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A CMO's Guide to CDPs: The New Challenges of Marketing

Increasing data, omnichannel engagement, customer-directed experiences and the end of cookies are some of the biggest challenges marketers face today.

The rise of digital commerce, high customer expectations and organizational silos are some of the drivers of adoption of customer data platforms (CDPs). In the latest installment of our blog series based on our e-book, Transforming Customer Data into Insights: A Chief Marketing Officer’s Guide to CDPs, we dive deeper into the challenges marketers are facing with creating data-driven personalized experiences.

Sending one-time campaigns to large segments of customers via email or other static channels was a breakthrough in the 1990s. But marketers in the 2020s are encountering whole new sets of challenges and opportunities to deliver a customer-centric approach, and older marketing technologies just aren’t up to the task. These forces include: 

Increasing Volume, Variety and Velocity of Data

While the term “Big Data” to describe the explosion in data reached its apogee in the mid-2010s, there’s no question that something dramatic happened in the generation and collection of data in the last 20 years. Customer data available to marketers was no exception. 

The World Economic Forum estimates that by 2025, 463 exabytes of data will be created each day globally. From email to web searches to social media posts, much of this content is created by individual consumers. 

To accompany this surge in volume of data is an increase in variety, not just in media, but in devices. At the turn of the 20th century, just over one in two U.S. households had one desktop computer. By 2014, more than 90% of U.S. households had at least three connected devices, and not just desktop computers — from laptops to mobile phones to tablets, consumers are consuming and generating more data from more sources. 

Finally, today’s consumer-generated data moves faster than ever. Consider the always-on nature of social media versus engaging with a brand via telephone or mail. As data moves faster, it often also loses value or relevance faster. This is especially the case for connected devices such as the Internet of Things (IoT), which generate data in real time that is meant to be acted on just as quickly. 

Omnichannel Engagement and Attribution

An omnichannel strategy is designed to offer customers a unified experience across all channels. For example, in an omni‐ channel approach a customer is able to shop for products online, then pick them up at the store. The below figure shows the difference between multichannel and omnichannel marketing. 

Earlier marketing technologies aren’t designed to accommodate for this growth in number and variety of devices and channels. Database marketing primarily focused on offering customers a fixed offer via email (for example, informing of a promotion valid either online or in stores, often not both).

An omnichannel approach also facilitates marketing attribution. Consumers today go through a near-infinite variety of channels and touchpoints before making a purchase. Without an omnichannel approach, it’s nearly impossible to integrate and track how these various touchpoints lead to a conversion.

Customer-Directed Experiences 

More broadly, the explosion in devices, data and channels signals a new way in which consumers interact with brands. With new technology and sources of information, consumers choose when to engage with brands and why. A fixed customer journey doesn’t conform to the new role of brands as a source of on-demand data and information to its customers.

Personalized Data and the End of Cookies 

Of course, to provide individualized experiences, organizations must draw from individualized data. A dominant tool organizations have used historically to gather customer-level data for the last two decades has been the browser cookie. This technology has met its limitations in offering a truly customer-centric experience for a few reasons. First, cookies aren’t purely personalized but rather pseudonymous data sources. They also have limited value past the acquisition phase of the customer journey, as they are primarily used to serve targeted advertisements to segments of users. Moreover, consumers have reached a tipping point with this marketing strategy and changes to browsers and the web itself signal a move away from the cookie’s dominance.

With the eventual demise of cookies and their ultimate failure to provide a holistic customer experience, marketers are examining how best to gather, analyze and act on personalized data. Because it’s gathered at the individual level, this type of data inherently includes personally identifiable information (PII): information that can be linked to a specific individual. PII presents a number of logistical and ethical challenges for organizations, including the need to keep this information safe and transparent.


Addressing these challenges is top priority for today’s modern, customer-centric marketer. In the next installment of the “A CMO’s Guide to CDPs” series, we’ll go over the essential elements marketers should look for in a CDP to solve these challenges. Stay tuned for part three or get the full e-book, A Chief Marketing Officer’s Guide to CDPs, now.

 

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