Why Advertisers Need a Consumer Data Platform in 2024

Why Advertisers Need a Consumer Data Platform in 2024

In this week’s article, Jerome Velasquez, Product & Solutions Director, will take you through the value of consumer data platforms, and why it is worthwhile researching and investing in this type of platform in 2024.

What is a Consumer Data Platform

The role of a Consumer Data Platforms or a CDP is to aggregate all of your consumer data within one place. The value is derived from a single data source’s ability to improve internal consumer experience and external communication particularly for marketing. 

A CDP differs from what has been traditionally used in marketing which are data management platforms or DMPs. In general, while a CDP’s focus is on aggregating 1st party data for both internal and external marketing use cases, DMPs primarily aggregates data from various 3rd party sources such as data providers and ad networks, to deliver bespoke audiences for campaign targeting. In a CDP, these target audiences are derived from owned data but can also be enriched by privacy compliant data partnerships.

In leading markets globally, their adoption has largely been driven by growth post pandemic as consumer experience showed growing importance. This has only further continued across 2022 onwards following commitments in 2022 and announcements by Google in mid 2023 which all but ensures the demise of third party cookies by the end of this year. Cookie deprecation poses significant challenges to marketing personalisation, performance measurement and campaign management. 

Australia mirrors the global growth as the industry sees the market as a significant growth engine, with at least 20 active vendors and 15 with CDP implementations in ANZ from traditional CDP platforms to reshaped tag management systems or CRMs across a substantial 500 sites.

How does a CDP benefit a brand

A Consumer Data Platform (CDP) can provide several benefits to a brand by helping it better understand and engage with its customers:

• 360-Degree Customer View – As it aggregates 1st party data sources, a CDP can create a single, complete customer view. This could include previous experiences with the brand, online and offline transactions, website, social and offline interactions, etc. that are all linked to individual customer profiles.
• Improved insights – With a centralised repository of customer data, brands can gain valuable insights into customer behaviour, preferences, and trends
• Enhanced Communication – When done right, all the information we know about our customer can be used to both improve their experience with the brand e.g. better email outreach or better onsite experience, as well as refine our marketing efforts e.g. tailored messaging, identifying high value customers, closed loop reporting, etc.
• Cross-Channel Consistency – given its a single data source, CDPs enable consistent messaging and customer experiences across various channels, whether it’s a website, mobile app, email, social media, or in-store interactions. This helps in building a cohesive brand image and maintaining a unified communication strategy.
• Data Compliance – By having ownership, understanding data providence, and by being able to directly manage security, storage and use of data, CDPs offer significant control to advertisers to maintain data compliance that is especially important in the evolving privacy conscious ecosystem. 

Challenges to investing in a CDP

While the benefits of a CDP platform are vast and compelling, there are realistic challenges that must be overcome when considering implementing a CDP.

• Implementation Complexity – Integrating a CDP with existing systems and data sources can be complex, especially for organisations with diverse and legacy systems. Compatibility issues may arise, leading to delays in implementation and increased costs.

• Resources & Skills Requirements – a comprehensive self assessment is recommended in understanding the capacity of the business in investing in a data platform requiring technical capabilities through integrations for inputs and outputs as well as the capacity to deliver on the benefits such as audience segmentation and maintenance. 
• Determining ROI – While a CDP can provide significant benefits, the initial costs of implementation, integration, and ongoing maintenance must be carefully considered and assessed against tangible opportunity improvements

How ADMATIC can help

The implementation of a CDP can be a long and arduous journey. However, it is clear that in this rapidly changing landscape that places significant value on data ownership, privacy and compliance, a CDP presents significant opportunities across any brand with ongoing data concerns. The role of ADMATIC is to act as an extension of your marketing team, providing support and facilitating the activation of the selected customer data platform.

ADMATIC will ensure that benchmarks and success measures are monitored, measured and tests are executed properly across media channels. This allows you, the advertiser to quantify the value driven from improved velocity towards key audiences, minimised wastage in coverage, etc.

ADMATIC can also provide valuable insights and direct support in audience segmentation and profiling, particularly in the identification of the highest value customers. 

In summary, although there may be substantial investments required in the long term, and consideration when implementing and managing a consumer data platform, ADMATIC can provide you with support in enabling the various use cases that can contribute to the platform’s ability to provide an investment return. Agency support can also expedite the development of internal skillsets in segmentation, profiling and operating a CDP. In the long run CDPs present a significant opportunity for navigating the cookie demise as well as building consumer relationships in this new tech ecosystem going forward.

Get in touch today to understand how we can help you in your CDP journey