Role and Importance of Customer Data Platforms in A Post-Third Party Cookie World
Customer data platform (CDP) is a fast-growing segment of the digital marketing universe. It focuses on analytics, and pulls data from multiple sources, including 3rd party cookie services, making it easier for businesses to execute data-driven marketing campaigns efficiently. It is all about managing data.
But what role will the customer data platform play when 3rd party cookies, providing a major chunk of customer data, become history?
Before we get into that, a quick explanation of what a CDP is all about. It is a set of processes and tools that allows businesses to capture, organize, and analyze customer data, so it can be used to better understand customer intent, improve conversion rates, generate revenue, and help customers.
Coming back to cookies….Third-Party cookies have made marketers lazy. Due to the availability of third-party data, marketers, so far, had pushed 1st-party data gathering down their priority lists. But with Google having expressed its intent of phasing out third-party cookies, more marketers have started ingesting more 1st-party data, but only just.
There still is a palpable sluggishness on part of marketers where the reaction to the upcoming changes is concerned. Two reasons: one section is still hopeful of Google coming up with an “as good as 3rd-party cookie” alternative, which they can then immediately adopt. There’s also another section that thinks that 2023, the deadline set by Google for Chrome to block third-party cookies, is still far off and that they have more than enough time to adapt to the change.
But the transition is already happening. You don’t want to be the last off the starting block, would you?
In the United Kingdom, for example, Google’s proposed alternative, “Privacy Sandbox” is already being tested, under the scrutiny of the nation’s Competition And Markets Authority, to see how the whole thing works.
What is the Role of CDP in Post Third Party Cookie World?
The present-day system of flow of user data used to target consumers with online ads is threatened, clearly because of the new privacy laws that governments and even some technology giants have put in place.
As this article in the Wall Street Journal points out, the result is that companies are taking matters into their own hands where user data is concerned. Almost every industry, from breweries and fast-food chains to even avocado farmers, is rushing to collect consumer information and create detailed customer profiles.
Table Of Contents
- Customer Data Strategy In Post 3rd-party Cookie World
- Customer Personalization Is Not Going Away
- Role Of Customer Data Platform In Post 3rd-party Cookie World
- Advantages Of A Customer Data Platform
- Four Important Functions Of A Customer Data Platform
You Need To Rethink Your Customer Data Strategy Without Third Party Cookie
A few months ago, we informed you through this blog of Google’s intent to block third-party cookies on its Chrome browser by 2022, as per an announcement by Google in January 2020. Due to its over-arching impact on the advertising and marketing industries, the deadline was pushed to the end of 2023. What’s more, it was recently announced that Apple will only let users access their advertising identifier through Mobile Device ID (also known as IDFA, or the Identifier for Advertisers). Clearly, cookies and the role they play in marketing are getting a lot of attention as a result of such initiatives.
So, while the world is slowly but surely exiting the 3rd-party cookie universe, the shift presents an excellent opportunity for your business to rethink its customer experience strategy. More and more websites have started to use the 1st-party cookie and even zero-party data for one reason or another. All this information gathered first-hand is pure gold in the hands of a digital marketer. The data can be used to truly personalize a customer’s online experience. And for that, what your business needs are a robust customer data platform to give you deeper insights into your prospects and customers, and their behavior.
Third-Party Cookies Are Going Away, But Not Customer Personalization
The digital marketing world has undergone a shift in priorities in recent years, led by innovations in the mobile world and the era of big data, and this, in turn, has led to the era of the CDPs. Customer data platforms can help your business optimize its marketing activities, improve customer experience, and boost revenue.
According to a new report on customer data platforms by Fortune Business Insights, the global customer data platform market size is predicted to reach the US $4,364.7 million by 2027, exhibiting a CAGR of 24.5% during the forecast period. The increasing adoption of artificial intelligence (AI) and machine learning (ML) technologies to enhance workflow and productivity will encourage the healthy growth of the market during the forecast period. Additionally, the implementation of AI in cloud data platforms (CDP) for predictive analysis and enhancement of customer experience will bolster the healthy growth of the market.
Clearly, customer data collection and individual personalization require a CDP at the core. But before we get into personalization, let’s quickly explain cookie types.
There are two types of cookies: session and persistent. The latter remains stored on the user’s device until it expires or is deleted. The former only lasts for the duration of a browser session, that is, until the browser is closed. Most websites offer their visitors both types of cookies.
The difference is that session cookies are temporary and are quickly deleted by the server upon completion of a user session. The downside of using session cookies is that the website will lose track of the user if they close their browser and delete the cookie from their computer. Persistent cookies, on the other hand, are stored on the user’s device until they expire or are deleted. They are used to retain user preferences and customize the user experience across visits to your website.
Now the answer to your million-dollar question – how will personalization be possible without third-party cookies?
In order to still create an individual experience during the customer journey, businesses must now switch to 1st-party data strategies. It is important to note that relying solely on third-party cookies for your marketing activities is no longer the most sustainable option. It is imperative to gather qualitative and reliable customer information from multiple sources, either first-hand or through website visits.
What’s The Role Of Customer Data Platform In the Post-cookie World?
