You know the music — it’s been a hit for the past three years — third-party cookies are going to be deprecated by Google (eventually). Along with them, DMP technology is ready to go extinct, with serious implications for acquisition marketing.
Some vendors might still be holding on to their DMP revenue, but Salesforce already made the move with an announcement in 2021.
If you haven’t already, it’s time to ditch your DMP. And I’ll give you a hint right away: no single technology can fully replace a DMP. Instead, the future of acquisition marketing lies in a combination of advanced solutions such as identity, customer data platforms (CDP) and data clean rooms (DCR).
“Rather than get stuck in a constant state of reaction, by establishing an evergreen strategy that prioritizes first-party data, you can mitigate the impact of future macro-factors and maintain brand awareness at a time when many others are quick to pull back on spend.”Grant Germano, Martech Strategy Lead at Bloomberg Media
Create an Acquisition Marketing Revenue Machine by Breaking Free From Your DMP
Tackle Technology Change Like a House Move
Before looking into the alternative technology solutions, let’s take a minute to remember that being successful is never just about the technology. Moving can be stressful and you want to choose the right company to support the transition every step of the way.
Change management, onboarding and operationalization of new solutions are important to ensure business success. The level of disruption will be proportional to the amount of change you are planning, especially when transitioning to technologies in a different category.
Moving from one ESP to another is one thing, but here we are talking about fundamentally different categories of technology — going from DMPs to something else. After all, we are talking about different technology categories for a reason.
Imagine you are moving from a farm to a condo — I’m open to submissions for a better comparison — you will find some similarities, for example both have a kitchen. But also gaps — your condo won’t have a stable! Be prepared not to have a perfect one for one replacement for capabilities and processes you are about to replace.
How Are DMPs Helping With Acquisition Marketing Today?
We’ve identified four categories of use cases:
- Prospecting: Targeting users who have not visited your website(s)/application(s)
- Site Personalization: Personalize user experience on your owned properties to increase conversion
- Retargeting: Target prospects who have visited your website and left without taking a desired action
- Paid Media Suppression: Remove audiences from paid media advertising to reduce waste spend and customer acquisition costs
These are not powered by DMPs only — site personalization use cases involve the use of a personalization tool such as Adobe Target or Movable Ink — but DMPs play a critical role in them.
Instead of listing all the capabilities of a DMP, let’s focus on some critical ones helping with the identified use cases in the current world:
|Data Marketplace||Provide access to third-party data.|
|Identity||Third-party cookies as the backbone of DMPs — even if other anonymous IDs such as MAID can be accessed — used to connect data and reach users across the advertising ecosystem.|
|Audiencing||Centralize the creation of anonymous audiences from online signals.|
|Look-alikes||Find profiles similar to existing customers — typically high-value customers.|
|Frequency Capping||Limit the number of times an audience is activated on specific channels.|
|Integration with paid media channels||Provide some integrations with paid media channels, often activating via data onboarder and/or DSP for programmatic media.|
All these needs have to find a new home.
Future-proof Your Acquisition Marketing Strategy
I mentioned that no single technology will replace a DMP. Then what will?
The world is rapidly evolving, with new privacy updates and regulations being rolled out regularly across the globe. Keeping up with these changes requires a flexible approach.
While it’s impossible to know exactly when and how things will change, organizations can prepare themselves for the future by continuing to benefit from existing data, while getting ready for new developments.
To build a successful and future-proof acquisition marketing strategy with a privacy-first approach, consider taking the following steps:
- Choose your addressable identities
- Drive your first-party data strategies with a CDP
- Build a partner ecosystem for data collaboration via DCRs
Choose Your Addressable Identities
While the match rate was always in question, third-party cookies have been ruling the world of advertising thanks to their scale and low cost to access. However, they are (almost) gone and I predict a dark future for other anonymous identifiers: IDFA is already challenging to access, IP addresses might take the same direction soon enough.
So how will advertisers be able to individually retarget anonymous users on paid media channels? You still need a common key to transact between an advertiser and a publisher.
Multiple vendors “raised” their hands to provide alternatives, which are often referred to as cookieless IDs. You will find two approaches:
- Probabilistic: Vendors leveraging accessible anonymous signals to identify users. It will often involve IP address, user agent and other browser information. Who knows how long some of these signals will remain accessible, and how efficient are these probabilistic user identification. Neustar with its Fabrick ID is an example of a probabilistic solution.
- Deterministic: Vendors who are focusing on pseudonymous IDs, meaning IDs generated from an authenticated PII information, such as an email address or phone number. It does require prior authentication by the user on the advertiser’s site in order to gain access to such ID. The Trade Desk’s solution here, with the UID2, gained momentum on the market.
I expect enterprise organizations to adopt not just one, but a set of new identity strategy solutions. Why? These IDs will need to be tested and will show different performances. Some will provide a good match with emails, others with phone numbers. Some will provide good coverage in North America, but won’t be able to help a business in EMEA. Organizations will also need to adjust their strategy based on the market adoption, these IDs are only as good as their adoption by partners and publishers.
