• by Michael Sands , Columnist, December 4, 2017

Here’s a telling anecdote from DMS West earlier this month: the ubiquitous rise of the Customer Data Platform (CDP). A morning panel included four companies which, when pressed, self-identified as a CDP despite their official branding as tag managers, SSPs, marketing clouds, data management platforms (DMP) and CRM platforms. And for all the scrambling confusion around whether to assume the CDP moniker, morning and afternoon segments were unanimous in their rejection of the label “DMP” to describe their activities. 

There’s more to this than just another chapter in ad tech’s incomprehensible lingo. What’s really going on is that the limits of the DMP are becoming clearer and clearer. 

Oracle’s Joe Zito did not mince his words in an October interview with AdExchanger. “The vision for the DMP — to unify what you’re doing across marketing channels — has fundamentally failed,” Oracle Data Cloud’s vice president and general manager for DMPs admitted.

Why did the data management platform model fail to fulfill its promise? Because DMPs were created for the narrow purpose of customer acquisition. Marketers have long focused on acquisition, dedicating budgets to execute ad campaigns and measuring success in terms of the volume of impressions served. The DMP was designed expressly to serve this end: to house third-party data, generate cookie-based audience segments and target those cookies with online ads. “If you look at DMP usage, 90% or more is pumping online data to open web platforms via cookies,” Eric Roza, executive vice president of Oracle Data Cloud, said in the same interview. 

While DMPs have evolved in recent years, their primary purpose is still the same: finding new customers, most commonly through lookalike modeling powered by third-party data. But blind acquisition is no longer enough. Advertisers now demand retention and loyalty — the power to engage customers who have already converted, and which already belong to a brand’s ecosystem. This is what happens when the industry looks beyond third-party data, where the power of a 360-degree view of the customer and her interactions with the brand are table stakes. 

With competitive pressure from the likes of Amazon forcing allbrands to elevate and prioritize the customer experience, the drive to personalize every interaction with existing customers is becoming even more urgent than the drive to acquire new ones. Which means that DMPs are major marketing investments that are structurally out of sync with the future of addressable marketing. 

The DMP Finds Its Limits 

Consumers want marketing that’s there when they need it. They don’t want to be targeted when the message is irrelevant. Retention and loyalty strategies rely heavily on CRM data. The process of connecting a company’s offline first-party data with the digital environment is crucial for engaging with current customers. 

But DMPs simply weren’t built to help marketers reach their known customers. Targeting cookies — which are web-restricted, often outdated and typically disintegrate after 180 days —  was fine for acquisition strategies, but storing cookies for campaign-based segmentation and activation falls well short of the ultimate goal: a complete 360-degree view of the consumer that can be accessed at all touchpoints. 

Onboarders appear to be more appropriate for this task. They upload a brand’s data, match customer identities across channels and devices, and push out customer IDs to media vendors. That’s why we’ve seen a spate of M&A activity in this category, as marketing clouds seek to fill capability gaps by bolting critical onboarding and cross-device capabilities onto their basic offerings. 

However, there remains a large variability in the features and performance of traditional onboarding solutions. Moreover, coupling an onboarding solution with a DMP solution doesn’t solve the problem of known-user marketing outside of walled-garden environments; it just creates more complexity and added cost. Even the DMP that’s augmented and enhanced by onboarding first-party data still struggles to provide an elegant solution to addressable marketing at scale. 

Sophisticated marketers avoid those pitfalls by looking beyond cookies to base customer interactions on profiles of real people, built with persistent identifiers. Marketers even further along this journey use tools that not only are rooted in persistence, but that also can recognize customers in real time within omnichannel environments. 

A DMP may still be worthwhile for acquisition efforts against unknown users, but a different approach is needed to deliver a truly modernized customer experience. Marketers must invest now in solutions that will help them reach known audiences, or risk constantly defaulting to customer acquisition strategies while neglecting even more valuable individuals – those who are already their customers. Blind acquisition doesn’t cut it; relying on a DMP to guide all customer interactions doesn’t cut it, either. 

No wonder nobody seems comfortable with being called a DMP.