Although online audiences have become more active, they continue to work within a closed ecosystem, i.e. largely Google. With the rise of programmatic advertising and content marketing, more and more businesses have started to grasp that a customer data platform can help them overcome the transition of moving away from 3rd-party cookies.
How does the CDP help? How do you ensure that your customers are content?
Using a customer data platform allows you to leverage your customer data to proactively meet customer needs. It helps businesses cross-reference audiences with the current client profiles, track activity across multiple channels, and identify new audiences that can be targeted. Data collected from internal and external sources are automatically collected and managed here.
Platforms that collect customer data and related technologies are becoming more popular. Various technologies are built into CDPs. Among them are cloud data warehouses that consolidate customer data, ID management systems that use emails to help identify people, personalization tools that tailor content displayed on eCommerce sites based on their past behavior, and tools that create visual reports.
Due to the fading of third-party cookies, first and zero-party data should gain more attention. Data shared by your customers with you is zero-party data. First-party data is different from zero-party data because zero-party data is obtained from direct interaction with your audience. Meanwhile, first-party data offers insights into analytics and user behavior.
Business owners need to focus on their current customer databases, as these are the data they own. Zero-party data, those details that are voluntarily provided by a customer for the purpose of making a purchase, is consciously and ethically collected. Customers want this information to be given to the company, so this provides a reliable basis for a marketing strategy.
How Can Customer Data Platform Help Specifically?
Cookies are used extensively on the internet, and as such, they’re seen as a vital part of our online experience. There is so much personal data available through cookies that it can be useful to supplement your web browsing with some form of cookie usage tracking. This way you can gain insight into how users interact with various aspects of your website and see where improvements can be made.
It’s also one of the easiest ways for website owners to set up analytics software, which can then be incorporated into almost any website. When cookies are used correctly they offer a substantial amount of information that can be used to better understand user behavior. Because of this, cookies are an integral part of the customer data platform.
Therefore, if you are to survive the new 3rd-party “cookieless” era, you must manage your own first-party data effectively. Utilizing first and zero-party data, CDPs can build personalized customer profiles that enable you to meet buyers and prospects where, when, and how they want. Express Analytics CDP Oyster is specifically designed for marketing professionals who need to manage a lot of data and deploy one on one personalized experiences.
The key is to utilize first-party data in a way that enables such personalization to enhance the customer experience through insights. And to scale. CDPs can collect all of these kinds of data, both online and offline, in order to deliver this kind of experience.
It can be challenging for some businesses to master all the data they are given. Often the data is unorganized as a result of a data overload. Unfortunately, this can lead to a lot of lost business opportunities. Businesses tend to rely on their CRM systems in the absence of real-time data processing and combining. But CRMs have limitations.
There are Several Advantages to Using Customer Data Platforms (CDP)
- Increased customer engagement
- Faster and better decision making
- Improved sales
- Improved customer retention
- Increased cross-sells and upsells
- Decreased customer churn
- Better product development
Here are Many Capabilities of a Customer Data Platform (CDP):
- Collaboration and Decisioning: The ability to work with multiple data sources and tools.
- Visualization: A tool for viewing, visualizing, and aggregating customer data.
- Search and Mapping: The ability to search, navigate and analyze the data you have.
- The integration of different types of data through external platforms such as Salesforce, NetSuite, Microsoft Dynamics, etc.
- Intelligent rules: The use of algorithms to automatically derive additional value.
- Processing: The interpretation of the data you have by automating processes based on customer engagement.
- Data cleansing: Cleaning and deriving extra value from the data that you have. Easy API integration with other tools and systems to enrich customer engagement.
- Modeling: The ability to derive a statistical model from customer data.
- Predictive and Prescriptive analytics: The ability to predict future behavior, such as churn.
You must know this – not all CDPs are made equal. Some companies even try to pass off customer relationship management (CRMs) systems or data management platforms (DMPs) as glorified CDPs. A CDP is for a non-customer-facing role, which is the opposite of what a CRM is. The only common link between them is that both collect data.
The CDP’s aim, though, is to not only collect customer data from many sources but to provide insights into the data so your business can improve.
4 Most Important Functions of a Customer Data Platform:
- Customer data management
- Identity resolution
- Tracking customer behavior
- Customer analytics
Cleaning the incoming data, maintaining data warehouses, creating customer profiles, keeping activity logs, and developing profiling models are what a CDP must deliver.
An ideal CDP, like Oyster by Express Analytics, provides all of these benefits: it automates data aggregation, cleans the data, stores it in a data warehouse, tracks a customer’s journey, and gives the user insights into his business – all of which eventually drives customer growth.
In conclusion: A customer data platform has a broader scope of functionality. It’s a new way of approaching and improving the marketing experience for a company’s customers. In the post-third-party cookie era fast coming up, the CDP takes on an even more central role in tracking a customer’s journey. A robust CDP should have the capabilities to collate and utilize both, first and zero-party data, to create real-time, personalized profiles of your customers and prospects, enabling your business to meet them where and when they (customers) want.
An Engine That Drives Customer Intelligence
Oyster is not just a customer data platform (CDP). It is the world’s first customer insights platform (CIP). Why? At its core is your customer. Oyster is a “data unifying software
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