What will slow their adoption? Their cost. It won’t come cheap to adopt these ID solutions, which can be a challenge in an environment where every new spend is scrutinized. This is the reason we will see most organizations start with one ID solution before considering expansion beyond.
Drive Your First-Party Data Strategies With a CDP
In order to increase control on their cost and activities, organizations need to double down on their first-party data strategies. While some industries, such as media and big retail, have been leveraging these strategies for years, others like CPG, automotive and manufacturing are just starting out.
The CDP has emerged as a key technology for supporting these first-party data strategies. Although the CDP industry can be complex to navigate due to the number of vendors positioning themselves as CDPs, the key takeaway is that these platforms have been driving engagement and loyalty customer experiences for organizations where it’s been deployed.
“First-party data is the most valuable asset for an organization. It’s the foundation for every customer relationship and it’s key to future proofing your marketing efforts. But your first party data is only useful if you’re able to leverage it effectively. Our investment in a CDP has allowed us to build audiences that are more intelligent so we can activate our first-party data with precision.”Grant Germano, Martech Strategy Lead at Bloomberg Media
Now comes a new opportunity for CDPs to broaden their scope and support what used to be DMPs playground: acquisition. It’s a great way to allow one technology — CDP — to take on the customer experience across the entire lifecycle, from anonymous to known, from acquisition to engagement and retention.
In order to support acquisition use cases, CDPs partnered with identity vendors — from the previous section — operationalizing these identity solutions in one place.
Build a Partner Ecosystem for Data Collaboration via DCRs
Although first-party data is most valuable, it cannot match the scale of third-party data. So what could be the next best thing than its own customer data? That’s where second-party data — someone else’s first-party data — comes in!
DCR technology is on the rise to enable data collaboration between two or more parties. DCRs provide a privacy-safe space to help access insights from audiences, match data between advertisers and other parties including media owners, data owners, and identity providers. Improved targeting is enabled by allowing an advertiser to activate matched data set directly to an addressable channel — when the data clean room provides an integration with that channel — or export owned data back to another system of the brand.
While DCR adoption is still in its early stages, I believe that, as legal barriers are overcome, DCRs will become a vital tool for marketers looking to improve their acquisition programs and outcomes.
The DCR landscape is already very fragmented, advertisers will prioritize DCR adopted by the parties they want to collaborate with, and interoperability is going to be king.
“For us it’s very important to have a mechanism to share data with our partners while maintaining privacy compliance. ActionIQ enabled us to broker the discussions with clean rooms and data partners like Snowflake and InfoSum which has been key for us.”Kumar Ram, Global Head of Marketing Data Sciences, at HP
Identity, CDP, and DCR — Better Together
At the risk of repeating myself, no single solution is going to replace a DMP.
It would be a mistake trying to replace DMPs and look to keep operating exactly as before. Instead, enterprise organizations will achieve their acquisition targets with new strategies and with an acquisition stack composed of a CDP, at least one cookieless ID and at least one DCR.
Let’s summarize by taking a look at where these solutions will be able to bridge the gap left by DMPs:
|Frequency Capping||CDP (or downstream)|
|Integration with paid media channels||CDP, DCR|
These components won’t have to be deployed in parallel, but the sooner you determine your strategy and start executing against it, the sooner you’ll be back in control of your acquisition ship.
The rate of change in the world of marketing technology is breathtaking, and there’s no doubt that it will continue to evolve. Platforms like Snowflake will continue to disrupt the data stack further, and sooner than later.
As organizations move towards a composable approach, there is an opportunity to rethink how third-party data is integrated in the stack.
Why not make these data sets directly available in your data warehouse and then grant access to your composable CDP. Using native query push down, the CDP integrates with your data warehouse, removing unnecessary data copies and reducing costs.
No matter what architecture you decide to deploy, I can’t say it enough: align your people and processes at the same time, empower cross-team collaboration between data and business teams.
ActionIQ’s Edge on Supporting Acquisition Marketing Strategies
As we wrap up, you may be wondering why you should trust these suggestions from ActionIQ. In 2020, admittedly, we were starting to announce our partnerships publicly — as a few other vendors — with a lot of unknowns.
But today is a different story. Not only are we proud to have built a strong partnership ecosystem with major players in the identity and data clean room industries (Neustar, Liveramp, Merkle Merkury, Acxiom, InfoSum to name a few) but we have also proven our solution by driving better outcomes through the use of accessible and consented data.
You can read more about how we reduced CAC for Bloomberg by 76% and helped HP part ways with their legacy DMP technology.
We are not saying it’s easy. It is a shift. But we know it works, and can’t wait to help more organizations step up their acquisition game in the new world.
“At Bloomberg, we aren’t waiting for broader industry solves on the issue. We are instead investing in our own users and data,” Germano explained. “There is a lot brands can do to get ahead of the curve.”
We’re committed to empowering our clients to make the most of their data, and we look forward to continuing to innovate in this space as the industry evolves.
Part ways with your DMP today, win tomorrow.
Download the Enterprise Guide to Acquisition Marketing Powered by First-Party Data or contact our experts to learn more about how ActionIQ can help you migrate off of your DMP.