play.
The downside of 2nd party data is that there are few extremely compatible brands for most companies to partner with, and even fewer that agree to sharing data. The 2nd party data you would find most valuable is most likely from your top competitors. And 2nd party data is usually a two-way street. “You show me yours, and I’ll show you mine.” Most marketers are not too keen to share that valuable data with their top competitors – for obvious reasons.
Third-party data
Third-party data is secured by companies for the sole purpose of empowering their clients. There are over 300k data providers in the United States alone collecting and creating data variables covering a wide variety of topics. Most include the “Magic” variables – marital status, age, gender, income, and presence of children.
However, with so many providers in the space, there is a wide variety of niche elements, including everything from ‘preference for birdwatching’ to ‘likelihood to give candles as gifts.’
The good news is that there are 300k+ vendors out there, so the data you need to fill your data gaps is likely available. The bad news is that there are 300k+ vendors in the space, so you may have great grand-children before you can finish evaluating them all. That is what holds many marketers back from utilizing third-party data more. They have trouble sorting through unhelpful or poor-quality data so as to find the good consumer data.
Data Deluge: Too much data to manage
With so many big questions and possible data types and sources, technology has naturally emerged to help us organize and take action from the data.
While some users feel competent enough to manage their data using basic tools like Excel, it has never been robust enough to address the same use cases as a true Marketing Data Platform. And even if a user has figured out the path to making it operate as needed, there are data privacy concerns with maintaining consumer data in such a format.
Here are a few types of true marketing data platforms that have emerged over the years:
Data list or data-select tools
Data list tools have been around for decades and are still commonly used today in direct marketing.
They are an easy self-serve avenue to grab lists of prospects, typically for the purpose of sending direct mail. Users can login, search the provider’s taxonomy for the data they need, make their purchase, and walk away with a file of names and addresses.
The downside of data list tools – or data-select tools – is that they ignore first-party data and can only provide third-party data from that specific provider.
Many low-cost providers make them extremely accessible to small business marketers and owners, and the old adage “you get what you pay for” is typically true. Data quality issues are common. The use cases are also extremely limited. No insights were derived from the brand’s existing customer base, and no post-campaign analysis either.
CRM (Customer Relationship Management)
CRMs are such a popular tool nowadays – companies with sales teams use them heavily. In their CRM, a brand can maintain a single record of truth about client engagements – and the platform serves as a hub for “owned” marketing channels.
Unfortunately, CRMs became monolithic platforms and created a number of data silos. Sales teams are still heavily dependent on their usage. However, marketers find them too over-engineered to pull insights from or create audiences for marketing campaigns. It also only includes current customers or prospects – and lacks the prospect data most growth-focused teams require.
DMP (Data Management Platform)
Although the naming of this platform may leave readers thinking that DMPs are the one-stop-shop for all data management needs, it couldn’t be further from the truth. In fact, data management platforms are typically used very specifically by digital marketing teams. The data in DMPs is anonymized to digital identifiers (typically cookies) and is connected to several digital media platforms. That has led many in the industry to joke that DMP really stands for “Digital Management Platform.”
While digital media teams may still find DMPs helpful in executing their work, DMPs are not very helpful to others across the organization or marketers responsible for a wider variety of channels. It can also be very cumbersome to get data in or out of a DMP – and typically requires a third party to provide onboarding support.
ESPs (Email Service Provider) or other engagement platforms
Email marketing teams know all too well the importance of their ESP. And while most wouldn’t consider an ESP a marketing data platform, no one can deny a great deal of customer data is traveling through this system. Marketing teams are using these platforms to send emails, track opens, clicks, and purchases, and set up triggers to bring customers back in (for example, an abandoned cart).
However, ESPs, and similar engagement platforms, focus on the tactical rather than the strategic. Their focus is solely on making the most of existing relationships, rather than identifying new ones.
CDP (Customer Data Platform)
CDPs are the newest wave of modern data platforms that have achieved widespread adoption. They are the first tool that answers the needs of a wide variety of departments within an organization.
CDP’s customer data is stored in a single place. This allows a record of truth for customers that want to opt out or adjust their preferences. Moreover, it also serves call centers that need to access first-party data to improve a customer’s experience, and marketers who wish to create specific triggered campaigns off of specific actions and more.
For many Fortune 100 companies, CDPs are already integrated into their suite. Leaders of Fortune 500 brands are also evaluating different providers and locking down their selection. CDPs are robust and powerful tools but can be extremely pricey if you only need a handful of their available features. That may make a CDP investment unlikely for Fortune 1000 brands with only 5-10 people on their marketing team. CDPs focus heavily on zero and first-party data, but this completely ignores prospecting efforts.
CIP (Customer Intelligence Platform)
CIPs or Customer Intelligence Platforms take in multiple types of data for careful analysis. For example, CDPs focus on 1P data and DMPs focus on 3P data, whereas CIPs bring everything together in one place. Based on the tool, CIPs could require data science expertise for analysis or be intuitive enough for the intern to access.
Another aspect that separates CIPs is the ability to take the operational data out of the platform in the form of models or segmentation. The goal? To power outreach or personalization in media-focused platforms.
A right-sized Marketing Data Platform
For smaller, growth-focused organizations, priorities include 1) maximizing the value of their existing customer data and 2) identifying new high-value prospects. In the age of ChatGPT and Amazon Prime Same Day, they are also expected to deliver results in essentially no time at all and without adding headcount.
Our team evaluated the data sources relied on by our growth-focused clients, as well as the platforms available to inform a ‘Goldilocks approach’ to data platforms. This solution can maximize the value of first and third-party data but doesn’t force users to execute media via the platform. Its features are simple enough to facilitate an intuitive user experience but complex enough behind the curtain to deliver next-generation data science capabilities (even if the intern is logging in).
Nailing the Fundamentals
Know your customers
Zero-party and first-party data are fantastic, but scale is one of their main limitations. Not only in terms of the volume of consumers included but also the available depth of data.
For example, if you knew that 20% of your customer base had children living at home, how could you engage with them more intelligently about your suite of products? Asking for this type of data is not a natural part of a customer journey, so appended third-party data is needed. This appended data will only show positive results if it is accurate and scalable (spoiler alert – our data is awesome).
Find more high value prospects
Profile reports can help readers identify attributes that rank high for their customer base. As an example, you may order a profile report and learn that your best customers skew females, high income, are homeowners, and have children at home. While that is helpful information, especially when designing creative variations, it’s hardly enough information to build a high-performing audience around.
Think about it – if you targeted all high-income female homeowners with children your audience would be huge. This target would include some high-value prospects, but also a large volume of users that differ from your high-value customers in several ways.
To really compete in today’s landscape, predictive analytics is required. A high-performing model will fully analyze thousands of data points and inform you on your current customers. Our data science team has crafted thousands of predictive models like this for a wide variety of clients and industries in our history. We applied this knowledge to our automated predictive analytics solution and boom! Users can have a high-powered model in moments with a few clicks.
Growth-minded teams need a growth-minded data platform
We were very intentional about creating a data platform that would be accessible to the growth-minded organizations that we have been lucky enough to serve for years. We have essentially taken the simplicity of a data-select tool (only with world-class data), brought in the power of first-party data, and layered on sophisticated data science. The result is a right-sized solution for growing marketing organizations that need to do more with less.
If you are ready to get your hands on the wheel of a right-sized data platform, reach out! We love giving demos. Let’s face it — when you have a super cool gadget, it’s fun to show it off.
