Why All the Hype Around Customer Data Platforms?
As someone who follows publishing-industry technology, you’ve no doubt heard the term “customer data platform” (or “CDP”) mentioned over the past year. In short, the technology pulls together audience data from a publisher’s communication tools to form profiles, and then helps a publisher both analyze the audience data (internally, for advertisers, etc.) and feed it back into those communication tools (website, email, ads, etc.) for personalizing the subscriber’s experience.
Research analyst David Raab forecasts the CDP market will reach $1 billion by 2019. And research firms Gartner and Forrester have published more views on CDPs in the past 12 months than any previous period.
Yet, why the sudden uptick in CDP usage in the publishing industry? Why have publishers such as Access Intelligence, The Economist Group, SourceMedia, Praetorian, Agora Financial, and Haymarket all deployed CDPs in the past few years?
In talking with publishers who have deployed CDPs, three main trends have surfaced that help drive the desire for the technology.
Publishers Are Serving More Results- And Data-Driven Advertisers
As James Capo — a pioneering user of a CDP when he was a VP at Access Intelligence — explains, the advertising business for publishers is moving to a “business success” model.
Today, more technology tools exist that company leaders use to hold their advertising colleagues accountable for business results. In turn, advertisers will hold their publisher partners accountable for their role in achieving these business results.
10 years ago, “results” may have meant 200 “contacts” who have downloaded a company’s white paper from an e-mail blast. Now, “results” could mean 20 “qualified” leads whom the publisher can demonstrate are highly engaged with content related to the brand across the publisher’s channels: email, articles, custom content, webinars, and more. This means many advertisers are more open to quality over quantity, if quality gets them to greater returns on their investments.
How does a CDP come into play? Because CDPs can serve as a central hub for a publisher’s communication tools, some CDPs allow you to look up a visitor — or, in the case of “account-based marketing,” several visitors from one company — and show how the person engages with content related to an advertiser across a publisher’s email newsletters, website, in-person events, and so forth.
For example, while Capo was at Access Intelligence, his professional-service division increased business by 54% in one year with the help of a CDP. “The CDP ultimately acted as an umbrella over all our media platforms, allowing us to conduct and implement highly specialized marketing programs.”
Some CDPs take it one step further by using “machine learning” — a type of artificial intelligence in which computers can learn from data without human programming — to analyze how a subscriber’s affinity for an advertiser changes over time. For example, a semiconductor manufacturer might want to target only four subscribers who have a high affinity for content about electronic design automation (EDA) tools — versus hundreds of subscribers who only have a low affinity for the topic. I’m not talking rudimentary scoring of an individual’s affinity — for example, has this subscriber looked at two articles about EDA? — but instead very complex analysis of the subscriber’s ever-changing behavior across many communication channels.
More and more, publishers are creating internal marketing agencies that identify a person and their preferences, and nurture them to the point of “highly engaged” with the help of CDPs.
Publishers Have Only So Much Advertising Inventory
Marketers who have bought webinars and e-blast programs from publishers for years will tell you they’re accustomed to waiting in line. Only so much advertising inventory exists. There’s a solution, according to AnnMarie Wills, formerly of publisher SourceMedia and now of the consulting firm Leverage Lab. “Some CDPs offer publishers the opportunity to go beyond selling webinars, e-blasts, and impressions to also reaching subscribers in third-party networks such as Facebook Ads,” says Wills.
How does that work? Some CDPs have integrations with outside networks such as Facebook and Google. That means if a publisher’s own online-advertising inventory is booked, yet they really want to satisfy an eager advertiser, the publisher could offer the opportunity to reach subscribers in ads as they browse social networks. This method is also known as “audience extension.”
Some CDPs allow a publisher to take it a step further with even more targeted subscriber engagement. For example, an advertiser could work with a publisher to target on Facebook only subscribers who have unsubscribed from email communications yet have a high affinity for content across other communication channels, like the publisher’s site.
It’s no longer about competing with these emerging third-party networks. It’s about engaging with a publisher’s audiences wherever they go with the help of technologies such as CDPs.
Publishers Always Want More Engaged Subscribers
The first two trends relate to how publishers seek to better serve advertisers with engagement of their subscribers. But what about the fundamental need to acquire more engaged subscribers for advertisers to reach?
Today, publishers see many people anonymously browsing their websites without ever registering or buying a subscription. What if, based on anonymous visitor’s highly engaged behavior, a publisher could show promotions encouraging a person to purchase a subscription? Perhaps this is a “modal,” or notification, on a publisher’s site that advertises one promotion for a new subscriber and another for a former subscriber whose subscription has lapsed. And, for existing subscribers browsing a publisher’s site anonymously, predictive “identity resolution” technology from a CDP could suppress the offers. After all, sometimes good marketing is no marketing at all.
Remember how some CDPs have machine learning? Agora Financial’s sales department used a CDP’s machine learning capabilities to comb through a list of subscription prospects to determine which were most likely to respond favorably to a pitch. The result? A 30% conversion rate by focusing efficiently on the hottest leads.
You can visit Economist.com, which uses a CDP integrated with web personalization tools, to see how it’s possible to engage with visitors in different ways depending on their subscriber status and affinity for certain types of content.
Addressing more results- and data-driven advertisers, audience extension, and gaining more engaged subscribers are just three ways publishers are using CDPs. In the coming years, we expect to see many more innovative use cases as publishers take advantage of customer data they own.
Jeff Hardison is VP of marketing at Lytics (www.getlytics.com), a customer data platform used by publishers such as Economist Group, Source Media and Access Intelligence. Before Lytics, Jeff was director of marketing at Hewlett Packard Enterprise's marketing-technology division. Prior to his marketing career, Hardison worked in publishing.