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Is the Data Management Platform Dead?

Should brands switch to a Customer Data Platform (CDP)?

Is the Data Management Platform Dead?

There has been a lot of talk in the industry over the past 18 months fed by thought pieces that would lead you to believe that there is no more value in using a DMP. The decline of the third party cookie – fuelled by GDPR, Safari’s ITP, and Google’s recent announcement around the 2-year time-limit on third party cookies in Chrome – have been touted as the final nail in the coffin of the technology that promised a lot, and often failed to deliver.

At Merkle, we have long called for the industry to wake up to the decline of cookies. However, more generally, the decline of the cookie has been met with an attitude like that with which we have dealt with climate change over the past decade. Everyone knows there’s a problem, but no one is quite sure what the solution is – or who the people are to fix it. 2019 was the year everyone woke up to our need to find the answer to both of these.

But as it stands, there is no one answer to the deprecation of third party cookies. Contextual targeting, 1st party cookies and Google’s Federated Learning of Cohorts solutions all offer some work-arounds for 3rd party cookies but all have their own limitations (more on this in another a blog!). After Google’s announcement last month, it seems the industry has 2 years to deliver the wholesale technological and business change that is required to maintain the digital advertising ecosystem.

So, how should brands handle these changes?

First, brands need to continue investing in a data acquisition strategy which has a clear return for their customers. Loyalty programmes without tangible benefits for consumer will never yield the level of first party data a brand requires. Build that data pool so that when cookies are no longer an option for targeting, you have enough volume to activate using your first party data.

Second, for brands with large proportion of unknown users and large display budgets, continue to activate via your DMP for the next two years. The third party cookie will offer you the best match rates into DSPs, giving you the opportunity to develop your acquisition strategy and grow your registered user lists. Most DMPs also deploy a first party cookie, collect Mobile Ad IDs (MAIDS) and many now onboard data using hashed email addresses; giving you a degree of flexibility to keep targeting unknown audiences even after third party cookies are no longer accepted.

Third, research the CDP market in preparation for the end of third party cookies. Scope out your use cases and identify what pre-requisites exist to get the most return on your technology investment. Much of the criticism aimed at DMPs centre around their tendency to over-promise when it came to the sales stage, and under-deliver after implementation. To prevent falling foul of the same problems, consider whether a CDP is even necessary for your business, and then decide which of the plethora of platforms you should consider investing in. There are currently over 150 companies claiming to have CDP capabilities, and many are already over-claiming their strengths. Merkle rank CDPs across 5 distinct pillars: Activation, Integration, Orchestration, Insights & Data Management. Some platforms claiming to be a CDP can only function across two or three of these areas. Many position themselves as the panacea to marketers’ problems; fixing syndication match rate issues, offering machine learning and automation and all in a GDPR/CCPA friendly way. Whilst this is true in some instances, in other cases it includes some substantial overclaim.

So, is the DMP still relevant to digital marketing?

Yes. It’s ability for it to collect data on both known and unknown users, and easily integrate with delivery platforms gives it a valuable on-going role in many client’s tech-stack – for at least the next two years. Many DMPs also deploy their own first party cookie and ingest a variety of other tracking types, meaning there is likely to be a place for them in the medium to long term too. However, these tools must be used alongside a robust strategy for collecting first party data – and the consent to use it.

To discuss the role of a DMP, CDPs, and whether now is the right time to invest in one, reach out to one of the team.

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