Yesterday we answered the question “What is a CDP?” Today, we dig into “Why?”
What factors have fueled the growth of the CDP space and why are data-driven marketers increasingly turning to CDPs to help them drive core business goals and positive user experiences?
The graph above highlights the top reported tactics enabled by a CDP and does a good job of answering our question.
- Individualized email personalization: Sixty-two percent of marketers across business verticals who have implemented a CDP use it to help drive individualized personalization in email. The email channel, which is responsible for driving upwards of 20 percent of total revenue for many brands, was once primarily a broadcast channel with marketers “blasting” messaging out to large segments of lists. Today, due to the availability of rich customer data, marketers can hone each message to be individually relevant to each recipient. This hyper-relevance drives significant lifts in response rates and business results from the channel.
- Addressable advertising: Opportunities for addressable advertising have never been more plentiful and are now extending beyond the web to television and offline opportunities. But the efficacy of addressable advertising is highly contingent on quality and the availability of the customer data that informs it. Fifty-five percent of those who have already implemented a CDP use it to help drive audience selection and measure addressable ads. CDPs can also give marketers better visibility into the value of different types of customers and therefore help them hone and optimize customer acquisition cost benchmarks/limits.
- Real-time targeting: Messaging and advertising that reaches the intended target at precisely the appropriate time has a much greater chance of driving intended behaviors than messaging that is delayed, batched, and/or deployed at a scheduled cadence. To execute highly relevant campaigns at these precise moments, 53 percent of marketers who have a CDP use it for real-time targeting. “Speed of data” is critical to these marketers and the data agility that a CDP affords is a key towards reaching the right target, at the right time, with the right message.
- Optimized customer experience: Forty-nine percent of marketers with a CDP use it to drive personalized website experiences. One of the primary benefits for many marketers that leverage a CDP is the ability to progressively profile website visitors based on various identity management mechanisms and to serve them content that is most relevant based on known and inferred attributes. This functionality is critical to marketers across business verticals but especially so for those in media and publishing who may offer mixtures of free and paid content [i.e.: five free articles a month]. CDPs can help identify users in real-time and serve them the appropriate content. Overall, this greatly improves the customer experience.
- Targeting optimization: Retargeting site visitors, cart abandoners, and other prospects with messaging in other channels is a highly utilized tactic by almost all online marketers. It is generally easy to employ, is relatively low cost, and often generates higher response rates than other campaigns. Most marketers who retarget at scale, however, do so inefficiently. This often creates negative customer experiences, because these marketers continue to retarget customers, with the same offer, even after they have made the purchase. Forty-two percent of marketers use their CDP to help them suppress online advertising based on purchase data, and 27 percent change the ad or offer based on purchase or behavior data. By employing these tactics, marketers with a CDP can drive much more effective and efficient media spend.
Tomorrow we’ll take a look at “how” marketers are using their CDP – what data sources they connect and what benefits they gain by doing so.